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Directors Report of Mahindra Lifespace Developers Ltd.

Mar 31, 2015

To the Members

The Directors present their sixteenth report together with the Audited Financial Statement of your Company for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS (STAND-ALONE)

2015 2014

Income from Operations 62,401 30,707

OtherIncome 13,602 11,426

TotalIncome 76,003 42,133

Profit Before Depreciation, Interest andTaxation 36,227 14,306

Less :Depreciation 274 232

Profit Before Interest and Taxation 35,953 14,074

Less : Finance Cost 2,182 3,935

Profit Before Taxation 33,771 10,139

Less : Provision for Taxation

CurrentTax 10,134 2,467

Deferred Tax (including MAT Credit) 307 (101)

Profit After Tax

Add : Balance of Profit for earlier years 36,519 35,527

Amount available for appropriation 59,849 43,300

Proposed Dividend on Equity Shares (including tax on distributed profits) 2,972 2,867

Interim Dividend on Equity Shares (including tax on distributed profits) 2,503 -

Depreciation adjustment (Net of Deferred 6 - Tax Adj)

Less : Transfer to General Reserve 2,333 777

Less: Transfer to Debenture Redemption Reserve 3,135 3,136

Balance carried forward 48,900 36,520

DIVIDEND

During the financial year 2014-15, your Directors had declared and paid a Special Dividend by way of an Interim Dividend of Rs. 6/- (Six) per equity share of the Company i.e. 60 (Sixty) per cent of the face value of Rs.10 (Ten) for each equity share.

In addition to the Special Dividend by way of an Interim Dividend, your Directors have recommended a Final Dividend of Rs. 6 (Six) per equity share of the Company, i.e. 60 (Sixty) per cent of the face value of Rs.10 (Ten) for each equity share, for the year 2014-15.

The equity dividend i.e. Special Dividend by way of an Interim Dividend and Final Dividend (including tax on distributed profits) aggregates Rs.5,466 lakhs (previous year Rs. 2,867 lakhs - only final dividend). The final Dividend shall be paid out of the profits for the current year.

RESERVES

Out of the profits available for appropriation, an amount of Rs. 2,333 lakhs and Rs. 3,135 lakhs has been transferred to the General Reserve and the Debenture Redemption Reserve respectively and the balance has been carried forward to the Profit & Loss Account.

OPERATIONS / STATE OF THE COMPANY''S AFFAIRS

Even as the economic environment in India continued to be challenging, the situation improved somewhat as the year progressed, especially in the second half of 2014-15. According to the advance estimates released by the Central Statistical Organisation (CSO), India''s GDP growth is expected to be 75 per cent in 2014-15, around 1 percentage point higher than the previous year. As far as the real estate industry is concerned, the overall performance was subdued — housing prices, rents and offtake of housing loans continued to be sluggish.

In this environment, the Company performed well — focusing on improving efficiencies and developing new markets, expanding its presence in newer segments in residential business and implementing plans to augment the product offering in the integrated development space. Both operational segments of your Company — residential and integrated developments — showed progress during the year. There were no changes in the nature of business during the year under review.

In the residential business, the Company made a successful foray in the affordable housing segment with two pilot projects in Chennai and Mumbai Metropolitan Region under the name

''Happinest''. The Company also launched two new projects in the luxury and holiday home segments. In addition, fresh inventory in 3 of its existing projects was also launched during the year. During 2014-15, the Company sold over 1,400 residential units across its ongoing and newly launched projects, including projects of its subsidiary companies in the residential space. The Company had entered into mutually agreed consent terms with a land-owner in respect to one of its project, where there was a dispute with the land owner and in accordance with the consent terms, the Company during the year has completed the sale of land in relation thereto.

In the large format developments, Mahindra World City, Jaipur, saw a significantly improved performance compared to the previous year, with better demand and appreciation in prices. Mahindra World City, Chennai, also signed industrial land leases in the Domestic Tariff Area, even as most of the development there is currently in residential and social infrastructure.

These enabled the Company to register a creditable performance in a challenging macroeconomic environment.

The consolidated total income of your Company increased from Rs. 75,620 lakhs in 2013-14 to Rs. 1,14,757 lakhs in 2014-15. The consolidated Profit before tax (PBT) stood at Rs. 42,102 lakhs in 2014-15 as compared to Rs. 16,094 lakhs in 2013-14, whereas the consolidated profit after tax (PAT) after minority interest was Rs. 26,620 lakhs as compared to Rs. 10,063 lakhs during 2013-14.

Total income of your Company as a standalone entity was Rs. 76,004 lakhs as compared to Rs. 42,133 lakhs in 2013-14. PBT was Rs. 33,771 lakhs as compared to Rs. 10,139 lakhs in 2013-14, whereas PAT was Rs. 23,330 lakhs as compared to Rs. 7,773 lakhs in 2013-14. Total income includes a dividend income of Rs. 727 lakhs received from its subsidiary Mahindra World City Developers Limited, Rs. 740 lakhs received from its subsidiary Mahindra World City (Jaipur) Limited and Rs. 740 lakhs received from its subsidiary Mahindra Integrated Township Limited, during the year as compared to Rs. 953 lakhs and Rs. 518 lakhs from Mahindra World City Developers Limited and Mahindra World City (Jaipur) Limited respectively in 2013 -14.

No material changes and commitments have occurred after the close of the year till the close of this Report, which affect the financial position of the Company.

AWARDS AND RECOGNITION

Your Company and its subsidiaries received several awards and recognitions during 2014-15. Some of the prestigious awards are:

- Mahindra Lifespaces received the Golden Peacock Environment Management Award, 2014 under Special Commendation category;

- Mahindra Lifespaces was selected as one of India''s Top Inno-Visionary Builders at the Construction World Architect and Builder (CWAB) Awards, 2014;

- Mahindra Lifespaces was selected as one of the 20 winners of the prestigious "Silver EDGE'' award from Information Week;

- Mahindra Lifespaces was recognised as the "Regional Sector Leader" in the 2014 Global Real Estate Sustainability Benchmarking (GRESB) Survey for Asia/Diversified/Small Cap companies;

- Mahindra Lifespaces received the Commendation Certificate for Significant Achievement at the CII ITC Sustainability Awards 2014;

- Mahindra Lifespaces received "Order of Merit" at the Skoch Renaissance Awards, 2014 for Sustainability Leadership;

- Mahindra World City, Jaipur, received "Order of Merit" at the Skoch Renaissance Awards, 2014 for its contribution in the field of CSR;

-Splendour by Mahindra Lifespaces won the Premium Apartment Project of the Year - West at the NDTV Property Awards, 2014.

SHARE CAPITAL

During the year, the Company allotted 163,850 equity shares of Rs. 10 each to the eligible grantees pursuant to exercise of Stock options granted under Employee Stock Option Scheme

- 2006 (ESOS - 2006) and Employee Stock Option Scheme - 2012 (ESOS - 2012). Accordingly, issued equity share capital has increased from Rs. 40,88,92,010 to Rs. 41,05,30,510 and the subscribed and paid up equity share capital of the Company has increased from Rs. 40,84,83,500 to Rs. 41,01,22,000.

The allotment of 40,851 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956, till such time the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or The Special Court (Trial of offenses relating to transactions in Securities).

During the year, Company has not issued any equity shares with differential rights or any sweat equity shares.

