annual-report-FY2021

59 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 Dear Shareholders Your Directors present their Report together with the audited financial statements of your Company for the year ended 31 st March, 2021. A. FINANCIAL AND OPERATIONAL HIGHLIGHTS (Rs. in crores) Particulars 2021 2020 Revenue from Operations. ............................. 45,041 45,488 Other Income................................................... 1,221 1,668 Profit before Depreciation, Finance Costs, Exceptional items and Taxation..................... 7,727 7,466 Less: Depreciation, Amortisation and Impairment Expenses ............................ 2,233 2,223 Profit before Finance Costs, Exceptional items and Taxation.......................................... 5,494 5,243 Less: Finance Costs........................................... 371 113 Profit before Exceptional items and Taxation... 5,123 5,130 Add: Exceptional items................................... (3,663) (2,014) Profit before Taxation..................................... 1,460 3,116 Less: Tax Expense............................................. 1,191 1,785 Profit for the year........................................... 269 1,331 Balance of profit for earlier years................. 29,102 28,967 Less: Transfer to Debenture Redemption Reserve..................................................... — — Profits available for appropriation................ 29,371 30,298 Add: Other Comprehensive Income/(Loss)*. . (60) (8) Less: Dividend paid on Equity Shares............ 292 1,057 Less: Income-tax on Dividend paid................ — 131 Balance carried forward. ................................ 29,019 29,102 * Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings. Financial Year 2021 was one of the worst years for the Indian economy since independence. As per the Second Advanced Estimates of National Income released by the CSO, real economic activity is expected to have contracted by 6.5% during the fiscal as the COVID-19 pandemic took a toll on economic activity. This was the first instance of a contraction since the Financial Year 1980. Nominal per capita income fell quite sharply during the year. The pandemic hit all segments of the economy quite hard with the manufacturing, construction and services Board’s Report segments reporting large contractions during the fiscal. Agriculture, however, was the lone bright spot in the economy, growing by 3.6% in the Financial Year 2021. Rural areas were not hit as hard by COVID-19 vis-à-vis urban India. Besides, the Government also proactively intervened and supported this segment by way of cash and kind transfers, record food grain procurement, frontloading rural-related Government spending, hiking MGNREGA spending sharply, initiating a temporary rural works program for returnee migrants and ensuring ample supply of credit. All these measures provided support to the segment. India’s food grain output is estimated to have touched 305.4 million tonnes in Financial Year 2021 which is the highest level ever. Likewise, horticulture output is also pegged at a record level of 326.6 million tonnes during the year. On the demand side, all drivers of economic activity fared poorly in the Financial Year 2021. Private consumption spending declined sharply owing to a fall in Household incomes while capital formation contracted as the private sector delayed investments owing to weak demand and low capacity utilisation levels. Exports also fell sharply with a contraction in world trade volumes owing to weak demand across the globe. The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 3.5% at Rs. 7,727 crores as against Rs. 7,466 crores in the previous year. Profit after tax decreased by 79.8% at Rs. 269 crores as against Rs. 1,331 crores in the previous year. Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario. Details of Material Changes from the end of the Financial Year till the date of this Report The rampant spread of the Second Wave of COVID-19 and Lockdowns enforced in various States/Parts of the Country coupled with disruption in the supply of oxygen for industrial use, demand and supply for Vehicles and Tractors is expected to be impacted temporarily.