Mar 31, 2023
Your Directors present their twenty-fourth report together with the audited financial statement of your Company for the financial year ended on 31st March, 2023.
FINANCIAL HIGHLIGHTS (STANDALONE)
(Rs. In lakh) |
||
2023 |
2022 |
|
Income from Operations |
47,191 |
25,281 |
Other Income |
15,621 |
5,369 |
Total Income |
62,812 |
30,650 |
Profit / (Loss) Before Depreciation, Finance cost and Taxation |
4,436 |
(7,070) |
Less: Depreciation |
966 |
618 |
Profit / (Loss) Before Finance cost and Taxation |
3,470 |
(7,688) |
Less: Finance Cost |
851 |
474 |
Profit / (Loss) Before exceptional item & Taxation |
2,619 |
(8,162) |
Less: Exceptional Item (Income)/Expense |
(12,437) |
(10,412) |
Profit / (Loss) after exceptional item and before Tax |
15,056 |
2,250 |
Less: Provision for Taxation |
||
⢠Current Tax |
- |
- |
⢠Deferred Tax / (Reversal Deferred Tax) |
(69) |
(2,039) |
Profit / (Loss) After Tax |
15,125 |
4,289 |
Add: Balance of Retained earnings of earlier years |
31,459 |
27,139 |
Retained earnings available for appropriation |
46,584 |
31,428 |
Add: Other Comprehensive Income / (Loss)1 |
1 |
31 |
Less: Dividend paid on equity shares |
(3,091) |
- |
Retained earnings carried forward |
43,495 |
31,459 |
1Re-mieasuremierit of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings. |
DIVIDEND
For the Financial Year 2022-23, your Directors, out of the profits of the financial year 2022-23, have recommended a dividend of '' 2.30/- (23 percent) per equity share of face value of '' 10 each on the Share Capital of the Company.
The equity dividend outgo for the Financial Year 2022-23 would absorb a sum of '' 3,563.37 lakh. Dividend will be payable, subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source, to those Members whose names appear in the Register of Members / list of Beneficial Owners as on Wednesday 19th July, 2023 (Book Closure Date). The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.
In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), the Board of Directors of the Company has formulated and adopted a âDividend Distribution Policyâ. The Policy is attached herewith and marked as Annexure 1 and is also available on the Companyâs website at MLDL Dividend Distribution Policy.
During FY 2022-23, no amount has been transferred to any reserves.
OPERATIONS / STATE OF THE COMPANYâS AFFAIRS
Despite global headwinds, India saw remarkable stability in its macroeconomic environment and registered a strong performance during the year. Indiaâs GDP grew by 7% in 2022-23, compared to 9.1% in the previous year, with strong contribution from both private consumption expenditure as well as public investment.
During the year, your Company launched three new projects â Citadel and Nestalgia in Pune, and Eden Kanakpura in Bengaluru. It also launched fresh inventory in six of its existing projects. It registered sales of '' 1,812 crore in 2022-23, which is its best ever performance and significantly higher than '' 1,028 crore achieved in the previous year. Area sold also increased from 1.28 million square feet (msft) in 2021-22 to 2.23 msft in 2022-23.
Overall, in the residential business, the Company is currently developing 6.62 msft with another 7.07 msft available in the form of forthcoming projects â new phases of ongoing projects and new projects that are under planning.
The integrated cities and industrial clusters business also witnessed strong growth during the year, with leasing of 158 acres of land in 2022-23, compared to 111 acres in the previous year. Most of the leasing activity during the year happened in Mahindra World City, Jaipur and Origins Chennai. Total lease premium generated in 2022-23 was '' 456 crore, again a considerable increase over '' 297 crore generated in 2021-22.
Total income of your Company as a standalone entity increased from '' 30,650 lakh in 2021-22 to '' 62,812 lakh in 2022-23. The Company reported a profit before taxes of '' 2,619 lakh in 2022-23. After accounting for an exceptional gain, profit before taxes (PBT) stood at '' 15,056 lakh. Profit after taxes (PAT) in 2022-23 was '' 15,125 lakh as compared to '' 4,289 lakh in 2021-22.
Total consolidated income of your Company increased from '' 40,824 lakh in 2021-22 to '' 65,956 lakh in 2022-23. PBT after incorporating share in profit of Associates stood at '' 3,786 lakh in 2022-23. After accounting for an exceptional gain, PBT increased to '' 10,567 lakh in 2022-23. Consolidated PAT was ''10,283 lakh in 2022-23.
The Company recorded an exceptional gain on account of (a) successful launch of a phase of an existing residential project, âLuminareâ at NCR developed by Mahindra Homes Private Limited (MHPL), a subsidiary and also joint venture of the Company and (b) de-recognization of Companyâs
investment in the subsidiaries of the Company, viz. Mahindra Integrated Township Ltd. (MITL) and Mahindra Residential Developers Ltd. (MRDL) which got amalgamated with one of the subsidiaries, Mahindra World City Developers Ltd. (MWCDL). Based on carrying value of companyâs investment in MHPL and estimated Net Present Value of forecasted cash flows expected to be generated by MHPL and fair value of consideration due to amalgamation of MITL and MRDL, the Company registered exceptional gain of '' 12,437 lakh and '' 6,780 lakh in the standalone and consolidated financial results, respectively, for the year ended March 31, 2023.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.
AWARDS AND RECOGNITION
Your Company and its subsidiaries received several awards and recognitions during the financial year 2022-23, a testimony to the Companyâs well established policies and process and its continuous efforts to drive sustainability across value chain Some of the prestigious awards received are as under:
⢠The Company was awarded as one of âIndiaâs Top Builders 2022â in the National category by Construction World Architect and Builder Awards 2022.
⢠The Company ranked â1st in Asia in Public Disclosureâ (3rd year in a row) by Global Real Estate Sustainability Benchmark.
⢠The Company received âLeadershipâ status in 2022 under Climate Change and Water Security category by Carbon Disclosure Project (CDP). Your Company is the only real estate company from India to receive Double A rating by CDP for Climate Change and Water Security.
⢠The Company is awarded as a âSupplier Engagement Leader 2022â by CDP.
⢠The Company bagged 1st position in âSustainability Performance Awardâ category in 13th edition of Corporate Governance & Sustainability Vision Awards - 2022 (4th year in a row) by Indian Chamber of Commerce.
⢠Mahindra World City, Chennai is awarded as âBest Smart city/Sub city Projectsâ by Construction Industry Development Council (CIDC) Vishwakarma Awards.
⢠Awarded innovative Marketing Concept of the Year for the project - Mahindra Nestalgia at 14th Realty Conclave & Excellence Awards 2023 in Pune Region.
During the year, the Company has issued and allotted 50,000 and 99,921 equity shares of '' 10 each to the eligible employees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2006 (ESOS - 2006) and Employee Stock Option Scheme - 2012 (ESOS - 2012), respectively.
Consequently, the issued equity share capital of the Company has increased from '' 15,467.05 lakh to '' 15,482.04 lakh and the subscribed and paid-up equity share capital of the Company has increased from '' 15,451.73 lakh to '' 15,466.72 lakh.
The allotment of 153,189 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (now corresponding to Section 126 of the Companies Act, 2013), till such time the title of the bona fide owners 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.
Beginning 1st April, 2023 till the date of the Report, Nomination Remuneration Committee (NRC) approved grant of total 68,929 Stock Options under ESOS-2012 to the eligible employees, at an exercise price of '' 10 each which is equal to the face value of the equity share of the Company. No stock options were granted under ESOS-2006.
The Company does not have any scheme envisaged under Section 67 of the Companies Act, 2013 ("the Actâ) in respect of shares on which voting rights are not directly exercised by the employees.
During the year, no change was made to the existing schemes
i.e. ESOS - 2006 and ESOS - 2012. The existing schemes are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB&SE Regulations) and other applicable Regulations and Circulars in force, from time to time.
A certificate from the Secretarial Auditor will be placed before the members at the Annual General Meeting confirming that the above-mentioned Schemes i. e. ESOS-2006 and ESOS-2012 have been implemented by the Company in accordance with SBEB&SE Regulations and resolution passed by the Members of the Company.
The disclosure in relation to ESOS-2006 and ESOS-2012 under the SBEB&SE Regulations is uploaded on the website of the Company at www.mahindralifespaces.com
HOLDING COMPANY
As on 31st March, 2023, the Promoter and the Holding company i.e. Mahindra and Mahindra Limited (M&M) holds 7,93,19,550 equity shares representing 51.28 percent of the total paid-up equity capital of the Company. Consequent to allotment of equity shares to eligible employees under ESOS-2006 and ESOS-2012, the percentage shareholding of M&M was reduced by 0.05 percent during the year.
The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013
A report highlighting the performance of each of the subsidiaries, associates and joint venture companies as per the Act, and their contribution to the overall performance of the Company is provided in the consolidated financial statement at note no 44(b).
SUBSIDIARY AND JOINT VENTURE COMPANIES
Mahindra World City (MWC), Chennai, is being implemented by Mahindra World City Developers Limited (MWCDL),
an 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. MWC, Chennai is Indiaâs first integrated business city and corporate Indiaâs first operational SEZ spread across 1,524 acres with a leasable potential of 1,145 acres and comprising of multi sector Special Economic Zones (SEZs) and a Domestic Tariff Area (DTA) and Residential & Social Zone (R&S). It is the first township in India to receive the Green Township Certification (Stage I Gold certification) from IGBC. MWC, Chennai has leased 100 percent of its existing land inventory in the SEZ and DTA, but continues to offer lease options in the R&S. During the year, MWCDL has received an approval from National Company Law Tribunal, Chennai, for amalgamation of Mahindra Integrated Township Limited (MITL) and Mahindra Residential Developers Limited (MRDL) with MWCDL and consequently, MITL and MRDL ceased to exist effective from 30th December, 2022, and all assets and liabilities of MITL and MRDL have been transferred and vested to MWCDL.
Mahindra World City (MWC), Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint
venture between the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. The project is spread across 2,946 acres of land and a leasable potential of 2,011 acres and offers multi product SEZ, along with DTA and Social & Residential Infrastructure. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of MWC, Jaipur. IFC has invested '' 19,480 lakh in MWCJL and is entitled to economic rights to the extent of 50% on 500 acres of gross land comprising first 250 acres of SEZ and first 250 acres of DTA. In FY 2022-23, MWCJL continues its steady performance with leasing revenue of '' 20,100 lakh.
Mahindra Industrial Park Chennai Limited (MIPCL),
is a 60:40 joint venture between MWCDL and Sumitomo Corporation, Japan, respectively. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 289 acres with a leasable potential 209 acres under the brand âOrigins by Mahindra World Cityâ. Till date, MIPCL has leased 127 acres of industrial land. MIPCL has achieved significant milestone with leasing of 52 acres of land to Mitsubishi Electric India Private Limited for setting up a facilty to manufacture air conditioners and compressors. In FY 2022-23, MIPCL has contributed nearly 45 percent of the total leasing revenue of IC&IC business. MIPCL clocked leasing revenue of '' 20,500 lakh as compared to nil leasing revenue in FY2021-22.
Mahindra Industrial Park Private Limited (MIPPL), a wholly owned subsidiary of the Company, has acquired around 340 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster having leasable potential of 255 acres. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of project at Jansali. IFC, till date, has invested '' 7,565 lakh in MIPPL and is entitled to economic rights to the extent of 50% in MIPPL.
Mahindra Homes Private Limited (MHPL), is a 73.38:26.62 joint venture between the Company and Actis Mahi Holding (Singapore) Private Limited (âActisâ), respectively and is developing in collaboration with a developer and landowning companies, a group housing project "Luminareâ at NCR on approximately 6.80 acres. It has completed a residential project "Windchimesâ at Bengaluru on approximately 5.90 acres. In the year 2022-23, MHPL received approval from National Company Law Tribunal, Mumbai for reduction in equity share capital of 17,000 equity shares each of Series B and Series C held by Actis and the Company at an aggregate consideration of '' 7,092.74 lakh each paid to the Company and Actis. In the year 2022-23, MHPL has launched third phase of its existing residential project, âLuminare - Phase 3â with development potential of 0.43 msft.
Mahindra Bloomdale Developers Limited (MBDL) is a
wholly owned subsidiary of the Company. MBDL is developing a gated residential community âBloomdaleâ approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur with development potential upto 1.55 msft of which 1.18 msft is completed and balance is ongoing. In the year 2022-23, MBDL launched a residential project, âNestalgiaâ at Pimpri, Pune on 3.2 acres of land parcel offering development potential of approx. 0.53 msft.
Mahindra Happinest Developers Limited (MHDL) is
a 51:49 joint venture between the Company and HDFC Capital Affordable Real Estate Fund - I (HDFC), respectively. Its project include âHappinest Palghar 1 & 2â, âMahindra Happinest Kalyan -1â having development potential of upto 1.63 msft.
Mahindra Infrastructure Developers Limited (MIDL),
a wholly owned subsidiary of the 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.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance services for water and sewerage facilities at Tirupur, India and is a 98.99% subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.
Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra under the brand âOrigins by Mahindra World Cityâ for which the Company is in the process of procuring the required land area. KTL is focusing on completing necessary compliances and obtaining requisite approvals for acquisition of land parcels to achieve contiguity.
Deep Mangal Developers Private Limited (DMDPL) is a
subsidiary of Mahindra World City (Maharashtra) Limited and consequently a subsidiary of the Company. DMDPL intends to develop approx. 1,300 acres land at Murud on southern coast of Maharashtra as a one-of-its kind tourist destination catering to globally growing need of holistic healthcare and wellness tourism, besides promoting adventure and heritage tourism.
Mahindra World City (Maharashtra) Limited, Industrial Township (Maharashtra) Limited, Moonshine Construction Private Limited, Mahindra Knowledge Park (Mohali) Limited and Anthurium Developers Limited, subsidiaries of the Company are evaluating viable business opportunities.
ASSOCIATE / JOINT VENTURE COMPANIES
In the year 2022-23, the Company has partnered with Actis, a leading global investor in sustainable infrastructure, for developing industrial and logistics real estate facilities across India. As part of the arrangement, the Company or its Affiliates and Actis or its Affiliates will jointly invest in Asset Owning SPVs and in an entity that will provide business services to the Asset Owning SPVs (Service Entity) in the range of 26 to 40 percent by the Company or its Affiliates and balance by Actis or its Affiliates. Accordingly, the Company and an Affiliate entity of Actis has formed a Service Entity, AMIP Industrial Parks Private Limited (AMIP), in which the Company holds 26 percent making it an associate company of the Company.
During the year, two of the subsidiaries, Mahindra Integrated Township Limited and Mahindra Residential Developers Limited, consequent to amalgamation with Mahindra World City Developers Limited, ceased to be the subsidiaries of the Company and AMIP became associate company of the Company.
Except above, no company became or 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 the applicable Accounting Standards along with all relevant documents and the Auditorsâ Report forms part of this Annual Report.
The audited financial statement of each of the subsidiaries is placed on the website of the Company at web link: Mahindra Lifespace Annual Report
The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries 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 operations of the Company and its subsidiaries, forms part of this Annual Report.
A report on Corporate Governance affirming compliance with the Corporate Governance requirements under SEBI LODR forms part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The Company regularly carries out several initiatives that contribute to sustainability and well- being of the environment and communities in which it operates. The Company is committed to demonstrate integration of green and climate responsive designs in our products and it aims to be seen as leader in net zero and climate responsive developments in the years to come. Sustainability is thus a core agenda for the Company. The Business Responsibility & Sustainability Report (BRSR) which provide insights on the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee. As on 31st March, 2023, the CSR Committee comprise one Independent Director, Ms. Amrita Chowdhury, one Non-Executive Non-Independent Director, Ms. Asha Kharga and a Managing Director & CEO, Mr. Arvind Subramanian. Ms. Amrita Chowdhury is the Chairperson of the Committee. The role of the Committee, inter alia, is to formulate and recommend to the Board, a Corporate Social Responsibility Policy, expenditure to be incurred on the CSR activities, an annual action plan in pursuance of its CSR policy etc.
The objective of the CSR policy is to:
⢠Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Companyâs 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 Companyâs CSR and give back to the society in an organised manner through the employee volunteering programme called Employee Social Options.
The Companyâs CSR policy is available on the Companyâs web link at MLDL CSR Policy
The Company registered an average loss during the immediately preceding three financial years and therefore, the provision with respect to CSR spending was not applicable for the financial year ended on 31st March, 2023.
The annual report on the CSR activities is attached herewith and marked as Annexure 2 to this Report.
During the year, Mr. Arun Nanda, the long-serving Chairman of the Company retired from the Board and as Chairman of the Company effective 28th July, 2022. Mr Nanda retired to spend more time with his Foundations working with senior citizens and skilling of youth, particularly in the tribal areas. Mr Nanda joined the Board of the Company in the year 2001 and was appointed as Chairman of the Company in the year 2010. Mr Nanda, an exceptional leader, had a deep impact on the Real Estate Sector of the Mahindra Group. Under his stewardship, the Company forayed into multiple markets and segments and established successful partnerships with marquee private equity players. It was under his guidance, the Company acquired strategic assets at various locations. The Board truly appreciate his contribution to the Mahindra Group, and his pioneering work in setting up the countryâs first SEZ under the PPP model, Mahindra World City at Chennai and later replicating the successful model in Jaipur. His contribution to critical industry areas such as skill development is significant. He remains an integral part of the Mahindra Group as he continues to support the next generation of leaders.