ISSUE & ALLOTMENT OF NON- CONVERTIBLE DEBENTURES

On 4th April, 2013, the Company had issued and allotted 5,000

- Secured Listed Rated Redeemable 10.78 per cent YTM, Non- Convertible Debentures (NCDs) with a face value of Rs. 10,00,000 (Rupees Ten lakhs only) each for cash at par, aggregating Rs. 500 (Five hundred) crores vide Series I, Series II, and Series III on Private Placement basis. The proceeds of the NCDs issue have been fully utilised for the purposes of the issue.

EMPLOYEE STOCK OPTIONS SCHEME

As of 31st March, 2015 in accordance with the Employee Stock Option Scheme - 2006 (ESOS - 2006), 1,72,750 Stock Options were exercised under ESOS - 2006.

In accordance with the Employee Stock Option Scheme - 2012 (ESOS-2012), the Nomination and Remuneration Committee had on 17th October, 2014, approved grant of 27,000 Stock Options to the eligible employees, at an exercise price of Rs. 10 each which is equal to the face value of the equity share of the Company. On 30th April, 2015, the Committee approved grant of 3,000 Stock Options to the eligible employees under ESOS-2012. As of 31st March, 2015, a total of 25,800 Stock Options were exercised under ESOS - 2012.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are provided as Annexure 1 to this Report.

The Shares arising out of exercise of Employee Stock Options are directly allotted to the eligible employees and therefore the requirement of disclosure in respect of voting rights not exercised directly by the employees does not apply to your Company.

The Existing Schemes Employee Stock Option Scheme - 2006 (ESOS 2006) and Employee Stock Option Scheme - 2012 (ESOS-2012) shall be implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the "Regulations") and other applicable Regulations, Circulars in force from time to time.

HOLDING COMPANY

The promoters of the Company i.e. Mahindra & Mahindra Limited (M&M) holds 2,08,46,126 equity shares which represents 50.83 per cent of the paid-up equity capital of the Company. Your Company continues to be a Subsidiary Company of M&M.

Subsidiaries, Joint Ventures and Associate companies

A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as Annexure A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

Subsidiary Companies

The policy for determining material subsidiaries as approved may be accessed on the Company''s website at the link: http://www. mahindralifespaces.com/pdf/policy%20for%20determining%20 material%20subsidiaries.pdf

During the year under review, Mahindra Industrial Park Chennai Limited became a wholly owned subsidiary of Mahindra World City Developers Limited and hence also became a 89% subsidiary of the Company. This company shall be developing an Industrial Park in North Chennai, Tamil Nadu spanning an area of approximately 300 acres. This company is exploring the possibility of tie-up with a strategic investor in this space.

Mahindra World City (MWC), Chennai, is implemented by Mahindra World City Developers Limited (MWCDL), currently an 89:11 joint venture between Mahindra Lifespaces and the Tamil Nadu Industrial Development Corporation Limited (TIDCO). It is the first township in India to receive Green Township Certification (Stage I Gold Certification) from IGBC.

Mahindra World City, Chennai was launched in September, 2002 and currently has three sector specific Special Economic Zones (SEZs) — IT (services and manufacturing), Apparel and Fashion Accessories, and Auto Ancillaries, and a Domestic Tariff Area (DTA) for businesses catering to the Indian market. Integrated to the business zone is a Residential and Social Infrastructure zone.

At the end of 2014-15, the project had a total area of 1,524 acres.

With greater stabilisation in the business zone, the focus is now in developing the residential and social infrastructure. Mahindra World City, Chennai has allocated 289 acres for the development of residential and social infrastructure.

Mahindra World City, Jaipur is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between Mahindra Lifespaces and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise. Mahindra World City, Jaipur is proposed to be developed as a Multi Product Special Economic Zone and a Domestic Tariff Area across 3,000 acres, of which 2,949 acres have already been acquired. Currently, the project has five zones, IT/ITES SEZ, Handicrafts SEZ, Engineering & Related Industries SEZ, Gems & Jewellery SEZ and a Domestic Tariff Area. Going forward, the near term focus will continue to be on sale of industrial land in the project.

Mahindra Integrated Township Limited (MITL) is engaged as a co- developer in developing the residential township area at Mahindra World City, New Chennai. Its current developments include ''Iris Court'' and ''Nova''. MITL has a balance of approximately 140 acres to be developed in phases for offering products in different formats and segments. MITL is 73.94 per cent owned by your Company and 26 per cent by MWCDL. The details of the current developments have been given in the Management Discussion and Analysis Report.

Mahindra Residential Developers Limited (MRDL), is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL). MRDL, a Co-developer in developing residential township area in MWC is developing a gated residential community in approximately 55 acres within Mahindra World City, New Chennai under the name ''Aqualily. The details of the current development have been given in the Management Discussion and Analysis Report.

Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between your Company and B.E. Billimoria & Co. Limited, one of the leading construction companies in India. This company is developing a residential complex across approximately 25 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). This

project called ''Bloomdale'' will have a total saleable area of 1.53 million square feet. The details of the current development have been given in the Management Discussion and Analysis Report.

Mahindra Infrastructure Developers Limited (MIDL), a wholly owned subsidiary of your Company is an equity participant in the project company namely, New Tirupur Area Development Corporation Limited (NTADCL) implementing the Tirupur Water Supply and Sewerage project. During the period 2003 to 2009, the company was engaged in operating a solid waste treatment plant at Tirupati. For more details about the investment of the Company into MIDL, please refer note no. 12(a) to the standalone Financial Statement.

Mahindra World City (Maharashtra) Limited (MWCML), a wholly owned subsidiary of your Company was set up to undertake development of a multi-product SEZ at Karla, near Pune in collaboration with Maharashtra Industrial Development Corporation (MIDC). In the year 2010-11, MIDC regretted its inability to acquire the land required for setting up the project. The Company is looking out for an appropriate business opportunity to take up projects in real estate development.

Knowledge Township Limited (KTL), a wholly owned subsidiary of your Company will be developing an industrial park in Maharashtra. The company is in the process of procuring its targeted land acquisition.

Industrial Township (Maharashtra) Limited (ITML), a wholly owned subsidiary of your Company is exploring the possibility of taking up real estate development.

Raigad Industrial & Business Park Limited (RIBPL), a wholly owned subsidiary of your Company is exploring the possibility of taking up real estate development.

Anthurium Developers Limited (ADL) a wholly owned subsidiary of your Company is exploring the possibility of taking up real estate development projects.

Industrial Cluster Private Limited (ICPL) (formerly known as Mahindra Housing Private Limited) a wholly owned subsidiary of your Company is exploring the possibility of taking up development of industrial park in Gujarat.

JOINT VENTURE COMPANIES

Mahindra Homes Private Limited (MHPL) (earlier known as Watsonia Developers Private Limited and prior to that Watsonia Developers Limited), a 50:50 joint venture between your company and SCM Real Estate (Singapore) Private Limited, is developing in collaboration with a developer and land owning companies, a group housing project at NCR on approximately 6.79 acres and a residential project at Bangalore on approximately 5.85 acres. The company is exploring the possibility of undertaking additional projects in residential development segment in India.

Mahindra Water Utilities Limited (MWUL) a 50 per cent joint venture company is engaged in the business of operation and management of water and sewerage facilities at Tirupur, India.

Mahindra Inframan Water Utilities Private Limited (MIWUPL) a 50 per cent joint venture company is engaged in the business of operation and management of water and sewerage facilities at Navi Mumbai, India.

