Highest CRISIL rating for M&M's corporate governance

07 September 2006

CRISIL has assigned a 'CRISIL GVC Level 1' rating to Mahindra & Mahindra Limited (M&M). The rating indicates that M&M''s capability with regard to corporate governance and value creation for all its stakeholders is the highest.

M&M's levels of corporate governance practices have traditionally been very high, reflecting the management's commitment to the highest standards of corporate conduct. This is reflected in all aspects of the company's functioning. The M&M board provides good strategic direction, and rigorous management oversight.

Independent directors at M&M, who are experts with rich experience in the areas of finance, law, and research & development, comprise a majority on the board, and contribute strongly and meaningfully to board discussions. The company''s competent operating management ably supports the board. M&M's leadership in its core automotive and tractors businesses, and its presence across various segments of the automobile industry, reflect the capabilities of its operating management.

M&M's audit committee has been functional since 1988, long before regulatory reforms mandated the establishment of one. A unique feature at M&M is its strong and independent internal audit function. Besides process controls, the internal audit department is involved in process improvements and transmission of best practices across the M&M group.

M&M has adequate standards of dissemination of corporate, financial, and operational information to all stakeholders.

M&M has a strong value system, and continues to strengthen and institutionalise its governance processes. CRISIL believes that the current management''s openness in adopting appropriate best practices will ensure lasting good governance.