SML Mahindra Limited has achieved a significant regulatory victory with the Ministry of Corporate Affairs setting aside a penalty order that had imposed substantial fines on the company and its officers. The Regional Director's decision marks the successful conclusion of the company's appeal process under the Companies Act, 2013.

Appeal Details and Original Penalty

The company had filed an appeal with the Regional Director (Northern Region), MCA, New Delhi under Section 454 of the Companies Act, 2013. This appeal was against an order issued by the Registrar of Companies (Punjab Chandigarh)/Adjudicating Officer on August 21, 2024.

Favorable Order from Regional Director

The Regional Director, through its order dated September 25, 2025, allowed and dispensed the appeal filed by SML Mahindra Limited. The authority set aside the entire order dated August 21, 2024, passed by the ROC/Adjudicating Officer, effectively nullifying all imposed penalties.

Financial Impact Assessment

The company has confirmed that there is no financial impact resulting from this regulatory development. Since the Regional Director has set aside the penalties earlier imposed by the ROC through its order dated August 21, 2024, SML Mahindra Limited is no longer liable to pay the previously imposed fines.

Regulatory Compliance

This disclosure has been made pursuant to Regulation 30(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with clause 20 of Para A of Part A of Schedule III of the LODR Regulations. The company maintains transparency in its regulatory communications and ensures timely disclosure of material developments to stakeholders.

In summary, SML Mahindra Limited successfully appealed against the ROC penalty of ₹2.00 lakh on the company and ₹0.50 lakh each on three officers. The Regional Director set aside the original order dated August 21, 2024, marking a favorable outcome for the company in its regulatory proceedings.

SML Mahindra Limited has disclosed receiving an appeal effect order from the Income Tax Department with total adjustments of ₹16.41 lacs for Assessment Year 2022-23. The company communicated this development to stock exchanges on December 10, 2025, in compliance with regulatory disclosure requirements.

Income Tax Order Details

The Assistant Commissioner of Income Tax - Transfer Pricing, Delhi issued the appeal effect order on December 9, 2025, following directions from the Dispute Resolution Panel under section 144C(5). The company received and downloaded the order from the Income Tax portal on December 10, 2025, at 3:12 PM.

Transfer Pricing Disputes

The Income Tax Authority has raised disputes regarding two key areas of the company's transfer pricing practices. The primary concerns involve the Arms Length Price and methodology adopted by SML Mahindra Limited for payment of Corporate Guarantee fees to Associated Enterprises. Additionally, the authority has questioned the method used for ascertaining Arms Length Price in the company's manufacturing segment operations.

Previous Developments

This latest order represents a continuation of ongoing transfer pricing proceedings. Earlier, the Dispute Resolution Panel had issued directions under section 144C(5) on November 22, 2025, for the same assessment year with adjustments of ₹9.92 lacs. The company had previously communicated these developments to stock exchanges on November 22, 2025, through letter number SML/SEC/2025-26-083.

Potential Penalties and Company Response

The order indicates that the Assessing Officer may examine the initiation of penalty proceedings under section 270A of the Income Tax Act, 1961. This provision typically relates to penalties for underreporting of income or misreporting of facts in tax returns.

SML Mahindra Limited has stated its intention to file an appeal against this order, indicating the company's disagreement with the tax authority's assessment and adjustments. The company continues to maintain compliance with regulatory disclosure obligations by promptly informing stock exchanges of these developments.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Clause 20 of Para A of Part A of Schedule III. This ensures transparency regarding material developments that could impact the company's financial position or operations.