ASSOCIATE COMPANIES

Topical Developers Private Limited and Kismat Developers Private Limited, the associate companies of your Company are looking out for appropriate business opportunities in the space of real estate development.

During the year, except Mahindra Industrial Park Chennai Limited which became a subsidiary of the Company, no other company has became/ceased to be a Subsidiary/ Associate/ Joint Venture company of the Company.

CONSOLIDATED FINANCIAL STATEMENT

The audited consolidated financial statement of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21 on consolidated financial statement read with AS 23 on accounting for investments in Associates and AS 27 on financial reporting of interest in joint ventures issued by the Institute of Chartered Accountants of India forms part of this Annual Report.

The financial statements of Subsidiaries, Associates and Joint Venture companies are not attached alongwith the financial statement of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the Company and the same is available at the weblink: http://www. mahindralifespaces.com/reports/annual-reports.aspx?yid=10 The Company Secretary will make these documents available upon receipt of a request from any member of the Company interested in obtaining the same. These documents will also be available for inspection at the Registered Office of your Company during working hours up to the date of the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report, which gives a detailed account of state of affairs of the Company''s operations forms a part of this Annual Report.

CORPORATE GOVERNANCE

A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

SUSTAINABLE DEVELOPMENT

Your Company has been at the forefront of the real estate industry in India to achieve the mission of ''Transforming urban landscapes by creating sustainable communities''. The Company has done this by putting sustainability as a core agenda for the Company. The details of Company''s approach to sustainability are covered in the Sustainability Report at pages 161 to 168 of this Report.

The Business Responsibility Reporting (BRR) as part of the Annual Report as required by Clause 55 of the Listing Agreement

with the Stock Exchanges and pursuant to the Securities and Exchange Board of India''s circular (CIR/CFD/DIL/8/2012 dated August 13, 2012) are not applicable to your Company for the financial year ended on 31st March, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company''s guiding principle for CSR is to build its relationship with stakeholders and the community at large, and contribute to their long term social good and welfare. Your Company has been investing one per cent of its profit after tax every year from 2005-06 in CSR activities even when there were no statutory requirements in this regard. The Company, in every financial year commencing from 1st April, 2014, in line with the Companies Act, 2013, pledges to spend, two per cent of the average net profits made during the three immediately preceding financial years specifically towards CSR initiatives.

The Company has constituted Corporate Social Responsibility Committee comprising of Mr. Arun Nanda - Non Executive, Non-Independent Director, Mr. Anil Harish - Non Executive Independent Director and. Ms. Anita Arjundas - Managing Director & CEO. Mr. Anil Harish resigned from the Board of Directors of the Company w.e.f. 16th June, 2015 and consequently ceased to be member of the Corporate Social Responsibility Committee effective 16th June, 2015. The Board at its meeting held on 19th June, 2015 has nominated Mr. Shailesh Haribhakti, a Non-executive Independent Director on the Corporate Social Responsibility Committee. The Role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend amount of expenditure to be incurred on CSR activities, to monitor the CSR policy of the Company from time to time and to institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company.

The Company''s CSR Policy lays out the vision, objectives and implementation mechanisms. The Company''s CSR policy is available on the Company''s web link at http://www. mahindralifespaces.com/pdf/mldl%20csr%20policy-final-cln.pdf The Company''s CSR activities have traditionally focussed on education, skill development, health, environment and promoting sustainable practices.

The objective of CSR policy is to:

- Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Company''s philanthropic activities, thus enabling maximum impact of the CSR initiatives;

- Ensure an increased commitment at all levels in the organisation, to operate in an economically, socially and environmentally responsible manner while recognising the interests of all its stakeholders;

- Encourage employees to participate actively in the Company''s CSR and give back to the society in an organised manner through the employee volunteering programme called ESOPs.

The Company has spent Rs. 264 lakhs as against the required CSR expenditure of Rs. 262 lakhs calculated in the manner prescribed in the Companies Act, 2013. The annual report on the CSR activities in the prescribed format is at Annexure 2 to this Report;

The Company''s commitment to CSR will be manifested by investing resources in any of the following areas:

- Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;

- Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;

- Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

- Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water;

- Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;

- Measures for the benefits of armed veterans, war widows and their dependents;

- Training to promote rural sports, nationally recognised sports, Paralympics sports and Olympic sports;

- Contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Castes, the Scheduled Tribes, other backward classes, minorities and women;

- Contribution or funds provided to technology incubators located within academic institutions which are approved by the Central Government;

- Rural development projects

The Company shall give preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities.

Details of the Company''s approach towards CSR including overview of projects or programmes undertaken / proposed to be undertaken are covered in the Sustainability Report at pages 161 to 168 of this Annual Report.

DIRECTORS

Pursuant to Section 152 of the Companies Act, 2013, Mr. Uday Phadke (DIN: 00030191) a Non-executive and Non-independent Director retires by rotation at the 16th Annual General Meeting of the Company and is eligible for re-appointment. However, Mr. Uday Phadke has expressed his desire not to seek re- appointment. It is recommended that the vacancy, so created on the Board of Directors of the Company, be not filled.

The Board places on record its deep appreciation of the valuable services rendered by Mr. Phadke during his tenure as a Director of the Company. Mr. Phadke, who is stepping down from the Board of the Company after a tenure of 14 years, brought to the Board an ebullient spirit and a flair for reasoned risk taking, combined with a strict adherence to values and ethics. This rare combination of qualities has added a valuable perspective and dimension to the deliberations and decision making authority of the Board.

Mr. Anil Harish (DIN: 00001685), a Non-executive Independent Director resigned from the Board of the Company w.e.f. 16th June, 2015 for personal reasons. The Board places on record its deep appreciation for the valuable services rendered by Mr. Anil Harish during his tenure as a Director of the Company.

Pursuant to Section 152 of the Companies Act, 2013, Mr. Arun Nanda (DIN : 00010029) a Non-executive and Non-independent Director retires by rotation at the 16th Annual General Meeting of the Company and being eligible has offered himself for re- appointment.

Mr. Shailesh Haribhakti (DIN: 00007347) was appointed as an Independent Director for a term from the date of the 15th Annual General Meeting till the conclusion of the 16th Annual General Meeting of the Company. His first term of appointment shall come to an end on the date of the 16th Annual General Meeting. Mr. Haribhakti is eligible for appointment for the second term as an Independent Director not liable to retire by rotation. He has also given a declaration under Section 149(7) of the Companies Act, 2013 that he meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

Pursuant to Section 149 and Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, it is proposed that Mr. Shailesh Haribhakti existing Independent Director who meets the criteria of independence, be appointed as an Independent Director of the Company, not liable to retire by rotation, for the second term to hold office for a term of 5 (five) consecutive years from commencing from 31st July, 2015. The Directors have recommended passing of Special Resolution in this regard.

Mr. Sanjiv Kapoor (DIN: 00004005) and Dr. Prakash Hebalkar (DIN: 00370499) were appointed as Independent Directors for a term from the date of the 15th Annual General Meeting till the conclusion of the 16th Annual General Meeting of the Company. Their first term of appointment shall come to an end on the date of the 16th Annual General Meeting. Both Mr. Kapoor and Dr. Hebalkar are eligible for appointment for the second term as Independent Directors not liable to retire by rotation. They have also given a declaration under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013.