Consequent to above, Mr. Ameet Hariani, Independent Director, was appointed as the Chairman of the Board and the Company effective 28th July, 2022.
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Ms. Asha Kharga (DIN: 08473580), Non-Executive NonIndependent Director retires by rotation at the ensuing 24th Annual General Meeting of the Company and being eligible has offered herself for re-appointment. The Nomination and Remuneration Committee and the Board have recommended her reappointment at the forthcoming Annual General Meeting as a Non-Executive Non-Independent Director of the Company, liable to retire by rotation.
The Board of Directors, pursuant to recommendation of Nomination & Remuneration Committee, appointed Ms. Rucha Nanavati (DIN: 09684920) as an Additional Director in the category of Non-Executive Non-Independent Director and Mr. Anuj Puri (DIN: 00048386) as an Additional Director in the category of Non-Executive Independent Director of the Company effective 28th July, 2022 and 3rd November, 2022,
respectively. Pursuant to Section 161 of the Act, Regulation 17(1C) of LODR Regulations and other applicable provisions, the Shareholders of the Company have approved the appointments of Ms. Rucha Nanavati as a Non-Executive Non-Independent Director, liable to retire by rotation, and Mr. Anuj Puri as a Non-Executive Independent Director for a period of five years commencing from 3rd November 2022 to 2nd November 2027.
During the year, Mr. Arvind Subramanian, Managing Director & CEO of the Company, to pursue his personal interests outside the organization, submitted resignation as the Managing Director & CEO and as a Director of the Company with effect from close of business on 22nd May, 2023. The resignation was noted at the respective meetings of Nomination & Remuneration Committee and the Board of Directors held on 23rd February, 2023. The Board places on record appreciation for the contributions made by Mr. Subramanian during his tenure.
At the same meeting, the Nomination & Remuneration Committee, after considering the qualifications, skillsets, experience, knowledge, ability to devote sufficient time and attention to the professional obligations recommended to the Board appointment of Mr. Amit Kumar Sinha (DIN: 09127387) as an Additional Director in the category of Non-Executive Non-Independent on the Board of the Company effective 23rd February, 2023 and to ensure seamless and smooth transition, as Managing Director (Designate) effective from 23rd February, 2023 to 22nd May, 2023 and as the Managing Director of the Company designated as "Managing Director & Chief Executive Officerâ and a Key Managerial Personnel of the Company for a period of five years effective from 23rd May, 2023 to 22nd May, 2028 (both days inclusive). The Nomination & Remuneration Committee also recommended to the Board remuneration payable to Mr. Amit Kumar Sinha as Managing Director & Chief Executive Officer of the Company. The Board of Directors of the Company, subject to approval of the Members, approved the aforesaid recommendations of the Nomination & Remuneration Committee. The postal ballot seeking approval of the Shareholders for appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent and Managing Director & Chief Executive Officer has been released on 20th April, 2023. The remote e-voting has commenced from Friday, 21st April, 2023 at 9.00 A.M. and shall end on Saturday, 20th May, 2023 at 5.00 P.M. The e-voting results of the postal ballot shall be submitted to Stock Exchanges and hosted on the website of the Company after the end of the voting period.
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.
Brief resume and other details of Ms. Asha Kharga in terms of the Companies Act, 2013, LODR Regulations and Secretarial Standards on General Meeting, are provided in the Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. Ms. Asha Kharga is not disqualified from being reappointed / appointed as Director by virtue of the provisions of Section 164 of the Companies Act, 2013.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in the Companies Act, 2013 and LODR Regulations. The declarations also confirm compliance with sub rule 3 of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014. Further, the Board after taking these declaration/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience (including proficiency) to qualify as Independent Directors of the Company and are independent of the Management.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available at the link MLDL Familiarization.
The salient features of the following policies of the Company are attached herewith and marked as Annexure 3:
1. Policy on appointment of Directors and Senior Management
2. Policy on Remuneration of Directors and
3. Policy on Remuneration of Key Managerial Personnel and Employees
The aforesaid policies are also available at the link MLDL Policies.
The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by Independent Directors. Pursuant to the provisions of the Act, the Nomination & Remuneration Committee (NRC) specified the manner of effective evaluation of the performance of the Board, its Committees and Individual Directors. In terms of manner of performance evaluation specified by the NRC, the performance evaluation of the Board, its committees and individual Directors was carried out by NRC and the Board of Directors. Further, pursuant to Schedule IV of the Act and
Regulation 17(10) of the LODR Regulations, the evaluation of Independent Directors was done by the Board of Directors. For performance evaluation, structured questionnaires, 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. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflected high level of engagement of the Board of Directors and its Committees and its management and that they are fully satisfied with the same.
KEY MANAGERIAL PERSONNEL (KMP)
As on 31st March, 2023, details of Key Managerial Personnel under the Companies Act, 2013 are given below:
As mentioned earlier, consequent to resignation of Mr. Arvind Subramanian, he will cease to be a Managing Director & CEO and accordingly, a Key Managerial Personnel of the Company effective 22nd May, 2023.
Mr. Amit Kumar Sinha has been appointed as the "Managing Director & Chief Executive Officerâ and a Key Managerial Personnel of the Company for a period of five years effective from 23rd May, 2023 to 22nd May, 2028 (both days inclusive).
MEETINGS
During the financial year 2022-23, the Board met six times. Detailed information regarding the meetings of the Board is included in the report on Corporate Governance, which forms part of the Annual Report. The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards on Board Meetings and LODR Regulations as amended from time to time.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) 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
Sr. No. |
Name of the Person |
Designation |
1 |
Mr. Arvind Subramanian |
Managing Director & CEO |
2 |
Mr. Vimal Agarwal |
Chief Financial Officer |
3 |
Mr. Ankit Shah |
Asst. Company Secretary & Compliance Officer |
accounting standards had been followed along with proper explanation relating to material departures;
(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 31st March, 2023 and of the profit and loss 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 are 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.
The Companyâs Financial Statements are prepared on the basis of the Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting Policies are reviewed and updated from time to time. The Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation. The Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. The Companyâs Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in the Companyâs operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such
assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.
As on 31st March, 2023, the Audit Committee of the Company comprises two Non-Executive Independent Directors, Mr. Ameet Hariani and Ms. Amrita Chowdhury and one NonExecutive Non-Independent Director, Ms. Rucha Nanavati. Mr. Ameet Hariani is the Chairman of the Audit Committee. During the year, Mr. Arun Nanda, Non-Executive NonIndependent Director ceased to be a member of the Audit Committee effective 28th July, 2022 and consequently, Ms. Rucha Nanavati was appointed as a member of the Audit Committee effective 28th July, 2022.
All members of the Audit Committee have experience in accounting and financial management matters. 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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to freely report / communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Companyâs Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimisation of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or the Business Ethics & Governance Committee (BEGC) consisting of functional heads. No person was denied access to the Chairman of the Audit Committee or BEGC. The Whistle Blower Policy of the Company is in accordance with the Act and LODR Regulations and the same is available at web link MLDL Whistle Blower Policy. The Policy covers co-ordinates of each of the members of BECG and Chairman of the Audit Committee. The Company has put in place an Ethics helpline managed by an external agency to ensure that any violations to its Code of Conduct (including violation of Human rights)
are addressed objectively. Stakeholders may report any unethical behaviour or violations at https://ethics.mahindra. com or calling toll free number: 000 800 1004175.
As on 31st March, 2023, the Risk Management Committee of the Company comprises one Non-Executive Independent Director, Ms. Amrita Chowdhury, one Non-Executive NonIndependent Director, Ms. Rucha Nanavati, Managing Director & CEO, Mr. Arvind Subramanian and Chief Financial Officer, Mr. Vimal Agarwal. Ms. Amrita Chowdhury is the Chairperson of the Committee. Ms. Rucha Nanavati was appointed as the member of the Committee with effect from 28th July, 2022. The role of the Committee inter alia, includes, formulation, overseeing and implementation of risk management policy, business continuity plan, and to ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.
The shareholders at their meeting held on 27th July, 2022 approved re-appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants as Statutory Auditor of the Company for their second term of 5 years till the conclusion of 28th Annual General Meeting ("AGMâ) to be held in the calendar year 2027 at such a remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.
The Company has also received a certificate from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants confirming their eligibility to continue as statutory auditors in accordance with the provision of Sections 139 and 141 of the Companies Act, 2013 read with Rules framed thereunder.
The notes of the financial statements referred to in the Auditorsâ Report issued by M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, for the financial year ended on 31st March, 2023 are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
The Board of Directors, on recommendation of the Audit Committee, had appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai (Membership No. 15797 & Firm Registration No. 101329), as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2022-23. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141 and proviso to Section 148(3).
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, pursuant to recommendation of the Board, a resolution seeking Shareholdersâ ratification for remuneration payable to CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant is included in the notice of the ensuing Annual General Meeting.
The Company is required to maintain cost records as specified under Section 148 (1) of the Companies Act, 2013 and such accounts and records are made and maintained by the Company for the financial year 2022-23.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed M/s. Martinho Ferrao & Associates, Practising Company Secretaries, (Membership No: F.C.S. No. 6221 and C.P No. 5676) to conduct the secretarial audit of the Company.
The Secretarial Audit Report for the financial year ended 31st March, 2023, is annexed herewith and marked as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY
For the Financial year 2022-23, Mahindra World City (Jaipur) Limited, Mahindra Homes Private Limited, Mahindra Happinest Developers Limited and Mahindra Integrated Township Limited are the material unlisted subsidiaries of the Company. During the year, Mahindra Integrated Township Limited ceased to be a subsidiary of the Company consequent to amalgamation with another subsidiary, Mahindra World City Developers Limited. As per LODR Regulations, the Secretarial Audit of the material subsidiaries mentioned above, except for Mahindra Integrated Township Limited, has been conducted for the financial year 2022-23 by Practicing Company Secretaries. None of the said Audit Reports contain any qualification, reservation or adverse remark. The Secretarial Audit Reports of material subsidiaries for the financial year ended 31st March, 2023, are annexed herewith and marked as Annexure 5 to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company is engaged in business of real estate development (Infrastructural facilities) and hence the provisions of Section 186 of the Companies Act, 2013 related to any loans made or any guarantees given, or any securities
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information 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 is given in Annexure 7 to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under 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 given in Annexure 8 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available on your Companyâs website at: www.mahindralifespaces.com
ANNUAL RETURN
The Annual Return in Form MGT-7 for the financial year ended 31st March, 2023 is available on the website of the Company at www.mahindralifespaces.com
GENERAL
⢠The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
⢠No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
⢠During the year, no revision was made in the previous financial statement of the Company.
⢠During the year, the Company has not made any application under the Insolvency and Bankruptcy Code, 2016. However, two applications that were filed against the Company by the vendors under the IBC in the year 2021-22 have been dismissed on the grounds of preexisting dispute and lack of jurisdiction.
⢠During the year, the Company has not made any onetime settlement for loans taken from the Banks or
provided, or any investments made by the Company are not applicable. However, the details of the investments made, and loans given are provided in the standalone financial statement at Note nos. 7 and 15.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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 armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. However, the Company, in the year 2021-22, had sought approval of the shareholders for entering into a material related party transaction with Mahindra & Mahindra Limited (M&M), a related party for acquisition of land parcel. Subsequently, in the year 202223, the Company has paid consideration exceeding material related party threshold under LODR Regulations towards acquisition of land parcel from M&M. The details of the said transaction are provided in Form AOC-2 annexed herein as Annexure 6.
The "Policy on materiality of and on dealing with related party transactionsâ may be accessed on the Companyâs website at the link MLDL Policy on materiality of and on dealing with RPTs.
The Directors draw attention of the members to note no. 36 to the standalone financial statement which sets out related party disclosures.
DEPOSITS, LOANS, ADVANCES AND OTHER TRANSACTIONS
Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as on 31st March, 2023. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company, pursuant to Regulation 34(3) read with Schedule V of the LODR Regulations, are provided in the standalone financial statement at note no. 39.
Further, in terms of Regulation 34(3) read with Schedule V of the LODR Regulations, details of the transactions of the Company, with the promoter and holding company Mahindra & Mahindra Limited holding 51.28 percent in the paid-up equity capital of the Company as on 31st March, 2023, in the format prescribed in the relevant accounting standards for annual results, are given in Note no. 36 to the standalone financial statement.
Financial Institutions, and hence the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.
⢠For the financial year ended on 31st March, 2023, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
⢠No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operation in future.
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 employees of the Company.
For and on behalf of the Board
Ameet Hariani
Chairman DIN:00087866
Date: 25th April, 2023 Place: Mumbai
Mar 31, 2022
Your Directors present their twenty-third report together with the audited financial statement of your Company for the year ended on 31st March, 2022.
FINANCIAL HIGHLIGHTS (STANDALONE)
('' In lakh) |
||
2022 |
2021 |
|
Income from Operations |
25,281 |
8,964 |
Other Income |
5,369 |
4,675 |
Total Income |
30,650 |
13,639 |
Profit / (Loss) Before Depreciation, Finance cost and Taxation |
(7,070) |
(5,935) |
Less: Depreciation |
(618) |
(665) |
Profit / (Loss) Before Finance cost and Taxation |
(7688) |
(6,601) |
Less: Finance Cost |
(474) |
(367) |
Profit / (Loss) Before exceptional item and Taxation |
(8,162) |
(6,967) |
Less: Exceptional Item (Income)/Expense1 |
(10,412) |
- |
Profit / (Loss) after exceptional item and before Tax |
2,250 |
(6,967) |
Less: Provision for Taxation |
||
⢠Current Tax |
- |
- |
⢠Deferred Tax (including MAT Credit) |
2,039 |
1,742 |
Profit / (Loss) After Tax |
4,289 |
(5,225) |
Add: Balance of Retained earnings of earlier years |
27,139 |
32,379 |
Retained earnings available for appropriation |
31,428 |
27,154 |
Add: Other Comprehensive Income / (Loss)1 |
31 |
(15) |
Retained earnings carried forward |
31,459 |
27,139 |
Mahindra Homes Private Limited (MHPL), a Joint Venture of the Company, is executing residential projects at NCR and Bengaluru. The residential project in NCR is a Joint Development with the land owner During the year, MHPL saw significant increase in sales with improvement in selling price, volumes and collections from the projects and there was a buy back of its Class C equity shares. Pursuant to above, the Company has evaluated the carrying value of its investment and on the basis of estimated Net Present Value of forecasted cash flows expected to be generated by MHPL, reversed provision for impairment loss of'' 10,412 lakh.
For the Financial Year 2021-22, your Directors have recommended a dividend of '' 2 (20 percent) per equity share of the face value of '' 10 each of the Company on the Share Capital out of the profits of the financial year 2021-22.
The equity dividend outgo for the Financial Year 2021-22 would be '' 3,090.68 lakh. Dividend will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.
In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulationsâ), the Board of Directors of the Company has formulated and adopted a âDividend Distribution Policyâ. The Policy is attached herewith and marked as Annexure 1 and is also available on the Companyâs website at Dividend Distribution Policy
During FY 2021-22, no amount has been transferred to any reserves.
OPERATIONS / STATE OF THE COMPANYâS AFFAIRS
After the slowdown due to the Covid-19 pandemic, Indian economy registered a sharp turnaround in performance in 2021-22. GDP growth is estimated at 8.9% in 2021-22, compared to a decline of 6.6% in the previous year. All key sectors contributed to this growth, with industry and services sectors recording a strong improvement over last year. The construction sector, which is closely linked to the real estate industry, also grew at an impressive 10% in 2021-22, compared to a contraction of 7.3% in 2020-21.
During the year, your Company launched two new projects, "Mahindra Happinestâ in Mahindra World City, Chennai and "Mahindra Happinest Kalyan 2â in the Mumbai Metropolitan Region (MMR). It also launched fresh inventory in three of its existing projects, Vicino and Alcove in MMR and Happinest Avadi in Chennai.
Your Company registered sales of ''1,02,765 lakh in 2021-22, growing from '' 69,519 lakh in the previous year. Area sold also increased from 1.07 million square feet (msft) in 2020-21 to 1.28 msft in 2021-22. Collections grew to ''1,15,253 lakh in 2021-22, compared to '' 75,811 lakh in 2020-21. Equally, the concerted efforts in project execution resulted in the completion of 1.30 msft in 2021-22, which is a considerable step-up from 0.39 msft in the previous year. Your Company handed over 925 units to homeowners during the year.
Overall, in the residential business, the Company is currently developing 4.03 msft with another 6.72 msft available in the form of forthcoming projects, new phases of ongoing projects and new projects that are under planning.
The Integrated Cities and Industrial Clusters business, too, saw a sharp turnaround in performance during the year, with leasing of 111 acres of land in 2021-22, compared to 56 acres in the previous year. Total lease premium generated in 2021-22 was '' 29,750 lakh2 again a considerable increase over ''12,870 lakh generated in 2020-21.
Total income of your Company as a standalone entity increased from '' 13,639 lakh in 2020-21 to '' 30,650 lakh in 2021-22. The Company reported a loss before taxes of '' 8,162 lakh in 2021-22. But, after accounting for an exceptional gain from reversal of impairment losses in one of its projects, profit before taxes (PBT) stood at '' 2,250 lakh. Profit after taxes (PAT) in 2021-22 was '' 4,289 lakh as compared to loss of '' 5,225 lakh in 2020-21.
