Mahindra & Mahindra

Companys Board Analysis :

During the period 1st April, 2016 to 29th May, 2016, 60,027 vehicles were produced as against
65,086 vehicles and 57,668 vehicles were dispatched as against 59,956 vehicles during the
corresponding period in the last year. During the same period 44,730 tractors were produced and
44,778 tractors dispatched as against 38,382 tractors produced and 38,175 tractors dispatched
during the corresponding period in the previous year.
Recent data indicators suggest that the country is likely to experience a stronger, more broad
based economic recovery in Financial Year 201617. For one, infrastructural activity,
particularly in the power and road sectors, registered a smart pick up in the last quarter of
Financial Year 201516 indicating that the Government's focused policy efforts in this space are
finally beginning to bear fruit. Rising bitumen production, cement dispatches and freight rates
attest to the same. Second, growth in domestic sales of motor cycles and tractors have now
turned positive suggesting that the rural economy may now be stabilizing, albeit at a low level.
With a robust monsoon season predicted for 2016, rural demand will, in all likelihood, pick up
pace in the coming quarters. Finally, with both infrastructural activity and consumption demand
gaining strength, Balance Sheet stresses in the Corporate Sector are likely to wane, setting the
stage for a revival in domestic private sector investments by year end.
Thus, even as we remain alert to the downside risks emanating from a challenging global
environment and domestic banking distress including Brexit, the Company's outlook on the
economy is upbeat and it stands ready to harness the business opportunities that stronger growth
will present.
Labour Management:
Mahindra & Mahindra, the country's largest tractor manufacturer, today stated that a section
of employees are not reporting to duties in a concerted manner at its tractor manufacturing plants
at Mohali, Punjab, which operate under its Swaraj division.
"Their demands are unjustified and matter is in conciliation with the Labour Commissioner's
Office. The management is reasonably sure that better sense will prevail with this section
of employees and the matter will be resolved amicably", the company said in a release.
There is, however, no loss of production as rest of the employees who are reporting to work are
meeting the production requirements and catering to the operations of the plant.

Eicher Motors
Labour Management:
The analysis believes that seeking shareholder approval each year is a good governance practice
as it allows the shareholders to analyze the companys performance before approving the
proposed remuneration. Moreover the proposed salary and FPA is defined, unlike the general
practice of having a broad range of salary with variable annual increments which are left to the
discretion of the board. The compensation committee of Eicher consists of Siddhartha Lal, Priya
Brat and S Sandilya. According to IiAS, it considers Priya Brat and S Sandilya as nonindependent as they have been on the board for more than ten years. The compensation
committee decides the terms of remuneration of Siddhartha Lal. The commission payable to nonexecutive directors is decided by Siddhartha Lal. This arrangement, valid upto 31 December
2014, was approved by the shareholders in AGM held on 15 March 2010. IiAS does not favor
such reciprocal arrangements. We believe that compensation committee should comprise only
independent directors and the remuneration terms, including commission, should be proposed by
the committee and put to shareholders vote.
Siddhartha Lals remuneration is broadly comparable to that of his peers:

Companys Board Analysis:

The Directors have pleasure in presenting the Thirty Fourth Annual Report along with the
Audited Financial Statements of the Company for the financial period/year ended March 31,
2016.
FINANCIAL RESULTS
The Company achieved an all-time high top line growth during the financial year 2015-2016
with revenue from operations (net) at Rs. 6,188.03 crores. The profit before depreciation and
interest amounted to Rs. 1,730.48 crores, which is 28.0% of the total revenue. Afteraccounting
for interest and dividend income of Rs. 178.24 crores,interest expense of Rs. 1.41 crores and
depreciation of Rs. 137.73 crores, profit before tax amounted to Rs. 1,769.58 crores. Profit after
tax amounted to Rs. 1,229.85 crores after income tax provision of Rs. 539.73 crores.
During the financial year, the Company has altered the object clause ofits Memorandum of
Association by incorporating therein;

Business of dealing in all types of garments, merchandise, clothing, accessories, sports

apparel, protective gear, footwear and leather, articles, motorcycle attachments and
accessories, protective accessories including helmets.

Business of running and operating restaurants, cafeterias, pubs, breweries, driver and
mechanic training centers and to organize tours, events, let out motorcycles and other
related activities.

Approval of shareholders was obtained through postal ballot for above amendment in the object
clause of the Memorandum of Association. The Company''s Royal Enfield unit continues to grow
significantly. It sold 6,00,944 motorcycles in the financial year 2015-16 (15 months), 98.6%
more when compared to 2014 (12 months) sales of 3,02,592. Out of 6,00,944 motorcycles sold in
2015-16 (15 months), 11,653 were exported, a growth of 87.3% over previous year volume of
6,221 motorcycles in 2014 (12 months).
Revenue from operations (net) for 2015-16 (15 months) year was Rs. 6,188.03 crores, 104.1%
growth over previous year (Rs. 3031.22 crores for 12 months). Net Sales of spare parts, gears
and services increased to Rs. 487.49 crores in 2015-16 (15 months) from Rs. 229.31 crores in
the previous year (12 months), registering a growth of 112.6%.