Pursuant to Section 149 and Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, it is proposed that Mr.Sanjiv Kapoor and Dr. Prakash Hebalkar existing Independent Directors who meet the criteria of Independence, be appointed as Independent Directors of the Company, not liable to retire by rotation, for the second term to hold office for a term of 2 (two) consecutive years commencing from 31st July, 2015. The Directors have recommended passing of Special Resolutions in this regard.

All the above Directors i.e. Mr. Arun Nanda, Mr. Shailesh Haribhakti, Mr. Sanjiv Kapoor and Dr. Prakash Hebalkar are not disqualified from being re-appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, evaluation of every Director''s performance was done by Nomination and Remuneration Committee. The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairperson of the Company was carried out by the Independent Directors. Evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Director being evaluated. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the evaluation such as adequacy of the size and composition of the Board and Committee thereof with regard to skill, experience, independence, diversity, attendance and adequacy of time given by the Directors to discharge their duties, Corporate Governance practices etc. The Directors expressed their satisfaction with the evaluation process.

The details of familiarisation programme for Independent Directors have been disclosed on website of the Company and is available at the link: http://www.mahindralifespaces. com/pdf/mldl%20_familiarisation%20programme%20for%20 independent%20directors.pdf

The following policies of the Company are attached herewith and marked as Annexure 3, Annexure 4A and Annexure 4B.

1. Policy on appointment of Directors and Senior Management (Annexure3);

2. Policy on Remuneration of Directors (Annexure 4A); and

3. Policy on Remuneration of Key Managerial Personnel and Employees (Annexure 4B).

The Managing Director & CEO draws remuneration only from the Company and does not receive any remuneration or commission from any of its subsidiary companies / holding company.

KEY MANAGERIAL PERSONNEL

During the year under review, the Company has appointed following persons as Key Managerial Personnel under the Companies Act, 2013:

Sr.Name of the person Designation no.

1. Ms. Anita Arjundas Managing Director & CEO

2. Mr. Suhas Kulkarni Company Secretary

3. Mr. Jayantt Manmadkar Chief Financial Officer

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year seven Board Meetings were convened and held the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year on 31st March, 2015 and of the profit of the Company for that period;

(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared the annual accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statement. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function, significant internal audit findings and follow-ups thereon.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company as on 31st March, 2015 comprised of three independent Directors, namely Mr. Sanjiv Kapoor, Mr. Shailesh Haribhakti, Mr. Anil Harish and one Non- Executive Non-Independent Director, Mr. Uday Y Phadke. Mr. Sanjiv Kapoor is the Chairman of the Committee. Mr. Anil Harish has resigned from the Board of the Company effective 16th June, 2015 and consequently ceases to be a member of the Audit Committee effective 16th June, 2015. All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman, the Managing Director & Chief Executive Officer, Chief Financial Officer, the Internal Auditors and Statutory Auditors are regularly invited to attend the Audit Committee Meetings. The Company Secretary is the Secretary to the Committee. The Internal Auditor reports to the Audit Committee. The significant audit observations and corrective action taken by the management are presented to the Audit Committee. The Board has accepted all recommendations of the Audit Committee made from time to time.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism by adopting a Whistle Blower Policy for Directors and employees to report genuine concerns in the prescribed manner. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimization of employees and Directors. Whistle Blower Policy is a mechanism to address any complaint(s) related to fraudulent transactions or reporting intentional non-compliance with the Company''s policies and procedures and any other questionable accounting/operational process followed. It provides a mechanism for employees to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell. During the year, no such incidence was reported and no personnel were denied access to the Chairman of the Audit Committee or Chairman of the Company or the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web link : http:// www.mahindralifespaces.com/pdf/mldl-whistleblowerpolicy.pdf

RISK MANAGEMENT

The Company already has in place the procedure to inform the Board about the risk assessment and minimization procedures. Your Company has appropriate risk management systems in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Your Company has constituted a "Risk Management Committee" consisting of two Directors and the Chief Financial Officer, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. The Board periodically reviews implementation and monitoring of the risk management plan for the Company including identification therein of elements of risks, if any, which in the opinion of the Board may threaten the existence of the Company.

AUDITORS

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, retire as Auditors at the 16th Annual General Meeting. As required under the provisions of Section 139 and 141 of the Companies Act, 2013, the Company has received a written consent and certificate from M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, proposed to be re-appointed as Auditors for one year i.e. upto conclusion of the 17th Annual General Meeting of the Company, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section and that they are not disqualified to be appointed as Auditors of the Company. The Board has recommended to the shareholders re-appointment of M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, as the Auditors to hold office from the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration.

The notes of the financial statements referred to in the Auditor''s Report are self-explanatory and do not call for any further comments. The Auditor''s Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board of Directors, on recommendation of the Audit Committee, has appointed M/s. A. B. Nawal & Associates, Cost Accountants, Pune, as Cost Auditors of the Company, for the Financial Year 2014-15, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the Central Government, pursuant to its order dated 30th June, 2014 and any amendments thereof, subject to the approval of the Members on the remuneration to be paid to the Cost Auditor.

Secretarial Auditor

The Board has appointed M/s. Martinho Ferrao & Associates, Practising Company Secretaries to conduct the secretarial audit for the financial year 2014-15. The Secretarial Audit report for the financial year ended 31st March, 2015 is annexed herewith and marked as Annexure 5 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

As your Company is engaged in the business of providing Infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of the same are provided in the standalone financial statement at Note no.13 and 19.

Particulars of investment made under Section 186 of the Companies Act, 2013 are provided in the standalone financial statement at Note no. 12.

Contracts and Arrangements with Related Parties

The Company in its ordinary course of business extends financial assistance to its subsidiary companies, including wholly owned subsidiary companies for their principle business activities. To support the wholly owned subsidiary companies (whose accounts are consolidated with the Company and placed before the shareholders at the general meeting for approval) during their long gestation period of projects, at the request of such wholly owned subsidiary companies, the Company provides loans without charging any interest. Such contracts and arrangements with wholly owned subsidiary companies do not fall into any category of contracts or arrangements envisaged under Section 188 of the Companies Act, 2013 and are considered in accordance with the practice followed by the Company as ''on arm''s length basis''.

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis.

During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

In view of the above, the requirement of giving particulars of contracts / arrangements made with related parties, in Form AOC-2 are not applicable for the year under review.

The Policy on materiality of related party transactions and also on dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.mahindralifespaces.com/pdf/policy%20on%20

materiality%20of%20and%20dealing%20with%20related%20 party%20transactions-website.pdf

Your Directors draw attention of the members to Note 39 to the standalone financial statement which sets out related party disclosures.

Deposits, Loans and Advances

Your Company has not accepted any deposit from the public or its employees during the year under review. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement with the Company, are furnished separately at Annexure 6.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as per Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the Annexure 7 to this report.

Employee Remuneration

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report as Annexure 8 A. None of the employees listed in the said statement is a relative of any Director of the Company. None of the employees hold (by himself/herself or along with his/her spouse and dependent children) more than 2% of the Equity shares of the Company.

The ratio of remuneration of each Director to the median employees'' remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 8 B.

Extract of Annual Return

The details forming part of the Extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure 9 and forms part of this Report.

General

During the year under review, no revision was made in the financial statement of the Company.

During the year ended 31st March, 2015 , there were no cases filed / reported pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

No penalties / strictures were imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter

related to capital market since the listing of the Company''s equity shares. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operation in future.