Total consolidated income of your Company increased from '' 18,782 lakh in 2020-21 to '' 40,824 lakh in 2021-22. PBT after incorporating share in profit of Associates stood at '' 244 lakh in 2021-22. After accounting for an exceptional gain from reversal of provision for an impairment losses in one of its projects, PBT increased further to '' 9,928 lakh in 2021-22. Consolidated PAT after deducting non-controlling interest was '' 15,449 lakh as compared to loss of '' 7,174 lakh in 2020-21.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.
Your Company and its subsidiaries received several awards and recognitions during the financial year 2021-22. Some of the prestigious awards are:
⢠The Company was awarded as one of âIndiaâs Top Builders 2021â in the National category by Construction World Architect and Builder Awards 2021.
⢠The Company ranked â1st in Asia in Public Disclosureâ (2nd year in a row) by Global Real Estate Sustainability Benchmark.
⢠The Company received âLeadershipâ status in the 2021 Global Climate Change report by Carbon Disclosure Project (CDP). The Company is the only real estate company from India to have secured âLeadershipâ ranking in CDPâs Climate Change assessment in the last five years. It is also one of only ten Indian companies in the âA-â band for Climate Change in 2021.
⢠The Company is awarded as a âSupplier Engagement Leader 2021â by CDP
⢠The Company is awarded with âPlaque Awardâ for "Special Recognitionâ in Category II - Climate Change of ICAI International Sustainability Reporting Awards 2020-21.
⢠The Company bagged 1st position in âSustainability Performance Awardâ category in 12th edition of Corporate Governance and Sustainability Vision Awards - 2022 (3rd year in a row) by Indian Chamber of Commerce.
⢠Mahindra World City, Chennai is awarded as âBest Smart city/Sub city Projectsâ by Construction Industry Development Council (CIDC) Vishwakarma Awards.
⢠Mahindra World City, Chennai, SEZ, has received âExport Excellence Awardsâ for the years 2016-17 and 2017-18 by MEPZ SEZ and HEOUs, Office of the Development Commissioner, Chennai.
⢠Mahindra World City, Chennai and Jaipur ranked as âLeadersâ in the Industrial Parks Rating for Special Economic Zones (SEZ) by Department for Promotion of Industry and Internal Trade, Government of India.
⢠Mahindra World City, Chennai and Jaipur are awarded âChairmanâs Commendation Awardâ by CIDC Vishwakarma Awards.
⢠Mahindra World City, Jaipur received âGold Awardâ in the Service Sector / 4th National Safety Practice Competition for excellence in workplace safety by CII National Safety Practice Awards.
⢠Mahindra World City, Jaipur is awarded with âGold Awardâ in Real Estate and Construction Sector for Outstanding achievement in Occupational Health and Safety by Sustainable Development Foundation.
⢠Mahindra Integrated Township Limited was awarded as âDeveloper of the year - Residential Chennaiâ at Real Estate Infrastructure Summit and Awards 2021.
Pursuant to the recommendation of the Board of Directors at its Meeting held on 28th July, 2021 and approval of the Members of the Company through a Postal Ballot, the Results of which were declared on 6th September, 2021, your Company has on 16th September, 2021 allotted 10,27,87,676 Equity Shares of '' 10 each as fully paid-up Bonus Shares in the ratio of two Bonus Share for every one existing Equity Share of the Company held by the Shareholders as on the Record Date i. e. 15th September, 2021.
(b) Shares allotted pursuant to exercise of Stock Options
During the year, the Company has issued and allotted 3,00,000 and 46,350 equity shares of '' 10 each to the eligible employees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2006 (ESOS - 2006) and Employee Stock Option Scheme -2012 (ESOS - 2012), respectively.
After FY 2021-22, till date, the Company has allotted 16,267 equity shares of '' 10 each to the eligible employees pursuant to exercise of stock options granted under ESOS - 2012.
Consequently, the issued equity share capital of the Company has increased from '' 5,143.43 lakh to '' 15,468.67 lakh and the subscribed and paid-up equity share capital of the Company has increased from '' 5,138.32 lakh to '' 15,453.35 lakh.
The allotment of 153,189 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (corresponding Section 126 of the Companies Act, 2013), till such time the title of the bona-fide owners 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.
EMPLOYEE STOCK OPTIONS SCHEME
During the year, Nomination and Remuneration Committee (NRC) approved grant of total 67,867 Stock Options under ESOS-2012 to the eligible employees, at an exercise price of '' 10 each which is equal to the face value of the equity share of the Company. No stock options were granted under ESOS-2006.
Consequent to the issue of bonus shares and approval of the shareholders, NRC and Board of Directors at their respective meetings held on 26th October 2021 approved adjustment to the outstanding stock options under the ESOS - 2006 and ESOS - 2012 in the bonus issue ratio of 2:1 (Bonus Stock Option). Accordingly, the Bonus Stock Option were allocated to the eligible grantees holding stock options as on Record Date i. e. 15th September, 2021.
The Company does not have any scheme envisaged under Section 67 of the Companies Act, 2013 ("the Actâ) in respect of shares on which voting rights are not directly exercised by the employees.
Pursuant to advent of SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021 (SBEB & SE Regulations) replacing erstwhile SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations), the NRC, had made certain administrative changes to both ESOS - 2006 and ESOS - 2012 to align with the SBEB & SE Regulations. None of the changes made under both the Schemes were material in nature. The existing schemes including changes made during the year are in compliance with SBEB & SE Regulations and other applicable regulations and circulars in force, from time to time.
A certificate from the Secretarial Auditor, will be placed before the members in the Annual General Meeting, confirming that the above-mentioned Schemes i. e. ESOS-2006 and ESOS-2012 have been implemented by the Company in accordance with SBEB & SE Regulations and SBEB Regulations and resolution passed by the Members of the Company.
The disclosure in relation to ESOS-2006 and ESOS-2012 under the SBEB & SE Regulations is uploaded on the website of the Company at Weblink for Annual Report 2021-22.
HOLDING COMPANY
As on 31st March, 2022, the Promoter and the Holding company i.e. Mahindra and Mahindra Limited (M&M) holds 7,93,19,550 equity shares representing 51.33 percent of the total paid-up equity capital of the Company. Consequent to allotment of equity shares to eligible employees under ESOS-2006 and ESOS-2012, the shareholding of M&M was reduced by 0.13% during the year.
The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013
A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Act, and their contribution to the overall performance of the Company is provided in the consolidated financial statement at note no 44. During the year, no company became or ceased to be a Subsidiary / Associate / Joint Venture company of the Company.
SUBSIDIARY AND JOINT VENTURE COMPANIES
Mahindra World City (MWC), Chennai, is being implemented by Mahindra World City Developers Limited (MWCDL),
an 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. MWC, Chennai is Indiaâs first integrated business city and corporate Indiaâs first operational SEZ spread across 1,524 acres with a leasable potential of 1,154 acres and comprising of multi sector Special Economic Zones (SEZs) and a Domestic Tariff Area (DTA) and Residential and Social Zone (R&S). It is the first township in India to receive the Green Township Certification (Stage I Gold certification) from IGBC. MWC, Chennai has leased 100% of its existing land inventory in the SEZ and DTA, but continues to offer lease options in the R&S. During the year, MWC, after Board approvals of respective companies, has filed a scheme of merger with National Company Law Tribunal, Chennai, for merger of Mahindra Integrated Township Limited and Mahindra Residential Developers Limited with MWCDL. MWCDL has received an Assessment Order and notice of demand from Income Tax Authorities for an aggregate sum of '' 10,181 lakh (including interest) against return of income filed for the assessment year 2016-17. MWCDL has received an interim stay order from Madras High Court till 10th June,
onoo
Mahindra World City (MWC), Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between the Company and Rajasthan State Industrial Development and Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. The project is spread across 2,913 acres of land and a leasable potential of 2,011 acres and offers multi product SEZ, along with DTA and Social and Residential Infrastructure. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of MWC, Jaipur. IFC has invested '' 19,480 lakh in MWCJL and is entitled to economic rights to the extent of 50% on 500 acres of gross land comprising first 250 acres of SEZ and first 250 acres of DTA. In FY 2021-22, MWCJL has clocked leasing revenue of '' 25,100 lakh which accounts for nearly 85% of the total leasing revenue of IC&IC business.
Mahindra Industrial Park Chennai Limited (MIPCL),
is a 60:40 joint venture between MWCDL and Sumitomo Corporation, Japan, respectively. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 289 acres with a leasable potential 209 acres under the brand âOrigins by Mahindra World Cityâ. Till date, MIPCL has leased 53 acres of industrial land.
Mahindra Industrial Park Private Limited (MIPPL), a wholly owned subsidiary of the Company has acquired around 340 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster having leasable potential 255 acres. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of upcoming project at Jansali. IFC, till date, has invested '' 7,565 lakh in MIPPL and is entitled to economic rights to the extent of 50% in MIPPL. The Company has obtained all major approvals for the project and the onsite development of the core infrastructure is in progress.
Mahindra Homes Private Limited (MHPL), is a 72.51: 27.49 joint venture between the Company and Actis Mahi Holding (Singapore) Private Limited (âActisâ), respectively and is developing in collaboration with a developer and landowning companies, a group housing project "Luminareâ at NCR on approximately 6.80 acres. It has also completed a residential project "Windchimesâ at Bengaluru on approximately 5.90 acres. In the year 2021-22, MHPL completed buyback of 18,900 equity shares each of Series B and Series C held by Actis and the Company at an aggregate consideration of '' 5,505 lakh each. MHPL has launched third phase of its existing residential project, âLuminare - Phase 3â with development potential of 0.43 msft.
Mahindra Integrated Township Limited (MITL) is a codeveloper in developing the residential township area at
Mahindra World City, Chennai (MWC Chennai). Its project developments include âIris Courtâ, âNovaâ, âLakewoodsâ and âMahindra Happinestâ with current approved development potential of upto 2.71 msft. MITL has handed over projects - âIris Courtâ and âNovaâ to customers. During the year, MITL had launched its fourth project âMahindra Happinestâ at MWC Chennai. The launch received an overwhelming response with 302 units out of total 348 units launched being booked within two months. Construction of projects - âLakewoodsâ and âMahindra Happinestâ is currently under progress. MITL also transferred land admeasuring 15.64 acres for development of a senior living project. The Company, directly and indirectly, owns 97.14% of MITL.
Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and a co-developer is developing a gated residential community in approximately 54 acres within Mahindra World City, Chennai, under the name âAqualilyâ. The project offers villas and apartments with an estimated saleable area of 1.58 msft of which 1.35 msft has been launched and completed.
Mahindra Bloomdale Developers Limited (MBDL) is
a wholly owned subsidiary of the Company. MBDL is developing a gated residential community âBloomdaleâ across approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). In the year 2021-22, MBDL has acquired 3.2 acres of land parcel in Pimpri, Pune, from Mahindra & Mahindra Ltd offering development potential of approx. 0.52 msft.
Mahindra Happinest Developers Limited (MHDL) is a
51:49 joint venture between the Company and HDFC Capital Affordable Real Estate Fund - I (HDFC), respectively. Its project include âHappinest Palghar 1 and 2â, âMahindra Happinest Kalyan -1â having development potential of upto 1.63 msft.
Mahindra Infrastructure Developers Limited (MIDL),
a wholly owned subsidiary of the 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.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance services for water and sewerage facilities at Tirupur, India and is a 98.99% subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.
Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra under the brand âOrigins by Mahindra World Cityâ for which the company is in the process of
procuring the required land area. KTL is focusing on completing necessary compliances and obtaining requisite approvals for acquisition of land parcels to achieve contiguity.
Deep Mangal Developers Private Limited (DMDPL) is a
subsidiary of Mahindra World City (Maharashtra) Limited and consequently a subsidiary of the Company. DMDPL intends to develop approx. 1,300 acres land at Murud on southern coast of Maharashtra as a one-of-itskind tourist destination catering to globally growing need of holistic healthcare and wellness tourism, besides promoting adventure and heritage tourism.
Mahindra World City (Maharashtra) Limited, Industrial Township (Maharashtra) Limited, Moonshine Construction Private Limited, Mahindra Knowledge Park (Mohali) Limited and Anthurium Developers Limited, subsidiaries of the Company are evaluating viable business opportunities.
As of 31st March, 2022, no company is an associate of the Company.
CONSOLIDATED FINANCIAL STATEMENT
The audited consolidated financial statement of the Company prepared in accordance with the applicable Accounting Standards along with all relevant documents and the Auditorsâ Report forms part of this Annual Report.
The audited financial statement of each of the subsidiaries is placed on the website of the Company at Weblink for Annual Report 2021-22.
The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries 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 operations of the Company and its subsidiaries forms part of this Annual Report.
A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under the LODR Regulations forms part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The Company regularly carries out several initiatives that contribute to the sustainability and well-being of the environment and the communities in which it operates. The Company is committed to demonstrate integration of green and climate responsive design in our products and it aims to be seen as a leader in net zero and climate responsive developments in the years to come. Sustainability is thus a core agenda for the Company. The Company has provided Business Responsibility and Sustainability Report (BRSR), in lieu of the Business Responsibility Report. The BRSR forms part of this report providing insights on the initiatives taken by the Company from an environmental, social and governance perspective.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility (CSR) Committee comprising Mr. Arun Nanda, Non-Executive Non-Independent Director, Ms. Amrita Chowdhury, Independent Director and Mr. Arvind Subramanian, Managing Director & CEO. Mr. Arun Nanda is the Chairman of the Committee. The role of the Committee, inter alia, is to formulate and recommend to the Board, a Corporate Social Responsibility Policy, expenditure to be incurred on the CSR activities, an annual action plan in pursuance of its CSR policy etc.
The Companyâs CSR Policy lays out the vision, objectives and implementation mechanism. During the year, the CSR Policy of the Company was amended in line with the amendments made by the Companies (Amendment) Act, 2019, the Companies (Amendment) Act, 2020 and the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 by amending definitions viz. meaning of CSR, ongoing project, guiding principles for selection, implementation, monitoring of activities and formulation of the Annual Action Plan, etc. The Companyâs CSR policy is available on the Companyâs website at MLDL CSR Policy.
The objective of the CSR policy is to:
⢠Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Companyâs 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 Companyâs CSR and give back to the society in an organised manner through the employee volunteering programme called Employee Social Options.
The Company registered an average loss during immediately preceding three financial years and therefore, the provision with respect to CSR spending was not applicable for the financial year ended on 31st March, 2022.
The annual report on the CSR activities is attached herewith and marked as Annexure 2 to this Report.
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Dr. Anish Shah (DIN: 02719429), Non-Executive NonIndependent Director retires by rotation at the ensuing 23rd Annual General Meeting of the Company and being eligible has offered himself for re-appointment. The Board, basis recommendation of the Nomination and Remuneration Committee (NRC), has recommended his reappointment at the forthcoming Annual General Meeting as a Non-Executive Non-Independent Director of the Company, liable to retire by rotation.
The shareholders, at the Annual General Meeting of the Company held on 30th July, 2018, had appointed Mr. Ameet Hariani (DIN: 00087866) as an Independent Director for the first term of five years to hold the office from 4th September, 2017 upto 3rd September, 2022. On the basis of performance evaluation of Independent Directors, the Nomination and Remuneration Committee and the Board at their respective meetings held on 13th May, 2022, have recommended to the shareholders for the continued association of Mr. Ameet Hariani as an Independent Director of the Company, not liable to retire by rotation, to hold office for a second term of five years from 4th September, 2022 upto 3rd September, 2027. The recommendation was based on the business knowledge, integrity, expertise, experience and the contribution made by Mr. Ameet Hariani during his tenure. With regard to experience which includes proficiency test, Mr. Ameet Hariani is exempted from undertaking the proficiency test in accordance with the Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
The Board, pursuant to recommendation of Nomination and Remuneration Committee, at its meeting held on 13th May, 2022 appointed Ms. Asha Kharga (DIN: 08473580) as an Additional Director of the Company in the category of NonExecutive Non-Independent Director. Pursuant to Section 161 of the Act and Article 128 of the Articles of Association of the Company, Ms. Asha Kharga will hold office of the Additional
Director upto the date of forthcoming Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013 from a member in writing proposing her candidature for the office of Director. The Board has recommended to the shareholders her appointment at the forthcoming Annual General Meeting as a Non-Executive Non-Independent Director of the Company, liable to retire by rotation.
Brief resume and other details of Dr. Anish Shah, Mr. Ameet Hariani and Ms. Asha Kharga, in terms of Companies Act, 2013, LODR Regulations and Secretarial Standards on General Meeting, are provided in the Notice and/or Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. The abovementioned Directors are not disqualified from being re-appointed / appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.
The shareholders at its meeting held on 25th July, 2017 had approved appointment of Mr. Bharat Shah (DIN: 00136969) as an Independent Director to hold office upto 31st July, 2021. Mr. Bharat Shah ceased to be a Director consequent to expiry of his first term of office as an Independent Director effective 31st July, 2021. The Board places on record its sincere appreciation for the valuable contributions made by Mr. Shah during his tenure as an Independent Director.
Mr. S. Durgashankar, consequent to his retirement from the services of Mahindra and Mahindra Limited, resigned as a Non-Executive Non-Independent Director of the Company effective from the conclusion of the Board Meeting held on 13th May, 2022. He has confirmed in the resignation letter that there is no other material reason other than what is stated in his resignation. The Board places on record its deep appreciation for the valuable services rendered by Mr. S. Durgashankar during his tenure as a Director of the Company.