CAUTIONARY STATEMENT

Certain statements in the Directors'' Report describing the Company''s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company''s operations include labour and material availability, and prices, cyclical demand and pricing in the Company''s principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.

ACKNOWLEDGMENT

The Directors would like to thank all shareholders, customers, bankers, contractors, suppliers, joint venture partners and associates of your Company for the support received from them during the year. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and on behalf of the Board,

Anita Arjundas Shailesh Haribhakti Managing Director & CEO Director DIN:00243215 DIN:00007347 Mumbai, 19th June, 2015 Mumbai, 19th June, 2015


Mar 31, 2014

To the Members

The Directors present their Fifteenth report together with the audited accounts of your Company for the year ended 31st March, 2014.

Financial Highlights (Stand-alone) (Rs. lakh)

2014 2013

Operating Income 30,707 35,152

Other Income 11,426 7,073

Total Income 42,133 42,225

Profit Before Depreciation, Interest and Taxation 14,306 14,383

Less : Depreciation 232 177

Profit Before Interest and Taxation 14,074 14,206

Less : Interest & Finance charges 3,935 618

Profit Before Taxation 10,139 13,588

Less : Provision for Taxation

Current Tax 2,467 3,965

Deferred Tax (including MAT Credit) (101) (126)

Profit After Tax 7,773 9,749

Add : Balance of Profit for earlier years 35,527 29,620

Amount available for appropriation 43,300 39,369

Proposed Dividend on Equity Shares (including tax on distributed Profits) 2,867 2,867

Less : Transfer to General Reserve 777 975

Less: Transfer to Debenture Redemption Reserve 3,136 -

Balance carried forward 36,520 35,527

Dividend

Your Directors have recommended a dividend of Rs. 6 per equity share of the Company, i.e. 60 per cent of the face value of Rs. 10 for each share, for the year 2013-14.

The equity dividend (including tax on distributed Profits) amounts to Rs. 2,867 lakhs (previous year Rs. 2,867 lakhs), and shall be paid out of Profits for the current year.

Operations

Economic performance in India continued to be subdued during 2013 -14. According to the advance estimates released by the Central Statistical Organisation (CSO), India''s GDP growth is pegged at 4.9 per cent in 2013-14, similar to 4.5 per cent during the previous year. This could have been worse had the Agriculture sector not registered a significant uptick in performance.

In contrast, both the Industry and Services sectors recorded a deceleration in growth during the year. In fact, the manufacturing sector, which is the largest segment of Industry, witnessed a contraction for the first time since 1991-92. The construction sector remained fat-growing at a marginally higher 1.7 per cent during 2013-14 as compared to 1.1 per cent during 2012-13.

Even as the real estate industry operated in a difficult economic environment, both operational segments of your Company - residential and integrated developments -showed progress during the year.

In the residential segment, the Company launched two new projects, in Pune and Mahindra World City, Chennai. In addition, fresh inventory in three of its existing project was also launched during the year. During 2013-14, the Company sold over 700 residential units across its ongoing and newly launched projects, including projects of its subsidiary companies in the residential space. Your Company is currently developing 4.68 million square feet of residential projects. Besides, 6.59 million square feet are available in the form of new phases of ongoing projects or new projects that are at different stages of planning. These are expected to be launched in the near future.

In the large format developments, there was improvement in demand from businesses aimed at the domestic market, but the Special Economic Zone (SEZ) demand remained subdued. Mahindra World City, Jaipur, saw a considerable increase in activity during the year with closure of several lease agreements. During 2013-14, the Company leased out around 52 acres, most of which were in the Domestic Tariff Area (DTA).

On account of the challenging environment faced by the industry, the financial performance of Mahindra Lifespaces was impacted. Even though the Total Income of the Company remained stable, the Profitability witnessed a decline during the year due to product-mix changes and increased interest outflows.

The consolidated total income of your Company came down marginally from Rs. 77,249 lakhs in 2012-13 to Rs. 75,620 lakhs in 2013-14. The consolidated PBT stood at Rs. 16,094 lakhs in 2013-14 as compared to Rs. 23,607 lakhs in 2012-13, whereas the consolidated PAT after minority interest was Rs. 10,063 lakhs as compared to Rs. 14,137 lakhs during 2012-13.

Total income of your Company as a standalone entity was Rs. 42,133 lakhs as compared to Rs. 42,225 lakhs in 2012-13. Profit before tax (PBT) was Rs. 10,139 lakhs as compared to Rs. 13,588 lakhs in 2012-13, whereas profit after tax (PAT) was Rs. 7,773 lakhs as compared to Rs. 9,749 lakhs in 2012-13. Total income includes a dividend income of Rs. 953 lakhs received from its subsidiary Mahindra World City Developers Limited and Rs. 518 lakhs received from its subsidiary Mahindra World City (Jaipur) Limited, during the year as compared to Rs. 473 lakhs and Rs. 356 lakhs from Mahindra World City Developers Limited and Mahindra World City (Jaipur) Limited respectively in 2012 -13 .

Awards and Recognition

Your Company and its subsidiaries received several awards and recognitions during 2013-14. Some of the prestigious awards are:

- Mahindra Lifespaces was recognised as one of the "Top 10 Builders" in India by the Construction World Architect and Builder Awards 2013

- Mahindra Lifespaces strong commitment to sustainable development was recognised with the award for "Outstanding Contribution in Real estate" in Green Building project category at the EPC World awards. It was also felicitated for its "Contribution to Green Building Movement" by CII-IGBC

- Mahindra Lifespaces won the "Emerging Markets — Most Improved in Adoption of Best Practices" merit award at the annual Asia Pacific Real Estate Association (APREA) Best Practices Awards. The award recognises those listed real estate companies who perform best in the area of governance and disclosure.

Capital

During the year, the Company allotted 8,700 equity shares of Rs. 10 each to the eligible grantees pursuant to exercise of Stock options granted under Employee Stock Option Scheme - 2006 (ESOS - 2006) and Employee Stock Option Scheme - 2012 (ESOS - 2012). Accordingly, issued equity share capital has increased from Rs. 408,805,010 to Rs. 408,892,010 and the subscribed and paid up equity share capital of the Company has increased from Rs. 408,396,500 to Rs. 408,483,500.

The allotment of 40,851 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956, till such time the title of the bonafde owner of the shares is certified by the concerned Stock Exchange or The Special Court (Trial of offenses relating to transactions in Securities).

Issue & allotment of Non- convertible Debentures

On 4th April, 2013, the Company issued and allotted 5,000 – Secured Listed Rated Redeemable 10.78 per cent YTM, Non- Convertible Debentures (NCDs) with a face value of Rs. 1,000,000 (Rupees Ten lakhs Only) each for cash at par, aggregating Rs. 500 crores vide Series I, Series II, and Series III on Private Placement basis.

The funds are being utilised to part finance any of the following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions (e) Cost of Construction, (f) to invest into any existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (g) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks.

Employee Stock Options Scheme

In accordance with the Employee Stock Option Scheme – 2006 (ESOS – 2006), the Remuneration Committee (now Nomination and Remuneration Committee) has on 25th April, 2008, approved grant of 678,359 Stock Options to the employees at an exercise price of Rs. 428 per share. In accordance with ESOS – 2006, the Remuneration Committee, on 4th August, 2012, approved grant of 10,000 Stock Options to Dr. Prakash Hebalkar, a Non-executive Independent Director of the Company at an exercise price of Rs. 325 per share.

As of 31st March, 2014, 28,500 Stock Options were exercised under ESOS - 2006.

In accordance with the Employee Stock Option Scheme (ESOS– 2012), the Remuneration Committee (now Nomination and Remuneration Committee) has on 4th August, 2012 and on 24th July, 2013, approved grant of 101,000 and 26,500 Stock Options, respectively, at an exercise price of Rs. 10 each which is equal to the face value of the equity share of the Company.

As of 31st March, 2014, 6,200 Stock Options were exercised under ESOS - 2012.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided as Annexure 1 to this Report.

Holding Company

The promoters of the Company i.e. Mahindra & Mahindra Limited (M&M) hold 20,846,126 equity shares which represents 51.03 per cent of the paid-up equity capital of the Company. Your Company continues to be a subsidiary company of M&M.

Subsidiary Companies

The developments during the year in key subsidiary companies are provided below:

Mahindra World City Developers Limited (MWCDL) a 89:11 SPV between your Company and Tamil Nadu Industrial Development Corporation (TIDCO), has developed India''s first integrated business city and corporate India''s first SEZ near Chennai. The three sector-specific SEZs cater to the industry sectors viz. IT (services and manufacturing), Apparel & Fashion Accessories, and Auto Ancillaries and the Domestic Tariff Area caters to a wide range of manufacturing segments. The total development currently stands at 1,524 acres. MWCDL for its second project in Tamil Nadu, is in the process of procuring the land. It is the first township in India to receive Green Township Certification (Stage I Gold certification) from IGBC.

Mahindra Integrated Township Limited (MITL) is engaged as a co-developer in developing the residential township area at Mahindra World City. Its current developments include ''Iris Court'' and Rs.Nova''. MITL has a balance of approximately 140 acres to be developed in phases for offering products in different formats and segments. MITL is 74 per cent owned by your Company and 26 per cent by MWCDL.

Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), is developing a gated residential community in approximately 55 acres within Mahindra World City, New Chennai under the name, "Aqualily".

Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between your Company and B.E. Billimoria & Co. Limited, one of the leading construction companies in India. This company is developing a residential complex across approximately 25 acres at Multi-modal International Hub Airport at Nagpur (MIHAN).

Mahindra World City (Jaipur) Limited (MWCJL) is a 74:26 SPV between your Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO) and is developing an integrated business city near Jaipur spread over approximately 3,000 acres of land. Currently, the project has five zones, IT/ITES SEZ, Handicrafts SEZ, Engineering & Related Industries SEZ, Gems & Jewellery SEZ and a Domestic Tariff Area.

Joint Venture Company

Mahindra Homes Private Limited, a 50:50 joint venture between your company and SCM Real Estate (Singapore) Private Limited, is developing a group housing project at NCR on approximately 6.79 acres and a residential project at Bangalore on approximately 5.85 acres.

The statement pursuant to Section 212 of the Companies Act,1956, containing details of the Company''s subsidiaries, viz. Mahindra World City Developers Limited, Mahindra Integrated Township Limited, Mahindra Residential Developers Limited, Mahindra World City (Jaipur) Limited, Mahindra World City (Maharashtra) Limited, Knowledge Township Limited, Industrial Township (Maharashtra) Limited, Mahindra Bebanco Developers Limited, Raigad Industrial & Business Park Limited, Mahindra Infrastructure Developers Limited, Anthurium Developers Limited, and Mahindra Housing Private Limited is attached.

The consolidated financial statements of the Company prepared in accordance with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, form part of the Annual Report and Accounts. The summary of financial performance of the subsidiaries has been separately furnished forming part of the Annual Report.

Ministry of Corporate Affairs (MCA), Government of India (GOI), vide its General Circular No. 2/2011 dated 8th February, 2011 has granted a general exemption from the requirement of attaching the Balance Sheet and Statement of Profit & Loss and Notes forming part of the Accounts, Report of the Board of Directors, Report of the Auditors etc., of subsidiary companies with the Annual Accounts of the Company under Section 212(8) of the Companies Act, 1956, subject to compliance of conditions mentioned therein.

In terms of the aforesaid general exemption granted by MCA, the Board of Directors of the Company has given its consent for not attaching the Balance Sheet and Statement of Profit & Loss and Notes forming part of the Accounts, Report of the Board of Directors, Report of the Auditors etc., of its aforesaid twelve subsidiaries with the Annual Accounts of the Company, in relation to the financial year ending on 31st March, 2014.

The Company Secretary will make these documents available upon receipt of a request from any member of the Company interested in obtaining the same. These documents will also be available for inspection at the Registered Office of your Company and the Registered Offices of the respective subsidiary companies during working hours up to the date of the Annual General Meeting.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report, which gives a detailed account of operations of your Company forms a part of this Annual Report.

Corporate Governance

A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

Sustainable Development

Your Company is committed to the principles of sustainable development and consistently carries out initiatives to benefit the communities that it interacts with during the course of its business. A detailed account of these initiatives has been presented in the Management Discussion and Analysis chapter of the Annual Report.

Your Company has followed the Global Reporting Initiative (GRI) Sustainability Reporting G3.1 Guidelines which is the most widely adopted non-financial reporting framework in the world and used to help communicate sustainability performance while encouraging transparency and accountability.

Your Company''s ''Sustainability Report'' has achieved an A rating for meeting the requirements of GRI G3.1 guidelines. Besides this, the Company continues to report its triple bottom- line performance as a part of the Mahindra Group''s sustainability report.

Corporate Social Responsibility (CSR)

Your Company''s CSR strategy is to contribute to the local communities that it operates in by focusing on three key areas of intervention: education, skill development, health and environment.

Your Company has been investing 1 per cent of its Profits after tax every year into CSR activities. The Company in every financial year commencing from 1st April, 2014, in line with the new Companies Act 2013, pledges to spend, at least 2 per cent of the average net Profits made during the three immediately preceding financial years specifically towards CSR initiatives.

Directors

Pursuant to Section 152 of the Companies Act, 2013, Mr. Arun Nanda (DIN : 00010029), Non-executive and Non-independent Director retires by rotation at the 15th Annual General Meeting of the Company and is eligible for re-appointment.

Pursuant to Section 149 and Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Shailesh Haribhakti (DIN : 0007347), retires by rotation at the forthcoming Annual General Meeting of the Company. He is eligible for re-appointment as an Independent Director not liable to retire by rotation. It is proposed that he be appointed as an Independent Director of the Company, not liable to retire by rotation, from the date of 15th Annual General Meeting till the conclusion of the 16th Annual General Meeting of the Company. Pursuant to Section 149 and Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, it is proposed that Mr. Sanjiv Kapoor (DIN : 00004005), Mr. Anil Harish (DIN : 00001685), and Dr. Prakash Hebalkar (DIN : 00370499), existing Directors who meet the criteria of Independence, be appointed as Independent Directors of the Company, not liable to retire by rotation, from the date of 15th Annual General Meeting till the conclusion of the 16th Annual General Meeting of the Company.

All the above Directors i.e. Mr. Arun Nanda, Mr. Shailesh Haribhakti, Mr. Sanjiv Kapoor, Mr. Anil Harish, and Dr. Prakash Hebalkar are not disqualified from being re-appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013 (erstwhile section 274(1)(g) of the Companies Act, 1956).