The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by Independent Directors. Pursuant to the provisions of the Act, the Nomination and Remuneration Committee (NRC) specified the manner of effective evaluation of the performance of the Board, its Committees and Individual Directors. In terms of manner of performance evaluation specified by the NRC, the performance evaluation of the Board, its committees and individual Directors was carried out by NRC and the Board of Directors. Further, pursuant to Schedule IV of the Act and Regulation 17(10) of the LODR Regulations, the evaluation of independent directors was done by the Board of Directors. For
performance evaluation, structured questionnaires, 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. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflected high level of engagement of the Board of Directors and its committees amongst its members with the Company and its management and that they are fully satisfied with the same.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in the Companies Act, 2013 and LODR Regulations. The declarations also confirm compliance with sub rule 3 of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014. Further, the Board after taking these declaration/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company at Weblink for Annual Report 2021-22.
The salient features of the following policies of the Company are attached herewith and marked as Annexure 3:
1. Policy on appointment of Directors and Senior Management
2. Policy on Remuneration of Directors and
3. Policy on Remuneration of Key Managerial Personnel and Employees
The aforesaid policies are also available at the link MLDL Policies.
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 (KMP)
As on 31st March, 2022, details of Key Managerial Personnel under the Companies Act, 2013 are given below:
Sr. No. |
Name of the Person |
Designation |
1 |
Mr. Arvind Subramanian |
Managing Director & CEO |
2 |
Mr. Vimal Agarwal |
Chief Financial Officer |
3 |
Mr. Ankit Shah |
Assistant Company |
Secretary & Compliance |
||
Officer |
During the financial year 2021-22, the Board met seven times. Detailed information regarding the meetings of the Board is included in the report on Corporate Governance, which forms part of the annual report. The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards on Board Meetings and LODR Regulations as amended from time to time.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) 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;
(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 31st March, 2022 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 are 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.
The Companyâs Financial Statements are prepared on the basis of the Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time. The Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures its implementation. The Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. The Companyâs Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in the Companyâs operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.
As on 31st March, 2022, the Audit Committee comprised of two Independent Directors, namely Mr. Ameet Hariani and Ms. Amrita Chowdhury, and one, Non-Executive NonIndependent Director, Mr. Arun Nanda. Mr. Ameet Hariani is the Chairman of the Committee. During the year, Mr. Bharat Shah, Independent Director, ceased to be a member of the Audit Committee upon expiry of his first term of office of Independent Director effective 31st July, 2021.
All members of the Audit Committee possess strong knowledge of accounting and financial management. The Managing Director and 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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.
as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.
The Company has also received a written consent and a certificate from Messrs Deloitte Haskins & Sells LLP, Chartered Accountants, to the effect that their appointment if made, would be in accordance with the provision of Section 139 and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013 read with Rules framed thereunder.
The Board is of the opinion that continuation of Messrs Deloitte Haskins & Sells LLP, Chartered Accountants will be in the best interest of the Company and therefore, the members are requested to consider their re-appointment as Statutory Auditors of the Company for a term of five years from the conclusion of the ensuing Annual General Meeting till the conclusion of Annual General Meeting to be held in the calendar year 2027.
The notes of the financial statements referred to in the Auditorsâ Report issued by Messrs Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai for the financial year ended on 31st March, 2022 are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
COST AUDIT
The Board of Directors, on recommendation of the Audit Committee, has appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai (Membership No. 15797 and Firm Registration No. 101329), as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2021-22. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141 and proviso to Section 148(3).
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, pursuant to recommendation of the Board, a resolution seeking Shareholdersâ ratification for remuneration payable to CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant is included in the notice of the ensuing Annual General Meeting.
The Company is required to maintain cost records as specified under Section 148 (1) of the Companies Act, 2013 and such accounts and records are made and maintained by the Company for the financial year 2021-22.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to report genuine concerns in the prescribed manner to freely communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Companyâs Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimisation of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or the Business Ethics and Governance Committee (BEGC) consisting of functional heads. No person was denied access to the Chairman of the Audit Committee or BEGC. During the year, the Company modified its Whistle Blower Policy to strengthen the vigil mechanism. The modified Whistle Blower Policy of the Company is in accordance with the Act and LODR Regulations and the same is available at website of the Company at Whistle Blower Policy.
The Risk Management Committee comprised of Ms. Amrita Chowdhury, Independent Director, Mr Arvind Subramanian, Managing Director & CEO and Mr Vimal Agarwal, Chief Financial Officer. Mr. S. Durgashankar, who was also a member of the Risk Management Committee, ceased to be a member effective 13th May, 2022. The role of the committee inter alia, includes, formulation, overseeing and implementation of risk management policy, business continuity plan, and to ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.
The shareholders at their meeting held on 25th July, 2017 approved appointment of Messrs Deloitte Haskins & Sells LLP, Chartered Accountants as Statutory Auditor of the Company for their first term of 5 years till the conclusion of 23rd Annual General Meeting ("AGMâ) to be held in the calendar year 2022.
The Audit Committee and the Board of Directors at their respective meeting held on 27th April, 2022, subject to approval of the Shareholders, have approved re-appointment of Messrs Deloitte Haskins & Sells LLP as Statutory Auditors of the Company for a period of five years commencing from the conclusion of 23rd AGM to be held in the calendar year 2022 until the conclusion of the 28th Annual General Meeting to be held in the calendar year 2027 at such a remuneration
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed Messrs Martinho Ferrao & Associates, Practising Company Secretaries, (Membership No: F.C.S. No. 6221 and C.P No. 5676) to conduct the secretarial audit of the Company.
The Secretarial Audit Report for the financial year ended 31st March, 2022, is annexed herewith and marked as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY
For the Financial year 2021-22, Mahindra World City (Jaipur) Limited, Mahindra Homes Private Limited, Mahindra World City Developers Limited, Mahindra Industrial Park (Chennai) Limited, Mahindra Residential Developers Limited, Mahindra Bloomdale Developers Limited, Mahindra Water Utilities Limited and Mahindra Happinest Developers Limited are the material unlisted subsidiaries of the Company. As per LODR Regulations, the Secretarial Audit of the material subsidiaries mentioned above has been conducted for the financial year 2021-22 by Practicing Company Secretaries. None of the said Audit Reports contain any qualification, reservation or adverse remark. The Secretarial Audit Reports of material subsidiaries for the financial year ended 31st March, 2022, are annexed herewith and marked as Annexure 5 to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company is engaged in the business of real estate development (Infrastructural facilities) and hence, the provisions of Section 186 of the Companies Act, 2013 related to any loans made or any guarantees given, or any securities provided, or any investments made by the Company are not applicable. However, the details of the investments made, and loans given are provided in the standalone financial statement at note nos. 7 and 15.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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 armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material except approval obtained from shareholders through postal ballot for acquisition of land parcel from Mahindra and Mahindra Limited, a related party.
In view of the above, the requirement of giving particulars of contracts / arrangements / transactions made with related parties, in Form AOC-2, is annexed as Annexure 6.
Pursuant to amendment to provisions of related party under LODR Regulations, the Company has amended its âPolicy on materiality of and on dealing with related party transactionsâ to align and comply with the said provisions. The Policy may be accessed on the Companyâs website at https://mldlprodstorage.blob.core.windows.net/live/2021/10/ RPT-Policy.pdf.
The Directors draw attention of the members to note no. 36 to the standalone financial statement which sets out related party disclosures.
DEPOSITS, LOANS, ADVANCES AND OTHER TRANSACTIONS
Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as on 31st March, 2022. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Regulation 34(3) read with Schedule V of the LODR Regulations are provided in the standalone financial statement at note no. 40.
Further, in terms of Regulation 34(3) read with Schedule V of the LODR Regulations, details of the transactions of the Company, with the promoter and holding company Mahindra and Mahindra Limited holding 51.33 percent in the paid up equity capital of the Company as on 31st March, 2022, in the format prescribed in the relevant accounting standards for annual results, are given in Note no. 36 to the standalone financial statement.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information 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 is given in Annexure 7 to this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under 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 given in Annexure 8 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available on your Companyâs website at: Weblink for Annual Report 2021-22.
The Annual Return in Form MGT-7 for the financial year ended 31st March, 2022 is available on the website of the Company at Weblink for Annual Report 2021-22.
⢠The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
⢠No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
⢠During the year, no revision was made in the previous financial statement of the Company.
⢠During the year, the Company has not made any application under Insolvency and Bankruptcy Code, 2016 (IBC). However, two applications have been filed against the Company by vendors under the IBC. The Company has filed its response with respect to both the matters for dismissal on the grounds of pre-existing dispute and lack of jurisdiction. The matters as on date have not been admitted and are pending for hearing.
⢠During the year, the Company has not made any onetime settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.
⢠For the financial year ended on 31st March, 2022, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
⢠No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operation in future.
CAUTIONARY STATEMENT
Certain statements in the Directorsâ Report describing the Companyâs 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 Companyâs operations include labour and material availability, and prices, cyclical demand and pricing in the Companyâs principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.
Disclaimer
The Company shall be registering its forthcoming projects at an appropriate time in the applicable jurisdictions / States under the Real Estate (Regulation and Development) Act, 2016 (RERA) and Rules thereunder. Till such time, the forthcoming projects are registered under RERA, none of the images, material, projections, details, descriptions and other information that are mentioned in the Annual Report for the year 2021-22, should be deemed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer, or invitation to acquire within the purview of the RERA. The Company uses carpet areas as per RERA in its customer communication. However, the data in saleable area terms, if any, has been presented in the Annual Report for the year 2021-22 to enable continuity of information to investors and shall not be construed to be of any relevance to home buyers / customers.
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 employees of the Company.
For and on behalf of the Board
Arun Nanda
Chairman DIN:00010029
Date: 13th May, 2022 Place: Mumbai
Re-measurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.
Total lease premium Includes Rs. 4,692 lakh for 15.64 acres of land leased by Mahindra Integrated Township Limited (MITL), a subsidiary of Mahindra World City Developers Limited (MWCDL) for development of a senior living housing project.
Mar 31, 2019
Boardâs Report to the Members
The Directors present their twentieth report together with the audited financial statement of your Company for the year ended on 31st March, 2019.
FINANCIAL HIGHLIGHTS (STANDALONE)
(Rs. in lakh)
2019 |
2018 |
|
Income from Operations |
48,603 |
47500 |
Other Income |
6,881 |
8,222 |
Total Income |
55,484 |
55,722 |
Profit Before Depreciation, Finance cost and Taxation |
9,312 |
11,830 |
Less : Depreciation |
(306) |
(396) |
Profit Before Finance cost and Taxation |
9,006 |
11,434 |
Less : Finance Cost |
(548) |
(3,541) |
Profit Before Taxation |
8,458 |
7,893 |
Less : Provision for Taxation |
||
- Current Tax |
NIL |
(2,566) |
- Deferred Tax (including MAT Credit) |
(2,599) |
(15) |
Profit After Tax |
5,859 |
5,312 |
Add: Balance of Retained earnings of earlier years |
55,018 |
53,216 |
Add: Transfers from Debenture Redemption Reserve |
8,375 |
- |
Less: Adjustment relating to cumulative effect of applying Ind-AS 1151 |
(7,958) |
- |
Retained earnings available for appropriation |
61,294 |
58,528 |
Add: Other Comprehensive Income / (Loss) |
(77) |
(15) |
Less: Dividend paid on Equity Shares |
(3,080) |
(3,079) |
Less: Income-tax on Dividend paid*** |
(163) |
(416) |
Retained earnings carried forward. |
57,974 |
55,018 |
* The Ministry of Corporate Affairs vide notification dated 28th March 2018 has mandated Ind AS 115 âRevenue from Contracts with Customersâ (Ind AS 115) from 1st April, 2018. The Company has applied the modified retrospective approach as per para C3(b) of Ind AS 115 to contracts that were not completed as on 1st April 2018 and the cumulative effect of applying this standard is recognised at the date of initial application i.e.1st April, 2018 in accordance with para C7 of Ind AS 115 as an adjustment to the opening balance of Retained Earnings, only to contracts that were not completed as at 1st April, 2018. The transitional adjustment of Rs. 7,958.14 lakhs (net of deferred tax) has been adjusted against opening Retained Earnings based on the requirements of the Ind AS 115 pertaining to recognition of revenue based on satisfaction of performance obligation (at a point in time). For further details, please refer Note no. 30 to the standalone financial statement.
** Re-measurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.
*** Pursuant to applicable provisions of Indian Accounting Standards, the amount of dividend paid and income tax thereon mentioned in the columns for 2019 and 2018 represents the dividend amount paid and tax paid thereon for the financial years 2018 and 2017, respectively.
DIVIDEND
For the Financial Year 2018-19, your Directors have recommended a dividend of Rs. 6 per equity share of the face value of Rs. 10 each of the Company, i.e. 60 (sixty) percent, payable to those shareholders whose names appear in the Register of Members as on the Book Closure Date.
The equity dividend outgo for the proposed dividend on equity shares for the financial year 2018-19, inclusive of tax on distributed profits and net of tax on distributed profits on dividend proposed by the subsidiaries during the current financial year, amounts to Rs. 3,335.75 lakh. The dividend shall be paid out of the profits for the financial year 2018-19.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODRâ), the Board of Directors of the Company at its meeting held on 27th October, 2016 has formulated and adopted a âDividend Distribution Policyâ. The Policy is attached herewith and marked as Annexure 1 and is also available on the Companyâs website athttps://www.mahindralifespaces.com/media/investor/codes-and-policies/Dividend%20Distribution%20Policy.pdf
RESERVES
Out of the profits available for appropriation, no amount has been transferred to any reserves for the year under review.
OPERATIONS / STATE OF THE COMPANYâS AFFAIRS
India experienced an economic slowdown during FYâ19, which saw the Gross Domestic Product (GDP) grow at 7.0 per cent, compared to 7.2 per cent in the previous year. This downturn was primarily driven by degrowth in the agriculture and services sectors, even as growth rate of the manufacturing sector accelerated from 5.9 per cent in FY 2017-18 to 7.7 per cent in FY 2018-19.
The real estate industry saw signs of revival during the year, where the construction sector grew at 8.9 per cent in FY 2018-19 after an average growth of 4.4% in the previous five years. The uptick in the sectoral growth was evident in the Companyâs performance during the year, which saw higher completion of construction works, sales, collections, new launches and land acquisition. The Company sold 1,678 residential units aggregating to 1.69 million square feet of saleable area in FY 2018-19 compared to 1,357 units aggregating 1.16 million square feet in the previous year. In value terms, this represents a growth of 67% in sales from Rs. 61,100 lakh in FY 2017-18 to Rs. 102,300 lakh in FY 2018-19. The Companyâs collections saw a significant growth from Rs. 60,308 lakh in FY 2017-18 to Rs. 96,321 lakh in FY 2018-19. The Companyâs focus on execution was strongly reflected in the completion of 1.84 million square feet in FY 2018-19 compared to 0.68 million square feet in FY 2017-18. The Company handed over 1,225 units to its customer in FY 2018-19.
The consolidated total income of your Company stood at Rs. 65,387 lakh in FY 2018-19 as compared to Rs. 64,413 lakh in FY 2017-18. The consolidated Profit before tax (PBT) stood at Rs. 14,326 lakh in FY 2018-19 as compared to Rs. 13,454 lakh in FY 2017-18, whereas the consolidated profit after tax (PAT) and minority interest was Rs. 11,971 lakh in FY 2018-19 as compared to Rs. 10,100 lakh in FY 2017-18.
The total income of your Company as a standalone entity in FY 2018-19 was Rs. 55,484 lakh as compared to Rs. 55,722 lakh in FY 2017-18. PBT in FY 2018-19 was Rs. 8,458 lakh as compared to Rs. 7,893 lakh in FY 2017-18, whereas PAT was Rs. 5,859 lakh as compared to Rs. 5,312 lakh in FY 2017-18. Total income in FY 2018-19 includes dividend income of Rs. 1,665 lakh from Mahindra World City (Jaipur) Limited and Rs. 425 lakh from Mahindra Integrated Township Limited, subsidiaries of the Company. In FY 2017-18, the Company had received dividend income of Rs. 666 lakh from Mahindra World City (Jaipur) Limited, and Rs. 370 lakhs from Mahindra Integrated Township Limited subsidiaries of the Company.
During FY 2018-19, the Company launched three new projects â âRootsâ in Kandivali, Mumbai Metropolitan Region (MMR), âLakewoodsâ in Mahindra World City (MWC), Chennai, and âCentralisâ in Pimpri, Pune. Additionally, it launched fresh inventory in two of its existing projects âAntheiaâ (Pune), âBloomdaleâ (Nagpur).
In the affordable housing segment, the Company launched fresh inventory in two of its existing projects - âHappinest Avadiâ (Chennai) and âHappinest Palgharâ (MMR).
The Company is currently developing 3.68 million square feet with another 5.16 million square feet available in the form of forthcoming projects, which includes new phases of ongoing projects and new projects that are to be launched.
In the Integrated Cities and Industrial Clusters (IC & IC) business, the company continued to focus on deals through new clients & existing customer base. It executed land leases of around 93 acres in FY 2018-19 at MWCs Chennai, Jaipur & Origins, Chennai, compared to 62 acres in the previous year. The IC & IC business has leased entire industrial land inventory at Mahindra World City, Chennai. âOrigins, Chennaiâ, the first industrial cluster project launched in FY 2018-19 in partnership with Sumitomo Corporation, signed its anchor customer. âOrigins, Ahmedabadâ, the second industrial cluster project has obtained all key approvals for the first phase of the project and the initial development work has already started. It is being developed by the Companyâs subsidiary, Mahindra Industrial Park Private Limited (MIPPL), in a strategic partnership with International Finance Corporation.