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Auditors

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, retire as Auditors at the forthcoming Annual General Meeting. The members will be required to appoint Auditors in terms of relevant provisions of the Companies Act, 2013 and fix their remuneration.

As required under the provisions of Section 139 and 141 of the Companies Act, 2013, the Company has received a written consent and certificate from M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, proposed to be re-appointed as Auditors for one year i.e. upto conclusion of the 16th Annual General Meeting of the Company, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

Deposits, Loans and Advances

Your Company has not accepted any deposits from the public or its employees during the year under review. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement with the Company, are furnished separately.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure 2 to this report.

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 and Rules made there under

The Company had 13 (Thirteen) employees who were in receipt of remuneration of not less than Rs. 6,000,000 per annum during the year ended 31st March, 2014 or not less than Rs. 500,000 per month during any part of the said year. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report and Accounts which are being sent to the shareholders need not include this Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Company.

Acknowledgment

The Directors would like to thank all shareholders, customers, bankers, contractors, suppliers, joint venture partners and associates of your Company for the support received from them during the year. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and on behalf of the Board,

Arun Nanda

Chairman

Mumbai, 22nd April, 2014 DIN : 00010029


Mar 31, 2013

The Directors present their Fourteenth report together with the audited accounts of your Company for the year ended 31st March, 2013.

Financial Highlights

(Rs. lakh)

2013 2012

Operating Income 35,152 46,895

Other Income 7,073 5,217

Total Income 42,225 52,112

Profit Before Depreciation, Interest and Taxation 14,383 17,320

Less : Depreciation 177 268

Profit Before Interest and Taxation 14,206 17,052

Less : Interest & Finance charges 618 297

Profit Before Taxation 13,588 16,755

Less : Provision for Taxation

Current Tax 3,965 4,859

Deferred Tax (including MAT Credit) (126) (120)

Profit After Tax 9,749 12,016

Add : Balance of Profit for earlier years 29,620 21,654

Amount available for appropriation 39,369 33,670

Proposed Dividend on Equity Shares (including tax on distributed profits) 2,867 2,848

Less : Transfer to General Reserve 975 1,202

Balance carried forward 35,527 29,620

An increasing number of projects were operationalised during the year, in various subsidiaries, resulting in a growth in consolidated income from Rs. 72,841 lakh in 2011-12 to Rs. 77,249 lakh in 2012-13. The growth in after minority interest increased to Rs. 14,137 lakh from Rs. 11,908 lakh during 2011-12.

Dividend

Your Directors have recommended a dividend of Rs. 6 per equity share of the Company, i.e. 60 per cent of the face value of Rs. 10 for each share, for the year 2012-13.

The equity dividend (including tax on distributed profits) amounts to Rs. 2,867 lakh (previous year Rs. 2,848 lakh), and shall be paid out of profits for the current year.

Operations

The economic environment in India remained subdued during the year, with sharp deceleration in the GDP growth and persistent high inflation. According to the advanced estimates released by the Central Statistical Organisation (CSO), India''s GDP growth is pegged at 5 per cent in 2012-13, down from 6.2 per cent during the previous year. This deceleration in growth was seen across all key sectors.

Although the Industry sector on the whole registered a decline, the construction sector, which is the second largest segment of Industry after manufacturing, was a contrast in performance

— growing at a marginally higher 5.9 per cent during 2012-13 as compared to 5.6 per cent during 2011-12. However, this performance continues to be significantly lower than the high growth seen in the years preceding the slowdown.

Even as the real estate industry operated in a difficult economic environment, your Company''s focus on execution in the residential segment, coupled with strong sales momentum and new customer additions in Mahindra World City Chennai and Jaipur, have contributed to the robust performance this year.

In the residential segment, the Company launched two new projects in Hyderabad and Pune in addition to new phases of three of its existing projects. All new projects / phases of the Company launched during the year received an impressive response. During the year, the Company along with its subsidiary companies sold over 800 residential units across its ongoing and newly launched projects / phases. Your Company is currently developing 4.41 million square feet of residential projects. Besides, 5.41 million square feet are available in the form of new phases of ongoing projects or new projects that are at different stages of planning. These are expected to be launched in the near future.

In the large format developments, the demand situation improved in the Domestic Tariff Area (DTA), even as the demand for space in the Special Economic Zone (SEZ) continued to be relatively muted, given the overall Indian export performance status across relevant segments.

The consolidated total income of your Company increased from Rs. 72,841 lakh in 2011-12 to Rs. 77,249 lakh in 2012-13. The consolidated PBT grew by 26 per cent from Rs. 18,806 lakh in 2011-12 to Rs. 23,607 lakh in 2012-13, whereas the consolidated PAT after minority interest increased to Rs. 14,137 lakh from Rs. 11,908 lakh during 2011-12.

Total income of your Company as a standalone entity was Rs. 42,225 lakh as compared to Rs. 52,112 lakh in 2011-12. Profit before tax (PBT) was Rs. 13,588 lakh as compared to Rs. 16,755 lakh in 2011-12, whereas profit after tax (PAT) was Rs. 9,749 lakh as compared to Rs. 12,016 lakh in 2011-12. Total income includes a dividend income of Rs. 473 lakh received from its subsidiary Mahindra World City Developers Limited and Rs. 356 lakh received from its subsidiary Mahindra World City (Jaipur) Limited, during the year.

Awards and Recognition

Your Company and its subsidiaries received several awards and recognitions during 2012-13. Some of the prestigious awards are:

- Mahindra Lifespaces was presented with the Institute for Competitiveness (IFC) Mint Strategy Award in the Construction, Real Estate & Steel Industry, at the inaugural launch of the Porter Prize Awards in India recently. These awards recognize the positive impact of top Indian companies on the performance of the overall industry.

- Mahindra Lifespaces'' strong commitment to sustainable urban living was recognized with a Certificate of Commendation at the CII-ITC Sustainability Award 2013, recently presented in New Delhi by the Honourable President of India.

- At the CNBC Real Estate Awards 2012 in December, Mahindra World City Chennai received the award for ''Best Project Execution'' (National Level) and Mahindra Royale in Pune received the City- wise Best Residential project (Mid Segment).

- At the Construction Week India Awards, Mahindra Chloris project in Faridabad won a Jury Special Commendation Award for ''Green Project of the Year''.

- Mahindra Lifespaces was awarded the Silver EDGE for the implementation of a ''Statutory Compliance Dashboard''. Two more EDGE Awards were won by the Company for the implementation of Sparkle, the Company''s intranet portal, and for SAP CRM.

Capital

During the year, the Company allotted 4,500 equity shares of Rs. 10 each out of 46,151 equity shares of Rs. 10 each which were held in abeyance, pursuant to the Order of the Special Court (Trial of Offences relating to transactions in Securities) Act, 1992. Accordingly, the subscribed and paid up equity share capital of the Company has increased from 40,835,150 equity shares to 40,839,650 equity shares of Rs. 10 each aggregating to Rs. 408,396,500.

The allotment of 40,851 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956, till such time the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or The Special Court (Trial of offenses relating to transactions in Securities).

Issue & allotment of Non- convertible Debentures

On 4th April, 2013, the Company issued and allotted 5,000 - Secured Listed Rated Redeemable 10.78% YTM, Non- Convertible Debentures (NCDs) with a face value of Rs. 1,000,000 (Rupees Ten Lakh Only) each for cash at par, aggregating Rs. 500 crore vide Series I, Series II, and Series III on Private Placement basis.

The funds will be utilised to part finance any of the following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions (e) Cost of Construction, (f) to invest into any existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (g) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks.

Employee Stock Options Scheme

In accordance with the Employee Stock Option Scheme - 2006 (ESOS - 2006), the Remuneration Committee has on 25th April, 2008, approved grant of 678,359 Stock Options to the employees at an exercise price of Rs. 428 per share. In accordance with ESOS - 2006, the Remuneration Committee, on 4th August, 2012, approved further grant of 10,000 Stock Options to Dr. Prakash Hebalkar, a Non-executive Independent Director of the Company at an exercise price of Rs. 325 per share.

As of 31st March, 2012, 26,000 Stock Options were exercised under ESOS - 2006.

In accordance with the Employee Stock Option Scheme (ESOS - 2012), the Remuneration Committee has on 4th August, 2012, approved grant of 101,000 Stock Options at an exercise price of Rs. 10/- each which is equal to the face value of the equity share of the Company.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided as Annexure 1 to this Report.

Holding Company

The promoters of the Company i.e. Mahindra & Mahindra Limited (M&M) hold 20,846,126 equity shares which represents 51.04 per cent of the paid-up equity capital of the Company. Your Company continues to be a subsidiary company of M&M.

Subsidiary Companies

The developments during the year in key subsidiary companies are provided below:

Mahindra World City Developers Limited (MWCDL) has developed India''s first integrated business city & corporate India''s first SEZ near Chennai. The three sector-specific SEZs cater to the industry sectors viz. IT (services and manufacturing), Apparel & Fashion Accessories, and Auto Ancillaries and the Domestic Tariff Area caters to a wide range of manufacturing segments. The total development currently stands at 1,550 acres. MWCDL has also procured around 516 acres of land for its second project in Tamil Nadu, and is in the process of procuring the balance land.

Mahindra Integrated Township Limited (MITL) is engaged as a co-developer in developing the residential township area at Mahindra World City with ''Iris Court'', spread over 18 acres, as its first project. MITL has a balance of 147 acres to be developed in phases for offering products in different formats and segments.

Mahindra Residential Developers Limited (MRDL), which is a subsidiary of Mahindra Integrated Township Limited (MITL), is developing a gated residential community in approximately 55 acres within Mahindra World City, New Chennai under the name, "Aqualily". During the year, MITL acquired the stake of Velands Investment Limited. Subsequent to this transaction, MRDL is now a 100 per cent subsidiary of MITL.

Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between your Company and B.E. Billimoria & Co. Limited, one of the leading construction companies in India. This company is developing a residential complex across 25 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). This project called ''Bloomdale'' will have a total saleable area of 1.53 million square feet.

Mahindra World City (Jaipur) Limited (MWCJL) is developing an integrated business city near Jaipur spread over approximately 3,000 acres of land. As on 31st March, 2013 MWCJL was in possession of 2,888 acres of land and the procurement of the balance area is in process. Currently, the project has five zones, IT/ITES SEZ, Handicrafts SEZ, Engineering & Related Industries SEZ, Gems & Jewellery SEZ and a Domestic Tariff Area.

The statement pursuant to Section 212 of the Companies Act, 1956, containing details of the Company''s subsidiaries, viz. Mahindra World City Developers Limited, Mahindra Integrated Township Limited, Mahindra Residential Developers Limited, Mahindra World City (Jaipur) Limited, Mahindra World City (Maharashtra) Limited, Knowledge Township Limited, Industrial Township (Maharashtra) Limited, Mahindra Bebanco Developers Limited, Raigad Industrial & Business Park Limited, Mahindra Infrastructure Developers Limited, Anthurium Developers Limited and Watsonia Developers Limited is attached. Mahindra Housing Private Limited (MHPL), a subsidiary was incorporated on 29th March, 2013 and shall have its first financial year from 29th March, 2013 to 31st March, 2014, as such; the requirement of statement pursuant to Section 212 is not applicable for the said company. The consolidated financial statements of the Company prepared in accordance with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, form part of the Annual Report and Accounts. The summary of financial performance of the subsidiaries has been separately furnished forming part of the Annual Report.

Ministry of Corporate Affairs (MCA), Government of India (GOI), vide its General Circular No. 2/2011 dated 8th February, 2011 has granted a general exemption from the requirement of attaching the Balance Sheet and Statement of Profit & Loss and Notes forming part of the Accounts, Report of the Board of Directors, Report of the Auditors etc., of subsidiary companies with the Annual Accounts of the Company under Section 212(8) of the Companies Act, 1956 subject to compliance of conditions mentioned therein.

In terms of the aforesaid general exemption granted by MCA, the Board of Directors of the Company has given its consent for not attaching the Balance Sheet and Statement of Profit & Loss and Notes forming part of the Accounts, Report of the Board of Directors, Report of the Auditors etc., of its aforesaid twelve subsidiaries with the Annual Accounts of the Company, in relation to the financial year ending on 31st March, 2013.

The Company Secretary will make these documents available upon receipt of a request from any member of the Company interested in obtaining the same. These documents will also be available for inspection at the Registered Office of your Company and the Registered Offices of the respective subsidiary companies during working hours up to the date of the Annual General Meeting.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report, which gives a detailed account of operations of your Company forms a part of this Annual Report.

Corporate Governance

A report on Corporate Governance along with a certificate from the Statutory Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

Sustainable Development and Corporate Social Responsibility (CSR)

Your Company is committed to the principles of sustainable development and consistently carries out initiatives to benefit the communities that it interacts with during the course of its business. A detailed account of these initiatives has been presented in the Management Discussion and Analysis chapter of the Annual Report.

Mahindra Lifespaces has followed the Global Reporting Initiative (GRI) Sustainability Reporting G3.1 Guidelines which is the most widely adopted non-financial reporting framework in the world and used to help communicate sustainability performance while encouraging transparency and accountability. Third party assurance has been given by M/s. KPMG after having audited the disclosures.

The Mahindra Lifespaces ''Sustainability Report'' has achieved an A rating for meeting the requirements of GRI G3.1 guidelines. The published report can be viewed worldwide in GRI''s ''Sustainability Disclosure Database''. The summary of the report can also be viewed on Company''s website www.mahindralifespaces.com. Besides this, the Company continues to report its triple bottom-line performance as a part of the Mahindra Group''s sustainability report.

Directors

Mr. Uday Y. Phadke and Mr. Sanjiv Kapoor retire by rotation and being eligible offer themselves for re-appointment.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Auditors

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, retire as Auditors at the forthcoming Annual General Meeting. The members will be required to appoint Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1 B) of the Companies Act, 1956, the Company has received a written certificate from M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, proposing to be re-appointed as Statutory Auditors, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

Deposits, Loans and Advances

Your Company has not accepted any deposits from the public or its employees during the year under review. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement with the Company, are furnished separately.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure 2 to this report.

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 and Rules made thereunder

The Company had 4 (four) employees who were in receipt of remuneration of not less than Rs. 6,000,000 during the year ended 31st March, 2013 or not less than Rs. 500,000 per month during any part of the said year. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors'' Report and Accounts which are being sent to the shareholders need not include this Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Company.

Acknowledgment

The Directors would like to thank all shareholders, customers, bankers, contractors, suppliers, and associates of your Company for the support received from them during the year. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and on behalf of the Board,

Arun Nanda

Chairman

Mumbai, 22nd April, 2013

 
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