The IC & IC business will continue to offer a wide choice of industrial land leasing to its clients through the national footprint across Northern, Western & Southern India. The multi-product SEZ notification in FY 2018-19 at MWC Jaipur has enabled the business to engage in new industrial segments.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.
AWARDS AND RECOGNITION
Your Company and its subsidiaries received several awards and recognitions during the financial year 2018-19. Some of the prestigious awards are:
- The Company was recognized as one of Indiaâs Top Builders 2018 at the Construction World Architect and Builder Awards.
- The Company was ranked 22nd in the list of Great Places to Work in India, in the âMid-size Companiesâ Category.
- The Company was ranked among the âTop 100 Best Companies for Women in Indiaâ by Working Mother and AVTAR.
- The Company received Digital Marketing Effectiveness (Gold) at Asian Customer Engagement Forum for Social media campaign #18Daychallenge.
- The Company received Best use of medium length video (Silver) at Lighthouse Insights Digital Marketing Awards 2018 for Social media campaign #Building Together.
- The Company received Best Twitter Case Study at Lighthouse Insights Digital Marketing Awards 2018 for Social media campaign #18Daychallenge.
SHARE CAPITAL
During the year, the Company has allotted 20,950 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible employees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2012 (ESOS - 2012). No Stock Options were exercised under Employee Stock Option Scheme - 2006 (ESOS - 2006).
Consequently, during the year, the issued equity share capital has increased from Rs. 5,137.92 lakh to Rs. 5,140.02 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 5,132.81 lakh to Rs. 5,134.91 lakh.
Post closure of Financial Year 2018-19, the Company has allotted 3,300 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible employees pursuant to exercise of stock options granted under ESOS - 2012. Consequently, the issued equity share capital has increased from Rs. 5,140.02 lakh to Rs. 5,140.35 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 5,134.91 lakh to Rs. 5,135.24 lakh.
The allotment of 51,063 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (now corresponding to Section 126 of the Companies Act, 2013), till such time the title of the bona-fide owners of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of offences relating to transactions in Securities).
During the year, Company has not issued any equity shares with differential rights or any sweat equity shares.
EMPLOYEE STOCK OPTIONS SCHEME
During the year, in accordance with ES0S-2012, the Nomination and Remuneration Committee had on 30th July, 2018 and 14th February, 2019, approved grant of total 25,500 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.
During the year, no Stock Options have been granted under ESOS - 2006. Except 5,000 Stock Options granted on 4th August, 2012, all options granted under ES0S-2006 and not exercised have lapsed.
There is no scheme as envisaged under Section 67 of the Companies Act, 2013 (âthe Actâ) in respect of shares on which voting rights are not directly exercised by the employees.
During the year, no change was made to the existing schemes i.e. ESOS - 2006 and ESOS - 2012. The existing schemes are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and other applicable Regulations and Circulars in force, from time to time.
The disclosure in relation to ESOS-2006 and ESOS-2012 under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is uploaded on the website of the Company at https://www. mahindralifespaces.com/media/investor/stock-exchange-filings/ other-filings-information/2018/2%20Disclosure%20under%20 SEBI%20Share%20Based%20Employee%20Benefits%20 Regulations%202014%202017-18.pdf
HOLDING COMPANY
As on 31st March, 2019, the Promoter and Holding company i.e. Mahindra and Mahindra Limited (M&M) holds 2,64,39,850 equity shares representing 51.49 percent of the total paid-up equity capital of the Company. There was no change in the shareholding of M&M during the year.
The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013
A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Act, and their contribution to the overall performance of the Company is provided in the consolidated financial statement at note no 44.
SUBSIDIARY AND JOINT VENTURE COMPANIES
Mahindra World City (MWC), Chennai, is being implemented by Mahindra World City Developers Limited (MWCDL), a 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. 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) â 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 zone. At the end of FY 2018-19, the project had a total area of 1,524 acres. The company is focusing on clients for social infrastructure, having leased entire industrial land inventory.
Mahindra World City (MWC), Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. The project is spread across 2,913 acres of land and offers multi product SEZ, along with Domestic Tariff Area (DTA) and Social & Residential Infrastructure. The erstwhile four sector specific zones (IT/ITeS, Engineering and Related Industries, Handicrafts and Gems & Jewellery), have now been merged into a multi-product SEZ vide notification dated 17th April, 2018 issued by the Ministry of Commerce and Industries (Department of Commerce) Government of India.
During the year, the Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of MWC, Jaipur. IFC has invested Rs. 194 Crore in MWCJL and is entitled to economic rights to the extent of 50% on 500 acres of gross land comprising first 250 acres of SEZ and first 250 acres of DTA.
Mahindra Integrated Township Limited (MITL) is a codeveloper in developing the residential township area at Mahindra World City, Chennai. Its current developments include âIris Courtâ, âNovaâ and âLakewoodsâ. Project âLakewoodsâ was launched during the year with a total saleable area of 0.90 million square feet. Additionally, MITL is in the process of obtaining approvals for its next project at MWC, Chennai. After excluding the area under the above projects, MITL still has approximately 135 acres to be developed in phases for offering products in different formats and segments. The Company owns 96.40 percent of MITL.
Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and a co-developer is developing a gated residential community in approximately 54 acres within Mahindra World City, Chennai, under the name âAqualilyâ.
Mahindra Bloomdale Developers Limited (MBDL) [formerly known as Mahindra Bebanco Developers Limited] is wholly owned subsidiary of the Company. MBDL was a 70:30 joint venture company between the Company and B. E. Billimoria & Co Limited (BEBL) respectively. The Company, BEBL and MBDL had entered into a Shareholders Agreement governing the terms of the joint venture. MLDL and BEBL agreed on the transfer of BEBLâs shareholding in MBDL to MLDL. Accordingly, MLDL acquired 15,000 equity shares held by BEBL, and MBDL ceased to be a joint venture cum partially owned subsidiary and became a wholly owned subsidiary of the Company effective 28th May, 2018. MBDL is developing a gated residential community âBloomdaleâ across approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur (MIHAN).
Mahindra Homes Private Limited (MHPL), is a 74.98 : 25.02 joint venture between the Company and Actis Mahi Holding (Singapore) Private Limited (âActisâ), [Actis acquired the stake held by SCM Real Estate (Singapore) Private Limited (SCM) held in MHPL], respectively and is developing in collaboration with a developer and land owning companies, a group housing project âLuminareâ at NCR on approximately 6.80 acres and a residential project âWindchimesâ at Bengaluru on approximately 5.90 acres.
Mahindra Happinest Developers Limited (MHDL) is a 51:49 joint venture between the Company and HDFC Capital Affordable Real Estate Fund - I, respectively. MHDL launched first phase of its first affordable housing project in Palghar, Maharashtra, on approximately 8.35 acres, under the brand âHappinestâ.
Mahindra Industrial Park Chennai Limited (MIPCL), is a 60:40 joint venture between MWCDL and Sumitomo Corporation, Japan, respectively. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 264 acres under the brand âOrigins by Mahindra World Cityâ.
Mahindra Industrial Park Private Limited (MIPPL) [formerly known as Industrial Cluster Private Limited (ICPL)] a wholly owned subsidiary of the Company has acquired 339.92 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of upcoming project at Jansali. The project will be marketed under the brand âOrigins by Mahindra World Cityâ.
Mahindra Infrastructure Developers Limited (MIDL), a wholly owned subsidiary of the 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.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance services for water and sewerage facilities at Tirupur, India and is a 98.99 percent subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.
Mahindra World City (Maharashtra) Limited (MWCML), is a wholly owned subsidiary of the Company, which was set up to undertake large format development. MWCML is looking for an appropriate business opportunity to take up projects in large format development.
Deep Mangal Developers Private Limited (DMDPL) is a subsidiary of MWCML and consequently a subsidiary of the Company. DMDPL intends to develop its land at Murud on southern coast of Maharashtra as a one-of-its-kind tourist destination catering to globally growing need of holistic healthcare and wellness tourism, besides promoting adventure and heritage tourism. The State Government will support the project by facilitating necessary infrastructure in the region.
Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra under the brand âOrigins by Mahindra World Cityâ for which the company is in the process of procuring the required land area.
Industrial Township (Maharashtra) Limited (ITML) and Anthurium Developers Limited (ADL), wholly owned subsidiaries of the Company are exploring the possibility of taking up real estate development projects.
During the year, consequent to coming in to force of the Companies Amendment Act, 2017, effective 7th May, 2018, Mahindra Knowledge Park (Mohali) Limited which was an associate company of the Company became a subsidiary of MWCML and consequently, the subsidiary of the Company. Similarly, Mahindra Construction Company Limited, which was an indirect subsidiary of the Company ceased to be a subsidiary of the Company.
ASSOCIATE COMPANIES
As of 31st March, 2019, no company is an associate of the Company.
Except as aforesaid, during the year, no other company became or 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 the applicable Accounting Standards along with all relevant documents and the Auditorsâ Report forms part of this Annual Report.
The financial statements of Subsidiary companies as per the Companies Act, 2013 are not attached along with the financial statements of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the Company at web link:https://www.mahindralifespaces.com/ investors/annual-reports/fy-18-19
The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries 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 operations of the Company and its subsidiaries forms 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 with the conditions of Corporate Governance as stipulated under Para E of Schedule V of the SEBI LODR forms part of this Annual Report.
SUSTAINABLE DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT
Your Company has been at the forefront of the real estate industry in India to achieve mission of âTransforming urban landscapes by creating sustainable communitiesâ. Sustainability is thus a core agenda for the Company. The details of the Companyâs approach to sustainability are covered in the Business Responsibility Report.
Presently, the requirement of publishing Business Responsibility Report (BRR) under Regulation 34(2)(f) of SEBI LODR is not applicable to the Company. However, the Company has voluntarily provided the BRR for the financial year 2018-19 which forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Companyâs 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. The Company, in every financial year, in line with the Companies Act, 2013, pledges to spend two percent of the average net profits made during the three immediately preceding financial years towards CSR initiatives.
The Company has constituted a Corporate Social Responsibility (CSR) Committee comprising Non-Executive Non-Independent Director - Mr. Arun Nanda, Independent Director - Mr. Shailesh Haribhakti and the Managing Director & CEO, Ms. Sangeeta Prasad. Mr. Arun Nanda is the Chairman of the Committee. During the year, Ms. Anita Arjundas ceased to be a member of the Committee consequent to her resignation as Managing Director and as a Director of the Company effective 30th September, 2018. The Board at its meeting held on 28th September, 2018 has appointed Ms. Sangeeta Prasad, the Managing Director & CEO as a member of the Committee effective 1st October, 2018. The role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend 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 the CSR projects or programs or activities undertaken by the Company.
The Companyâs CSR Policy lays out the vision, objectives and implementation mechanism. The Companyâs CSR policy is available on the Companyâs web link athttps:// www.mahindralifespaces.com/wp-content/uploads/2019/04/ corporate social responsibility csr policy.pdf
The Companyâs CSR activities have traditionally focused on education, skill development, health, environment and promoting sustainable practices.
The objective of the CSR policy is to:
- Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Companyâs 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 Companyâs CSR and give back to the society in an organised manner through the employee volunteering programme called Employee Social Options.
The Companyâs commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the Companies Act, 2013. The Company gives preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities.
The Company had committed CSR expenditure of Rs. 289.77 Lakh for the financial year 2018-19, which included an unspent amount of Rs. 97.20 Lakh pertaining to financial year 2017-18. As against the committed CSR expenditure of Rs. 289.77 Lakh, the Company has spent Rs. 291.21 Lakh during the financial year 2018-19.
The annual report on the CSR activities is at Annexure 2 to this Report.
DIRECTORS
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. Arun Nanda (DIN: 00010029) Non-Executive Non-Independent Director retires by rotation at the 20th Annual General Meeting of the Company and being eligible has offered himself for reappointment.
Ms. Anita Arjundas, resigned as the Managing Director and as a Director of the Company effective 30th September, 2018. She resigned to pursue her interests in the development / social sector. The Board expressed its sincere appreciation for the valuable contribution made by Ms. Anita Arjundas during her tenure as the Managing Director & CEO. The Board appreciated
Ms. Anita Arjundas for her remarkable contribution in putting in place systems, processes and best practices which are comparable to the best-in-class in the Real Estate industry. Under her stewardship, the Company continued to be a leader in the integrated cities business, expanded its presence in the midpremium residential segment across geographies and embarked on a journey to become a dominant player in the affordable housing sector.
Consequent thereto and on recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 28th September, 2018, appointed Ms. Sangeeta Prasad, then CEO of the Company, as an Additional Director and as the Managing Director designated as âManaging Director & Chief Executive Officerâ (MD & CEO) with effect from 1st October, 2018. Pursuant to Section 161 of the Act and Article 128 of the Articles of Association of the Company, Ms. Prasad holds office upto the date of forthcoming Annual General Meeting. Further, in terms of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Board has proposed to the Shareholders appointment of Ms. Sangeeta Prasad as a Director of the Company, not liable to retire by rotation. Also, her appointment as Managing Director designated as MD & CEO effective 1st October, 2018 and her remuneration is being put up for the approval of the shareholders at the forthcoming Annual General Meeting of the Company.
Brief resume and other details of Mr. Arun Nanda and Ms. Sangeeta Prasad, in terms of Regulation 36(3) of SEBI LODR and Secretarial Standards on General Meeting, are provided in the Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. Both Directors i.e. Mr. Arun Nanda and Ms. Sangeeta Prasad are not disqualified from being reappointed / appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.
The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by Independent Directors. Pursuant to the provisions of the Act, the Nomination & Remuneration Committee (NRC) specified the manner of effective evaluation of the performance of the Board, its Committees and individual Directors. In terms of manner of performance evaluation specified by the NRC, the performance evaluation of the Board, its Committees and individual Directors was carried out by NRC and the Board of Directors. Further, pursuant to Schedule IV of the Act and Regulation 17(10) of the SEBI LODR, the evaluation of Independent Directors was done by the Board of Directors. For performance evaluation, structured questionnaires, 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. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflected high level of engagement of the Board of Directors and its Committees amongst its members with the Company and its management and that they are fully satisfied with the same.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in the Companies Act, 2013 and SEBI LODR.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available at the linkhttps://www.mahindralifespaces. com/wp-content/uploads/2019/04/details of familiarisation programmes for independent directors 2018-19.pdf
The salient features of the following policies of the Company and changes therein made during the year are attached herewith and marked as Annexure 3:
1. Policy on appointment of Directors and Senior Management
2. Policy on Remuneration of Directors and
3. Policy on Remuneration of Key Managerial Personnel and Employees
The aforesaid policies (as amended) are also available at the linkhttps://www.mahindralifespaces.com/investors/codes-and-policies
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 (KMP)
As on 31st March, 2019, details of Key Managerial Personnel under the Companies Act, 2013 are given below :
Sr. No. |
Name of the Person |
Designation |
1 |
Ms. Sangeeta Prasad |
Managing Director & CEO |
2 |
Mr. Suhas Kulkarni |
Company Secretary |
3 |
Mr. Jayant Manmadkar |
Chief Financial Officer |
Effective 30th September, 2018, Ms. Anita Arjundas resigned as the Managing Director and as Director. Ms. Sangeeta Prasad who was holding position of the CEO, effective 1st April, 2018, was later appointed as the Managing Director designated as the âManaging Director & CEOâ effective 1st October, 2018.
Mr. Jayant Manmadkar, Chief Financial Officer (CFO) of the Company resigned w.e.f. 30th April, 2019 to pursue professional opportunities outside the real estate sector. The Board puts on record its sincere appreciation for the services rendered by Mr. Manmadkar during his tenure as the CFO.
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 two consecutive meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards-I on Board Meetings and SEBI LODR.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) 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;
(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 31st March, 2019 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 are 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 Statements. The Audit Committee of the Board reviews the internal control systems, the adequacy of internal audit function and significant internal audit findings with the management, Internal Auditors and Statutory Auditors.
AUDIT COMMITTEE
As on 31st March, 2019, the Audit Committee comprised of three Independent Directors, namely Mr. Ameet Hariani, Mr. Shailesh Haribhakti, Mr. Bharat Shah, and one Non-Executive NonIndependent Director, Dr. Anish Shah. Mr. Shailesh Haribhakti resigned as the Chairman of the Audit Committee from the close of business hours of meeting of the Audit Committee held on 27th April, 2018 but continued as a member of the Audit Committee. Mr. Ameet Hariani, Independent Director was appointed as a member of the Audit Committee in the Board Meeting held on 27th April, 2018 and was appointed as the Chairman of the Audit Committee at the meeting of Audit Committee held on 30th July, 2018.
All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman of the Company, 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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to report genuine concerns in the prescribed manner to freely communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Companyâs Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimisation of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell consisting of Chief Legal Officer & Company Secretary, Chief Financial Officer and Chief Ethics Officer (Chief People Officer). During the year, no person was denied access to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web link https://www.mahindralifespaces.com/media/ investor/codes-and-policies/Whistle%20Blower%20Policy.pdf
RISK MANAGEMENT
The Company has in place a process to inform the Board about the risk assessment and minimisation procedures. It has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Presently, Regulation 21 of the SEBI LODR with respect to Risk Management Committee is not applicable to your Company. However, the Board has constituted Risk Management Committee for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. As on 31st March, 2019, the Committee comprised of Independent Director, Mr. Shailesh Haribhakti, Managing Director & CEO, Ms. Sangeeta Prasad and Chief Financial Officer, Mr. Jayantt Manmadkar (resigned w.e.f. 30th April, 2019). During the year, Ms. Anita Arjundas ceased to be a member of the Committee consequent to her resignation as the Managing Director and Director of the Company effective 30th September, 2018. The Board at its meeting held on 28th September, 2018 appointed Ms. Sangeeta Prasad as a member of the Committee effective 1st October, 2018.
AUDITORS
The Shareholders of the Company at the 18th Annual General Meeting of the Company held on 25th July, 2017, had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (ICAI Registration Number 117366W/W-100018), as Statutory Auditors of the Company to hold office until the conclusion of the 23rd Annual General Meeting to be held in the calendar year 2022 to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.
Pursuant to amendment to Section 139 (1) of the Companies Act, 2013, ratification of appointment of Statutory Auditor at every Annual General Meeting is not required.
As required under the provisions of Section 139(1) and 141 of the Companies Act, 2013 read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the auditors to the effect that they are eligible to continue as Statutory Auditor of the Company.
The notes of the financial statements referred to in the Auditorsâ Report issued by M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai for the financial year ended on 31st March, 2019 are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
The Board of Directors, on recommendation of the Audit Committee, has appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai, as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2018-19. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141 and proviso to Section 148(3) of the Act.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, a resolution seeking Shareholdersâ ratification for remuneration payable to CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant is included in the Notice convening the Annual General Meeting.
The Company is required to maintain cost records as specified under Section 148 (1) of the Companies Act, 2013 and such accounts and records are made and maintained by the Company for the financial year 2018-19.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Martinho Ferrao & Associates, Practising Company Secretaries, to conduct the secretarial audit of the Company.
The Secretarial Audit Report for the financial year ended 31st March, 2019, is annexed herewith and marked as Annexure 4 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
The Company being formed for and engaged in real estate development (Infrastructural facilities) is exempt from the provisions of Section 186 of the Companies Act, 2013 related to any loans made or any guarantees given or any securities provided or any investments made by the Company. However, the details of the investments made and loans given are provided in the standalone financial statement at Note nos. 7 and 8.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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 armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. In view of the above, the requirement of giving particulars of contracts / arrangements / transactions made with related parties, in Form AOC-2 are not applicable for the year under review.
The âPolicy on materiality of and on dealing with related party transactionsâ (as amended) as approved by the Board may be accessed on the Companyâs website at the linkhttps://www. mahindralifespaces.com/wp-content/uploads/2019/04/policy-on-materiality-of-and-dealing-with-related-party-transactions.pdf
The Directors draw attention of the members to Note no. 36 to the standalone financial statement which sets out related party disclosures.
DEPOSITS, LOANS, ADVANCES AND OTHER TRANSACTIONS
During the year, the Company has not accepted any deposits from the public or its employees. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Regulation 34(3) and 53 (f) read with Schedule V of the SEBI LODR are provided in the standalone financial statement at Note no. 40.
Further, in terms of Regulation 34(3) and 53 (f) read with Schedule V of the SEBI LODR, details of the transactions of the Company, with the promoter and holding company Mahindra & Mahindra Limited holding 51.49 percent in the paid up equity capital of the Company as on 31st March, 2019, in the format prescribed in the relevant accounting standards for annual results, are given in Note No. 36 to the Standalone Financial Statement.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information 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 is given in Annexure 5 to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under 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 given in Annexure 6 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours up to the date of the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Companyâs website at:https://www.mahindralifespaces. com/investors/stock-exchange-filings/other-filing-information
EXTRACT OF ANNUAL RETURN
The Annual Return in Form MGT-7 and its extract in Form MGT-9 for the financial year ended 31st March, 2019, are available on the website of the Company athttps://www.mahindralifespaces. com/investors/stock-exchange-filings/other-filing-information
GENERAL
- The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
- No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
- During the year, no revision was made in the previous financial statement of the Company.
- For the financial year ended on 31st March, 2019, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
CAUTIONARY STATEMENT
Certain statements in the Directorsâ Report describing the Companyâs 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 Companyâs operations include labour and material availability, and prices, cyclical demand and pricing in the Companyâs principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.
DISCLAIMER
The Company shall be registering its forthcoming projects at an appropriate time in the applicable jurisdictions / States under the Real Estate (Regulation and Development) Act, 2016 (RERA) and Rules thereunder. Till such time, the forthcoming projects are registered under RERA, none of the images, material, projections, details, descriptions and other information that are mentioned in the Annual Report for the year 2018-19, should be deemed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer, or invitation to acquire within the purview of the RERA. The Company uses carpet areas as per RERA in its customer communication. However, the data in saleable area terms has been presented in the Annual Report for the year 2018-19 to enable continuity of information to investors and shall not be construed to be of any relevance to home buyers / customers.
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 employees of the Company.
For and on behalf of the Board
Arun Nanda
Chairman
DIN:00010029
Date: 12th June, 2019
Place: Mumbai
Mar 31, 2018
BOARDâS REPORT
Boardâs Report to the Members
The Directors present their nineteenth report together with the audited financial statement of your Company for the year ended on 31st March, 2018.
FINANCIAL HIGHLIGHTS (STANDALONE)
(Rs, in lakh)
Financial Year 2018 |
Financial Year 2017 |
|
Income from Operations ............................................................................................................ |
47,500 |
68,055 |
Other Income............................................................................................................................. |
8,222 |
7265 |
Total Income .............................................................................................................................. |
55,722 |
75,320 |
Profit Before Depreciation, Finance cost and Taxation ............................................................. |
11,830 |
10,686 |
Less : Depreciation.................................................................................................................... |
396 |
434 |
Profit Before Finance cost and Taxation ................................................................................... |
11,434 |
10,252 |
Less : Finance Cost................................................................................................................... |
3,541 |
3,197 |
Profit Before Taxation................................................................................................................ |
7,893 |
7055 |
Less : Provision for Taxation..................................................................................................... |
||
⢠Current Tax...................................................................................................................... |
2,566 |
2,349 |
⢠Deferred Tax (including MAT Credit)............................................................................... |
15 |
(188) |
Profit After Tax........................................................................................................................... |
5,312 |
4,894 |
Add: Balance of Retained earnings of earlier years.................................................................. |
53,216 |
50,187 |
Add: Transfers from other reserves........................................................................................... |
- |
1,030 |
Retained earnings available for appropriation........................................................................... |
58,528 |
56,111 |
Add: Other Comprehensive Income / (Loss)1............................................................................ |
(15) |
68 |
Less: Dividend paid on Equity Shares2.................................................................................... |
3,079 |
2,462 |
Less: Income-tax on Dividend paid**......................................................................................... |
416 |
501 |
Retained earnings carried forward............................................................................................ |
55,018 |
53,216 |
DIVIDEND
For the Financial Year 2017-18, your Directors have recommended a dividend of Rs, 6 per equity share of the face value of Rs, 10 each of the Company, i.e. 60 percent, payable to those shareholders whose names appear in the Register of Member as on the Book Closure Date.
The equity dividend outgo for the proposed dividend on equity shares for the financial year 2017-18, inclusive of tax on distributed profits and net of tax on distributed profits on dividend proposed from the subsidiaries during the current financial year, amounts to Rs, 3,283.06 lakh. The dividend shall be paid out of the profits for the financial year 2017-18.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODRâ), the Board of Directors of the Company at its meeting held on 27th October, 2016 has formulated and adopted âDividend Distribution Policyâ. The Dividend Distribution Policy is attached herewith and marked as Annexure 1 and is also available on the Companyâs website at https://www.mahindraLifes paces.com/ media/1315/dividend-distribution-policy.pdf.
RESERVES
Out of the profits available for appropriation, no amount has been transferred to any reserves for the year under review.
OPERATIONS / STATE OF THE COMPANYâS AFFAIRS
India witnessed a marginal decline in macro-economic performance in 2017-18. According to estimates released by the Central Statistics Office (CSO), Indiaâs GDP growth is estimated at 6.6 percent in 2017-18, down from 7.1 percent in 2016-17. The deceleration was broad-based with a decline in both industrial and agricultural growth. More recently, quarterly growth has shown an upward trajectory and there has been a rebound in private consumption. As a result, the growth outlook for the Indian economy for 2018-19 has also turned positive with the RBI projecting the GDP growth to strengthen to 7.4 percent in 2018-19.
The Company sold 1,357 residential units aggregating to 1.16 million square feet of saleable area in 2017-18 compared to 863 units aggregating to 0.91 million square feet in the previous year. The sales growth of 57 percent and 27 percent by area sold was achieved inspite of the Company having to defer the launch of three of its projects in Mumbai due to High Court related restrictions and two of its projects, one each in Pune and Chennai, due to pending approvals. The launch of its third affordable housing projects, Happinest, Palghar met with a tremendous response with over 389 units sold in 45 days of launch.
The focus on execution continued during the year with the completion of construction aggregating to 0.68 million square feet and the handover of 1,592 units to customers.
In the affordable housing segment, where efficiencies are a critical component of the business plan, the two Happinest projects in Avadi and Boisar saw around 75 percent of the total launched phases being completed and around 1,155 units have already been handed over to the customers since construction commenced in 2015-16.
The Company is currently developing 3.97 million square feet with another 4.44 million square feet available in the form of forthcoming projects, new phases of on-going projects and new projects that are in various stages of planning, for launch in the future.
In the Integrated cities and industrial clusters segment, around 62 acres of land leases were concluded during the year across the two operational World Cities in Jaipur and Chennai. In 201819, the Company expects to benefit from the ability to market to a wider customer base at Jaipur with the conversion of the sector-specific SEZs into a multi-product SEZ in April, 2018. During the year, the Company also launched its new brand for midsized acres industrial clusters called âORIGINS by Mahindra World Cityâ. The first two of these clusters, near Chennai and Ahmedabad, are in various stages of planning and development.
A more detailed account of the Companyâs operations is provided in the Management Discussion and Analysis Report, which forms a part of this Annual Report.
The standalone and consolidated financial statements for financial year 2017-18 have been prepared in accordance with applicable Indian Accounting Standards (INDAS).
The consolidated total income of your Company stood at Rs, 64,413 lakh in 2017-18 as compared to Rs, 83,102 lakh in 2016-17. The consolidated Profit before tax (PBT) stood at Rs, 13,454 lakh in 2017-18 as compared to Rs, 13,890 lakh in 2016 17, whereas the consolidated profit after tax (PAT) and minority interest was Rs, 10,100 lakh in 2017-18 as compared to Rs, 10,224 lakh in 2016-17.
Total income of your Company as a standalone entity was Rs, 55,722 lakh as compared to Rs, 75,320 lakh in 2016-17. PBT was Rs, 7,893 lakh as compared to Rs, 7,055 lakh in 2016-17, whereas PAT was Rs, 5,297 lakh as compared to Rs, 4,962 lakh in 2016
17. Total income in 2017-18 includes dividend income of Rs, 666 lakh from Mahindra World City (Jaipur) Limited and Rs, 370 lakh from Mahindra Integrated Township Limited, subsidiaries of the Company. In 2016-17, the Company had received dividend income of Rs, 824 lakh from Mahindra World City (Jaipur) Limited, a subsidiary of the Company.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.
AWARDS AND RECOGNITION
Your Company and its subsidiaries received several awards and recognitions during the financial year 2017-18. Some of the prestigious awards are:
- Mahindra Life space Developers Ltd was ranked 29th in the list of Great Places to Work in India, in the âMid-sized Companiesâ category.
- Mahindra Life space Developers Ltd was the only real estate company to receive âGolden Peacock Environment Management Award 2017â.
- Mahindra World City, Jaipur received the award for âBest Public Private Partnership Modelâ by Business World Smart Cities Conclave & Awards 2017.
- Mahindra World City, Chennai received awards for:
> âBest Environment Friendly Projectâ by Golden Globe Tigers Awards 2017.
- âCSR Excellence in Waste Managementâ by Bureaucracy Today.
- âHighest Exports in SEZ Developer Category (2015-
16)â and was adjudged runner up for âHighest Employment in SEZ Developer Category (2014-15)â by Madras Export Processing Zone.
- Mahindra Lifespace Developers Ltd received âSocial Media Campaign of the yearâ at CMO Asia 2018 for âIAMGREENARMYâ campaign.
- LâArtista by Mahindra Lifespace Developers Ltd received the âBest Residential Project under Ultra Luxury Segmentâ award at the CNBC-AWAAZ Real Estate Awards 2017-18.
- Bloomdale by Mahindra Lifespace Developers Ltd received the âBest Residential Project under Affordable Segmentâ award at the CNBC-AWAAZ Real Estate Awards 2017-18.
- Nova in Mahindra World City, Chennai received âLow Cost Housing Apartment Projectâ at the 5th NDTV Property Awards.
- Two projects by Mahindra Lifespace Developers Ltd â Vivante in Andheri, Mumbai and Happinest in Boisar, Maharashtra were conferred with the 2nd and 3rd prize respectively for Vishwakarma award for Health, Safety and Environment by the Construction Industry Development Council.
SHARE CAPITAL
During the year, the Company has allotted 11,200 equity shares of '' 10 each at an exercise price of '' 10 per share to the eligible grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme-2012 (ESOS-2012). No Stock Options were exercised under Employee Stock Option Scheme-2006 (ESOS-2006).
The Company also allotted 10,263,388 equity shares with a face value of '' 10 each for cash at a price of '' 292 per equity share including a premium of '' 282 per equity share in the ratio of
1 (one) Right Equity Share for every 4 (four) fully paid-up equity shares of the Company held by the Equity Shareholders on the Record Date i.e. 31st March, 2017. The proceeds from the Rights Issue have been fully utilized for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.
Consequently, during the year, the issued equity share capital has increased from '' 4,109.44 lakh to '' 5,137.92 lakh and the subscribed and paid-up equity share capital of the Company has increased from '' 4,105.36 lakh to '' 5,132.81 lakh.
In April 2018, the Company has allotted 5,600 equity shares of '' 10 each at an exercise price of '' 10 per share to the eligible grantees pursuant to exercise of stock options granted under ESOS-2012. Consequently, the issued equity share capital has increased from '' 5,137.92 lakh to '' 5,138.48 lakh and the subscribed and paid-up equity share capital of the Company has increased from '' 5,132.81 lakh to '' 5,133.37 lakh.
The allotment of 51,063 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (now corresponding to Section 126 of the Companies Act, 2013), till such time the title of the bonafide owners 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.
NON-CONVERTIBLE DEBENTURES
On 4th April, 2013, the Company had issued and allotted 5,000 - Secured Listed Rated Redeemable 10.78 percent YTM, Non-Convertible Debentures (NCDs) with a face value of '' 10 lakh each for cash at par, aggregating '' 50,000 lakh (Rupees Fifty Thousand Lakh Only) vide Series I, Series II, and Series III on Private Placement basis. The proceeds of the NCDs issue were fully utilized for the purposes of the issue.
Series I, II and III of Secured Listed Rated Redeemable 10.78 percent YTM, comprising of 1,250, 1,750 and 2,000 Non-Convertible Debentures (NCDs) with a face value of '' 10 lakh each aggregating '' 50,000 lakh (Rupees Fifty Thousand Lakh Only) were redeemed in accordance with the terms of NCDs on 4th April, 2016, 3rd April, 2017 and 4th April, 2018, respectively along with redemption premium and interest thereon.
EMPLOYEE STOCK OPTIONS SCHEME
During the year, in accordance with the ESOS-2012, the Nomination and Remuneration Committee had on 25th July, 2017 and 30th January, 2018, approved grant of total 21,000 Stock Options to the eligible employees, at an exercise price of '' 10 each which is equal to the face value of the equity share of the Company. During the year, no Stock Options have been granted under ESOS - 2006.
There is no scheme as envisaged under section 67 of the Companies Act, 2013 in respect of shares on which voting rights are not directly exercised by the employees.
There are no material changes made to the existing schemes i.e. ESOS-2006 and ESOS-2012. The existing schemes are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and other applicable Regulations and Circulars in force from time to time.
The Information that the Company is required to disclose in relation to ESOS-2006 and ESOS-2012 under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is uploaded on the website of the Company at https://www.mahindraLifes paces.com/investors/disclosures-under-sebi
HOLDING COMPANY
At the beginning of the Financial Year 2017-18, the Promoter and the Holding Company i.e. Mahindra and Mahindra Limited (M&M) was holding 2,08,46,126 equity shares representing 50.78 percent of the total paid-up equity capital of the Company. Consequent to the allotment of equity shares in the Rights Issue of the Company, M&M, holds 2,64,39,850 equity shares of the total paid-up equity capital of the Company. Consequent to the allotment of equity shares in the Rights Issue and the exercise of stock options during this year the percentage holding of M&M, at the end of the year has changed to 51.51 percent of the paid-up equity capital of the Company.
The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013
A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013, and their contribution to the overall performance of the Company is provided in the Consolidated Financial Statement at Note no. 44.
The policy for determining material subsidiaries is available on the Companyâs website at https://www.mahindraLifes paces.com/ media/1323/policy-for-determining-material-subsidiaries.pdf
SUBSIDIARY COMPANIES
Mahindra World City (MWC), Chennai, is implemented by Mahindra World City Developers Limited (MWCDL), currently an 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. 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) â 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 zone. At the end of 2017-18, the project had a total area of 1,524 acres. With greater stabilization in the business zone, the focus is now on developing the residential and social infrastructure.
Mahindra World City, Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. Mahindra World City, Jaipur is being developed as a Multi-Product Special Economic Zone and a Domestic Tariff Area for which 2,913 acres have already been acquired. Currently, the project has five SEZ zones (2 in IT / ITES, 1 each in Handicrafts, Engineering & Related Industries, Gems & Jewellery), a Domestic Tariff Area and a Residential and Social zone. The Ministry of Commerce and Industry (Department of Commerce) Government of India vide its notification dated 17th April, 2018 has approved consolidation of the sector specific Special Economic Zones (SEZs) into a multi-product SEZ and has re-notified the areas of these SEZs as a Multi-Product SEZ. The recognition as a Multi-
Product SEZ will enable diverse sectors including those earlier notified, to establish their export units in the Multi-Product SEZ which may see increased exports and job opportunities from the export units set up in the Multi-Product SEZ. The focus is currently on lease of industrial land in the project as well as on developing the blueprint for the launch of the Residential and Social zone.
Mahindra Integrated Township Limited (MITL) is engaged as a co-developer in developing the residential township area at Mahindra World City, Chennai. Its current developments include âIris Courtâ and âNovaâ. Additionally, MITL is in the process of obtaining approvals for its next project at MWC, Chennai. After excluding the area under the above projects, MITL still has approximately 122 acres to be developed in phases for offering products in different formats and segments. MITL is 96.30 percent owned by the Company.
Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and a co-developer is developing a gated residential community in approximately 55 acres within Mahindra World City, Chennai, under the name âAqualilyâ.
Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between the Company and B.E. Billimoria & Co. Limited (BEBL), respectively. MBDL is developing a gated residential community âBloomdaleâ across approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). During
2016-17, certain disputes arose between the main contractor of Bloomdale BEBL and MBDL under the Construction Contract, which remained sub-judice on the date of this report. During the year, certain disputes arose under Shareholders Agreement (SHA) between the Company and BEBL. The Company has exercised its Call Option under the SHA and has called upon BEBL to tender its entire shareholding of 30%, in MBDL, for transfer to the Company. The disputes amongst BEBL, the Company and MBDL remained sub-judice on the date of this report and the Company and MBDL, in consultation with lawyers, have taken necessary steps to protect the interests of customers of Bloomdale and of the Company and MBDL.
Mahindra Homes Private Limited (MHPL), is a 74.98 : 25.02 joint venture between the Company and SCM Real Estate (Singapore) Private Limited (SCM), respectively and is developing in collaboration with a developer and land owning companies, a group housing project âLuminareâ at NCR on approximately 6.80 acres and a residential project âWindchimesâ at Bengaluru on approximately 5.90 acres. The Company is exploring the possibility of undertaking additional projects in the mid-premium residential segment in India.
Mahindra Happinest Developers Limited (MHDL) incorporated on 6th September, 2017, is a 51:49 joint venture between MLDL and HDFC Capital Affordable Real Estate Fund - I, respectively. Thus, MHDL is a Subsidiary of the Company and cosequently, a subsidiary of the ultimate holding Company M&M.
MHDL launched its first affordable housing project in Palghar, Maharashtra, on approximately 8.35 acres, under the brand âHappinestâ.
Mahindra Industrial Park Chennai Limited (MIPCL), is a 60:40 joint venture between MWCDL and Sumitomo Corporation, Japan, respectively. Accordingly, MIPCL is a subsidiary of MWCDL and consequently, a subsidiary of the Company. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 264 acres under the brand âOrigins by Mahindra World Cityâ.
Industrial Cluster Private Limited (ICPL) a wholly owned subsidiary of the Company has acquired approximately 268 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster. During the year, the Company partnered with International Finance Corporation (IFC), a member of the World Bank Group and received funding from IFC for the upcoming project at Jansali. The project will be marketed under the brand âOrigins by Mahindra World Cityâ.
Mahindra Infrastructure Developers Limited (MIDL), a wholly owned subsidiary of the 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.
Mahindra World City (Maharashtra) Limited (MWCML), is a
wholly owned subsidiary of the Company, which was set up to undertake large format development. The Company is looking out for an appropriate business opportunity to take up projects in real estate development. During the year, consequent to the order of the Honâble National Company Law Tribunal pursuant to the scheme of arrangements, Raigad Industrial and Business Park Limited, a wholly owned subsidiary of the Company and Kismat Developers Private Limited, Topical Builders Private Limited, associate companies of the Company merged with Mahindra World City Maharashtra Limited (MWCML). As a result, Deep Mangal Developers Private Limited, which was a subsidiary of Topical Builders Private Limited became a subsidiary of MWCML and consequently a subsidiary of the Company and of the ultimate holding company. Deep Mangal Developers Private Limited is exploring the possibility of undertaking a large format development on the southern coast of Maharashtra where it already owns land. Also as a result of the merger, Mahindra Construction Company Limited and Moonshine Construction Private Limited became subsidiary companies of the Company. The merger process was initiated with the purpose of reducing non-operative entities and compliance costs thereby eliminating overheads. In the current year, the Company will continue the process of identifying other non-operating entities for merger to streamline the numbers of entities and eliminate overheads of such entities.
Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra under the brand âOrigins by Mahindra World Cityâ for which the company is in the process of procuring the required land area.
Industrial Township (Maharashtra) Limited (ITML), a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development.
Anthurium Developers Limited (ADL) a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development projects.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance service for water and sewerage facilities at Tirupur, India and is a 98.99 percent subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.
JOINT VENTURE COMPANIES
There is no direct joint venture company of the Company, except, Mahindra World City Developers Limited, Mahindra World City (Jaipur) Limited, Mahindra Homes Private Limited, Mahindra Bebanco Developers Limited and Mahindra Happinest Developers Limited which are all joint venture subsidiary companies and have been covered in the section on Subsidiary Companies.
ASSOCIATE COMPANIES
Mahindra Knowledge Park (Mohali) Limited is an associate company of the Company.
CONSOLIDATED FINANCIAL STATEMENT
The audited consolidated financial statement of the Company prepared in accordance with the applicable Accounting Standards along with all relevant documents and the Auditorsâ Report forms part of this Annual Report.
The financial statements of Subsidiary companies under the Companies Act, 2013 are not attached along with the financial statements of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the Company at web link: https://www.mahindraLifes paces.com/ investors/financial-information
The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries 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 Companyâs operations forms 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 with the conditions of Corporate Governance as stipulated under
Para E of Schedule V of the SEBI LODR forms part of this Annual Report.
SUSTAINABLE DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT
Your Company has been at the forefront of the real estate industry in India to achieve mission of âTransforming urban landscapes by creating sustainable communitiesâ. Sustainability is thus a core agenda for the Company. The details of the Companyâs approach to sustainability are covered in the Business Responsibility Report.
Presently, the requirement of publishing Business Responsibility Report (BRR) under Regulation 34(2)(f) of SEBI LODR is not applicable to the Company. However, the Company has voluntarily provided the BRR for the financial year 2017-18 which forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Companyâs 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. The Company, in every financial year, in line with the new Companies Act, 2013, pledges to spend, two percent, of the average net profits made during the three immediately preceding financial years towards CSR initiatives.
The Company has constituted a Corporate Social Responsibility Committee comprising Mr. Arun Nanda â Non-Executive Non-Independent Director, Mr. Shailesh Haribhakti â NonExecutive Independent Director and Ms. Anita Arjundas â Managing Director. The role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend 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 the CSR projects or programs or activities undertaken by the Company.
The Companyâs CSR Policy lays out the vision, objectives and implementation mechanisms. The Companyâs CSR policy is available on the Companyâs web link at https://www. mahindraLifes paces.com/media/1050/corporate-social-responsibility-csr-policy.pdf
The Companyâs CSR activities have traditionally focused on education, skill development, health, environment and promoting sustainable practices.
The objective of the CSR policy is to:
- Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Companyâs 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 Companyâs CSR and give back to the society in an organised manner through the employee volunteering programme called Employee Social Options.
The Companyâs commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the Companies Act, 2013. The Company gives preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities.
Of the total committed CSR expenditure of '' 389.09 lakh for financial year 2017-18 (including '' 39.11 lakh being unspent amount of the previous year), the Company has spent '' 291.89 lakh as per the approved CSR plan for financial year 2017-18. During the year, the Company had committed CSR expenditure of '' 157.20 lakh for the establishment of the âCentre of Excellence for sustainable habitatsâ and for research work therein by TERI, of which an amount of '' 60 lakh has been spent during the year and a balance amount of '' 97.20 lakh shall be paid, based on milestones to be achieved by TERI, during Financial Year 2019.
In view of the above, the Board has approved that an amount of '' 97.20 lakh be carried forward to the next year and the carried forward amount shall be over and above the next yearâs CSR allocation equivalent to at least 2 percent of the average net profit of the Company of the immediately preceding three years.
The annual report on the CSR activities in the prescribed format is at Annexure 2 to this Report.
DIRECTORS
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Dr. Anish Shah (DIN: 02719429) Non-Executive Non-Independent Director retires by rotation at the 19th Annual General Meeting of the Company and being eligible has offered himself for re-appointment.
Pursuant to Section 152, 160, 161 and all other applicable provisions of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Mr. Ameet Hariani (DIN: 00087866), a Non-Executive Independent Director who was appointed as an Additional Director with effect from 4th September, 2017, shall hold office as per the provisions of Section 161 of the Companies Act, 2013, till the date of the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013 from a Member in writing proposing his candidature for the office of Director. Accordingly, appointment of Mr. Ameet Hariani is proposed at the ensuing Annual General Meeting as Non-Executive Independent Director for a term of 5 year with effect from 4th September, 2017.
Brief resume of Dr. Anish Shah and Mr. Ameet Hariani, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board, Committees and shareholding in the Comany as stipulated under Regulation 36(3) of SEBI LODR, are provided in the Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. Both Directors i.e. Dr. Anish Shah and Mr. Ameet Hariani are not disqualified from being re-appointed / appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.
During the year, two Independent Directors of the Company, Mr. Sanjiv Kapoor and Dr. Prakash Hebalkar ceased to be Independent Directors effective 30th July, 2017 on expiry of their second term of office. The Board of Directors appreciated their dedicated efforts and thanked them for their immense contribution to the Company during their tenure.
Pursuant to the provisions of the Companies Act, 2013 and Part D of Schedule II of SEBI LODR, evaluation of every Directorâs performance was done by Nomination and Remuneration Committee. The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof was carried out by Independent Directors. Evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Director being evaluated. The performance evaluation of the Chairman of the Company was also carried out by Independent Directors, taking into account the views of the Executive Director and Non-Executive Directors. Structured questionnaires were prepared in accordance with the SEBI Guidelines on Board Evaluation 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. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflect the overall engagement of the Board and its Committees with the Company and its management and they are fully satisfied with the same.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in sub-section 6 of Section 149 of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI LODR.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available at the link https://www.mahindraLifes paces.com/ media/4810/familiarisation-programme-for-independent-directors.pdf
The following policies of the Company are attached herewith and marked as Annexure 3, Annexure 4 and Annexure 5:
1. Policy on appointment of Directors and Senior Management (Annexure 3)
2. Policy on Remuneration of Directors (Annexure 4) and
3. Policy on Remuneration of Key Managerial Personnel and Employees (Annexure 5)
The Managing Director 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 (KMP)
The Company has following persons as Key Managerial Personnel under the Companies Act, 2013:
Sr. No. |
Name of the Person |
Designation |
1 |
Ms. Anita Arjundas |
Managing Director (Managing Director & Chief Executive Officer upto 31st March, 2018) |
2 |
Ms. Sangeeta Prasad |
Chief Executive Officer (with effect from 1st April, 2018) |
3 |
Mr. Suhas Kulkarni |
Company Secretary |
4 |
Mr. Jayant Manmadkar |
Chief Financial Officer |
The Board at its meeting held on 30th January, 2018 re-designated, Ms. Sangeeta Prasad, CEO - Integrated Cities and Industrial Clusters, as the Chief Executive Officer (CEO) of the Company effective 1st April, 2018.
Ms. Sangeeta Prasad, aged 50 years is an Engineer from Jadavpur University, Kolkata and a post graduate from Indian Institute of Management, Lucknow and has over 25 years of experience which includes a long stint in the steel industry prior to her joining as the COO of Mahindra World City Developers Limited in 2008. In 2013, she was promoted as CEO - Integrated cities and Industrial clusters at Mahindra Lifespace Developers Limited. A Chevening scholar, Ms. Sangeeta Prasad was recognised as one of the Top 30 emerging Women Leaders in India by Business Today Magazine in the year 2010. Ms. Sangeeta Prasad is a member of the Board of Governors of Indian Institute of Management, Lucknow and on the Board of various companies.
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, the revised Secretarial Standards - 1 (SS-1) issued by the Institute of Company Secretaries of India and SEBI LODR.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) 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;
(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 31st March, 2018 and of the profit and loss 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 are 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 Statements. The Audit Committee of the Board reviews the internal control systems, the adequacy of internal audit function and significant internal audit findings with the management, Internal Auditors and Statutory Auditors.
AUDIT COMMITTEE
The Audit Committee of the Company as on 31st March,
2018 comprised of two Independent Directors, namely Mr. Shailesh Haribhakti, Mr. Bharat Shah, and one Non-Executive Non-Independent Director, Dr. Anish Shah. Mr. Shailesh Haribhakti is the Chairman of the Committee. At the close of the meeting of the Audit Committee held on 27th April, 2018, Mr. Shailesh Haribhakti resigned as the Chairman of the Audit Committee. Mr. Shailesh Haribhakti continues to be a member of the Audit Committee. The Board at its meeting held on 27th April, 2018, has appointed Mr. Ameet Hariani, Independent Director as a member of the Audit Committee.
All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman of the Company, 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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to report genuine concerns in the prescribed manner to freely communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Companyâs Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimisation of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell consisting of Head
- Legal & Secretarial, Chief Financial Officer and Chief Ethics Officer (Head-Human Resources). During the year, no person was denied access to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web link https://www.mahindraLifes paces.com/media/1318/ whistle-blower-policy.pdf
RISK MANAGEMENT
The Company has in place a process to inform the Board about the risk assessment and minimisation procedures. It has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Presently, Regulation 21 of the SEBI LODR with respect to Risk Management Committee is not applicable to your Company. However, the Company has constituted a âRisk Management Committeeâ consisting of Mr. Shailesh Haribhakti, Non-Executive Independent Director, Ms. Anita Arjundas, Managing Director of the Company, and the Chief Financial Officer of the Company, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. The Board reviews implementation and monitoring of the risk management plan for the Company including identification of risks, if any, which in the opinion of the Board may threaten the existence of the Company.
AUDITORS
The Shareholders of the Company at the 18th Annual General Meeting of the Company held on 25th July, 2017, had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (ICAI Registration Number -117366W/W-100018), as Statutory Auditors of the Company to hold office from the conclusion of the 18th Annual General Meeting until the conclusion of the 23rd Annual General Meeting to be held in the calendar year 2022 (Subject to ratification of their appointment at every Annual General Meeting) to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.
As required under the provisions of Section 139(1) and 141 of the Companies Act, 2013 read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the above auditors whose appointment is proposed to be ratified, to the effect that they are eligible to continue as Statutory Auditor of the Company.
Accordingly, the members are requested to ratify the appointment of M/s. Deloitte Haskins & Sells LLP as Statutory Auditors of Company.
The Companies (Amendment) Act, 2017 (Amendment Act) which received the assent of the President on the 3rd January, 2018, inter alia, provides vide clause 40 of the Amendment Act for omission of the first proviso to Section 139(1) of the Companies Act, 2013 which stipulates ratification of appointment of Statutory Auditor at every Annual General Meeting. The clause 40 of the Amendment Act is yet to be notified.
Although, the ordinary resolution passed by the Shareholders at the 18th Annual General Meeting held on 25th July, 2017 provides for ratification of the appointment of Statutory Auditor at every Annual General Meeting, after notification of clause 40 of the Amendment Act, such ratification will not be necessary.
The notes of the financial statements referred to in the Auditorsâ Report issued by M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai for the financial year ended on 31st March, 2018 are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
The Board of Directors, on recommendation of the Audit Committee, has appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai, as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2017-18. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, a resolution seeking Shareholdersâ ratification for the remuneration payable to CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant is included in the Notice convening the Annual General Meeting.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Martinho Ferrao & Associates, Practising Company Secretaries, to conduct the secretarial audit of the Company for the financial year(s) commencing on and from 1st April,
2014. The Secretarial Audit report for the financial year ended 31st March, 2018, is annexed herewith and marked as Annexure 6 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 the 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. 8.
Particulars of investment made under Section 186 of the Companies Act, 2013 are provided in the standalone financial statement at Note no.7.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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 armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. In view of the above, the requirement of giving particulars of contracts / arrangements / transactions 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 on dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link https://www.mahindraLifes paces.com/media/1322/policy-on-materiality-of-and-dealing-with-related-party-transactions.pdf
The Directors draw attention of the members to Note no. 36 to the standalone financial statement which sets out related party disclosures.
DEPOSITS, LOANS AND ADVANCES
The 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 Regulation 34(3) and 53(f) read with Schedule V of the SEBI LODR are provided in the standalone financial statement at Note no. 41.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information 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 is given in the Annexure 7 to this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under 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 given in Annexure 8 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours up to the date of the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Companyâs website at: https://www.mahindraLifes paces. com/investors/disclosures-under-sebi
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
- The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
- No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
- During the year under review, no revision was made in the previous financial statement of the Company.
- During the year ended on 31st March, 2018, there were no cases filed / reported pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operation in future.
CAUTIONARY STATEMENT
Certain statements in the Directorsâ Report describing the Companyâs 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 Companyâs operations include labour and material availability, and prices, cyclical demand and pricing in the Companyâs principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.
DISCLAIMER
The Company shall be registering its forthcoming projects at an appropriate time in the applicable jurisdictions / States under the Real Estate (Regulation and Development) Act, 2016 (RERA) and Rules thereunder. Till such time, the forthcoming projects are registered under RERA, none of the images, material, projections, details, descriptions and other information that are mentioned in the Annual Report for the year 2017-18, should be deemed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer, or invitation to acquire within the purview of the RERA. The Company uses carpet areas as per RERA in its customer communication. However, the data in saleable area terms has been presented in the Annual Report for the year 2017-18 to enable continuity of information to investors and shall not be construed to be of any relevance to home buyers / customers.
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 employees of the Company.
For and on behalf of the Board
Arun Nanda
Chairman
DIN:00010029
Date: 27th April, 2018
Place: Mumbai
Mar 31, 2017
Boardâs Report to the Members
The Directors present their eighteenth report together with the audited financial statement of your Company for the year ended on 31st March, 2017.
FINANCIAL HIGHLIGHTS (STAND-ALONE)
(Rs. in lakh)
Income from Operations................................................................................................. |
2017 |
2016 |
68,055 |
50,211 |
|
Other Income....................................................................................................... |
7,265 |
9,943 |
Total Income....................................................................................................... |
75,320 |
60,154 |
Profit Before Depreciation, Finance cost and Taxation........................................................ |
10,686 |
16,749 |
Less : Depreciation............................................................................................... |
434 |
396 |
Profit Before Finance cost and Taxation.............................................................................. |
10,252 |
16,353 |
Less : Finance Cost........................................................................................................... |
3,197 |
4,696 |
Profit Before Taxation..................................................................................................... |
7,055 |
11,657 |
Less : Provision for Taxation |
||
-Current Tax................................................................................................................... |
2,349 |
3,709 |
- Deferred Tax (including MAT Credit)............................................................................. |
(188) |
120 |
Profit After Tax............................................................................................................. |
4,894 |
7,828 |
Add : Balance of Profit for earlier years ............................................... |
50,120 |
48,225 |
Amount available for appropriation |
||
Dividend paid1 on Equity Shares (including tax on distributed profits)................................. |
2,963 |
2,798 |
Less/(Add): Transfer to/(from) Debenture Redemption Reserve .................. Balance carried forward. .............................................................. |
(1,031) 53,082 |
3,135 50,120 |
DIVIDEND
For the Financial Year 2016-17, your Directors have recommended a dividend of Rs. 6 per equity share of the face value of Rs. 10 each of the Company, i.e. 60 percent, payable to those shareholders whose names appear in the Register of Member as on the Book Closure Date.
The equity dividend outgo for the proposed dividend on equity shares for the financial year 2016-17 inclusive of tax on distributed profits (net of tax on distributed profits on dividend receivable from the subsidiaries during the current financial year) would absorb a sum of Rs. 2,753.91 lakh.
dividend distribution policy
In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODRâ), the Board of Directors of the Company at its meeting held on 27th October, 2016 has formulated and adopted âDividend Distribution Policyâ. The Dividend Distribution Policy is attached herewith and marked as Annexure 1 and is also available on the companyâs website at https://www.mahindralifespaces. com/media/1315/dividend-distribution-policy.pdf.
reserves
Out of the profits available for appropriation, no amount has been transferred to any reserves for the year under review.
operations / state of the companyâs affairs
The macro-economic environment in India during 2016 - 17 showed a moderate decline. According to the provisional estimates released by the Central Statistics Office, Indiaâs Gross Value Added (GVA) growth for 2016-17 is pegged at 6.6 per cent, compared to 7.9 per cent in the previous year. On the positive side, the impact of demonetization on economic activity was not as pronounced over a longer period of time as was initially envisaged and economic activity showed some improvement towards the end of the year. As far as the real estate sector is concerned, while the overall demand situation remained muted during the first half of the year, the same was further impacted during the November to January period. However, since then, enquiry levels improved, which if sustained can help improve the overall demand situation.
In the residential segment, the Company, along with its subsidiaries, sold 889 residential units aggregating 0.95 million square feet of saleable area in 2016-17. Construction activity was completed in six phases across three of its projects aggregating 0.93 million square feet during 2016-17, and taking the completed area to over 4.2 million square feet in the last two years. This also meant a significant increase in handovers. The Company handed over 2,254 units to its customers in 2016-17, almost three-times the 823 units handed over in the previous year.
In the integrated cities and the industrial clusters segment, over 75 acres of land leases were concluded during the year across the two operational World Cities in Jaipur and Chennai, compared to 29 acres in 2015-16. The Company expects to further benefit from the ability to market to a wider customer base at Jaipur upon conversion of the sector-specific SEZs into a multi-product SEZ. In addition, it is gearing up to launch two new industrial clusters near Chennai and Ahmedabad â in line with its strategy for growth in this segment.
Affordable housing continues to be an important growth area for the Company. Learningâs from its two pilot projects at Avadi and Boisar have enabled the Company to structure a standardized model that can be scalable. The outlook in the affordable housing space is promising, especially with recent developments on the government policies front driven by the agenda of âHousing for Allâ.
A more detailed account of the Companyâs operations is provided in the Management Discussion and Analysis Report, which forms a part of this Annual Report.
The standalone and consolidated financial statements for 201617 have been prepared in accordance with applicable Indian Accounting Standards (INDAS) and the corresponding figures for the previous year have been restated as per INDAS for the purpose of comparison.
The consolidated total income of your Company increased from Rs. 68,717 lakh in 2015-16 to Rs. 83,102 lakh in 2016-17. The consolidated Profit before tax (PBT) stood at Rs. 13,890 lakh in 2016-17 as compared to Rs. 13,752 lakh in 2015-16, whereas the consolidated profit after tax (PAT) and minority interest was Rs. 10,224 lakh in 2016-17 as compared to Rs. 9,170 lakh in 2015-16.
Total income of your Company as a standalone entity was Rs. 75,320 lakh as compared to Rs. 60,154 lakh in 2015-16. PBT was Rs. 7,055 lakh as compared to Rs. 11,657 lakh in 2015-16, whereas PAT was Rs. 4,894 lakh as compared to Rs. 7,828 lakh in 2015 16. Total income in 2016 -17 includes dividend income of Rs. 824 lakh received from its subsidiary company Mahindra World City (Jaipur) Limited. In 2015-16, the Company had received dividend income of Rs. 629 lakh from Mahindra World City (Jaipur) Limited and Rs. 178 lakh from Mahindra World City Developers Limited, subsidiaries of the Company.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.
AWARDS AND RECOGNITION
Your Company and its subsidiaries received several awards and recognitions during 2016-17. Some of the prestigious awards are:
- Mahindra Lifespace Developers Ltd was ranked 28th amongst Top 100 companies in Asia in the 2016 Channel NewsAsia Sustainability Ranking.
- Mahindra Lifespace Developers Ltd was ranked 2nd in the Diversified/Listed Category-Asia in the 2016 Global Real Estate Sustainability Benchmark (GRESB) Rankings.
- Mahindra Lifespace Developers Ltd was awarded the 2016 Porter Prize for Excellence in Governance.
- Mahindra Lifespace Developers Ltd was selected as a â2016 Working Mother and AVTAR 100 Best Company for Women in Indiaâ.
- Splendour by Mahindra Lifespaces Developers Ltd was among the Top 3 projects around the world to be honoured with the âGlobal Human Settlements Model of Residential Areaâ at the United Nations Conference on Housing and Sustainable Urban Development.
- Three projects by Mahindra Lifespaces Developers Ltd
â Windchimes in Bengaluru, Luminare in Gurgaon and Antheia in Pune â were conferred with the Vishwakarma
Award for Health, Safety and Environment by the Construction Industry Development Council.
- Happinest Avadi received the âBest Low Cost Housing Apartment Project of the Yearâ award at the NDTV Property Awards 2016.
- Mahindra World City Jaipur received the CSR Excellence Award by the Department of Industries and CSR, Government of Rajasthan under âLife on Landâ category.
SHARE CAPITAL
During the year, the Company has allotted 20,400 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2012 (ESOS - 2012). No Stock Options were exercised under Employee Stock Option Scheme - 2006 (ESOS - 2006).
Consequently, during the year, the issued equity share capital has increased from Rs. 4,107.40 lakh to Rs. 4,109.44 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 4,103.32 lakh to Rs. 4,105.36 lakh.
In April 2017, the Company has allotted 2,050 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible grantees pursuant to exercise of stock options granted under ESOS - 2012. Consequently, the issued equity share capital has increased from Rs. 4,109.44 lakh to Rs. 4,109.65 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 4,105.36 lakh to Rs. 4,105.56 lakh.
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 (now corresponding to Section 126 of the Companies Act, 2013), 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.
RIGHTS ISSUE
The Board of Directors had at its meeting held on 27th October, 2016, approved Rights Issue upto an amount of Rs. 300 crore. The Rights Issue of 10,273,600 equity shares at a price of Rs. 292 (including face value of Rs. 10 each) per equity share aggregating Rs. 2,99.99 crore in the ratio of 1:4, that is, 1 (one) Right Equity Share for every 4 (four) fully paid-up equity shares of the Company held by the Equity Shareholders on the Record Date i.e. 31st March, 2017. The Rights Issue was opened on 12th April, 2017, and closed on 26th April, 2017 (both days inclusive). The Rights Issue proceeds are being utilized for the purpose of the Issue, i.e. payment of Rights Issue expenses, repayment of debt and for general corporate purposes. There is no deviation in the use of Rights Issue proceeds from the objects stated in the Letter of Offer dated 27th March, 2017. The Right Issue was subscribed 129.18 percent of the Issue size in terms of number of equity shares applied. The Basis of Allotment was finalized on 4th May, 2017 in consultation with the BSE Limited, the Designated Stock Exchange. Accordingly, the basis of allotment was approved and 10,263,388 Equity Shares of face value of Rs. 10 each, issued at a price of Rs. 292 per Equity Share (including a premium of Rs. 282 per Equity Share) fully paid up were allotted on 5th May, 2017 by the Rights Issue Committee. The said equity shares have been listed on the BSE Limited and National Stock Exchange of India Limited and they rank pari-passu with the existing equity shares in all respects. The allotment of 10,212 Rights Equity Shares have been kept in abeyance pursuant to provisions of the Companies Act, 2013, till such time the title of the bona-fide owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of offenses relating to transactions in Securities).
Consequently, the issued equity share capital has increased from Rs. 4,109.65 lakh to Rs. 5,137.01 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 4,105.56 lakh to Rs. 5,131.90 lakh. The Securities Premium account has increased from Rs. 68,495.25 lakh to Rs. 97,438.00 lakh.
NON-CONVERTIBLE DEBENTURES
On 4th April, 2013, the Company had issued and allotted 5,000
- Secured Listed Rated Redeemable 10.78 per cent YTM, NonConvertible Debentures (NCDs) with a face value of Rs. 10 lakh each for cash at par, aggregating Rs. 50,000 lakh (Rupees Fifty Thousand lakh Only) vide Series I, Series II, and Series III on Private Placement basis. The proceeds of the NCDs issue have been fully utilized for the purposes of the issue.
Series I and II of Secured Listed Rated Redeemable 10.78 per cent YTM, comprising of 1,250 and 1,750 Non-Convertible Debentures (NCDs) with a face value of Rs.10 lakh each aggregating Rs. 30,000 lakh (Rupees Thirty Thousand lakh Only) were redeemed in accordance with the terms of NCDs on 4th April, 2016 and 3rd April, 2017, respectively along with redemption premium. In terms of the issue, the Series III of Secured Listed Rated Redeemable 10.78 per cent YTM, Nonconvertible Debentures amounting to Rs. 20,000 lakh (Rupees Twenty Thousand lakh) are due for redemption on 4th April, 2018.
EMPLOYEE STOCK OPTIONS SCHEME
During the Financial Year 2016-17, in accordance with the ESOS- 2012, the Nomination and Remuneration Committee had on 28th July, 2016, approved grant of total 30,000 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. No Stock Options have been granted under ESOS - 2006.
There is no scheme as envisaged under section 67 of the Companies Act, 2013 in respect of shares on which voting rights are not directly exercised by the employees.
There are no material changes made to the existing schemes i.e. ESOS - 2006 and ESOS - 2012. The existing schemes are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and other applicable Regulations and Circulars in force from time to time.
The Information that the Company is required to disclose in relation to ESOS-2006 and ESOS-2012 under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is uploaded on the website of the Company at https://www.mahindralifespaces.com/investors/disclosures-under-sebi
HOLDING COMPANY
At the beginning of the Financial Year 2016-17, the Promoter and the Holding Company i.e. Mahindra and Mahindra Limited (M&M) was holding 2,08,46,126 equity shares representing 50.80 percent of the total paid up equity capital of the Company. Consequent to the allotment of equity shares in the Rights Issue of the Company, M&M, as on the date of this report, holds 2,64,39,850 equity shares which represents 51.52 percent of the total paid up equity capital of the Company.
The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013
A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013, and their contribution to the overall performance of the Company is Annexed to the Consolidated Financial Statement.
The policy for determining material subsidiaries is available on the Companyâs website at the link: https://www.mahindralifespaces. com/media/1323/policy-for-determining-material-subsidiaries.pdf
SUBSIDIARY COMPANIES
Mahindra World City (MWC), Chennai, is implemented by Mahindra World City Developers Limited (MWCDL), currently an 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. 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) â 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 2016-17, the project had a total area of 1524 acres. With greater stabilization in the business zone, the focus is now on developing the residential and social infrastructure.
Mahindra World City, Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. Mahindra World City, Jaipur is being developed as a Multi-Product Special Economic Zone and a Domestic Tariff Area for which 2,913 acres have already been acquired. Currently, the project has five SEZ zones (2 in IT/ITES, 1 each in Handicrafts, Engineering & Related Industries, Gems & Jewellery), a Domestic Tariff Area and a Social and Residential zone. Going forward, the focus will continue to be on sale of industrial land in the project. Application by MWCJL for amalgamating sector specific SEZs into a multiproduct SEZ has been approved by Board of Approvals, Ministry of Commerce, Government of India at its 74th meeting held on January 6, 2017. The multiproduct SEZ notification is awaited.
Mahindra Integrated Township Limited (MITL) is engaged as a co-developer in developing residential township area at Mahindra World City, New Chennai. Its current developments include âIris Courtâ and âNovaâ. Additionally, MITL is in the process of obtaining approvals for its next project at MWC comprising around 1.08 million square feet of estimated saleable area. After excluding the area under the above projects, MITL still has approximately 120 acres to be developed in phases for offering products in different formats and segments. MITL is 96.30 per cent owned by the Company.
Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and 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 âAqualilyâ.
Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between the Company and B.E. Billimoria & Co. Limited, one of the leading construction companies in India, respectively. This company is developing a residential complex across approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). During the year, certain disputes arose between the Company and the main contractor M/s. B.E. Billimoria & Co. Ltd. The matter is presently sub-judice and the Company, in consultation with lawyers, is taking necessary steps to protect the interest of the Company and its customers.
Mahindra Homes Private Limited (MHPL) (earlier known as Watsonia Developers Private Limited and prior to that Watsonia Developers Limited), is a 74.98 : 25.02 joint venture between the Company and SCM Real Estate (Singapore) Private Limited (SCM) and is developing in collaboration with a developer, and land owning companies, a group housing project âLuminareâ at NCR on approximately 6.80 acres and a residential project âWindchimesâ at Bengaluru on approximately 5.90 acres. The company is exploring the possibility of undertaking additional projects in residential development segment in India. At the beginning of the 2016-17, MHPL was a 50:50 joint venture between the Company and SCM. On 30th March, 2017, MHPL allotted in its Right Issue 4,11,251 Series A equity shares (with voting rights) of face value Rs. 10 each to the Company. Pursuant to the allotment, the shareholding of the Company in Series A equity shares (with voting rights) of MHPL has increased from 50 percent to 74.99 percent. Basis the overall paid up share capital of MHPL, the shareholding of the Company in MHPL increased from 50.00 percent to 74.98 percent. SCM Real Estate (Singapore) Private Limited holds 25.02 percent of the paid-up share capital as a joint venture partner in MHPL. Pursuant to the increase in shareholding, MHPL became a subsidiary of the Company, and an indirect subsidiary of the Promoter of the Company, viz Mahindra and Mahindra Limited.
Mahindra Industrial Park Chennai Limited (MIPCL), is a 60:40 joint venture between the MWCDL and Sumitomo Corporation, Japan. Accordingly, MIPCL is a subsidiary of MWCDL and consequently, a subsidiary of the Company. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 264 acres.
Mahindra Infrastructure Developers Limited (MIDL), a wholly owned subsidiary of the 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.
Mahindra World City (Maharashtra) Limited (MWCML), is a wholly owned subsidiary of the Company, which was set up to undertake large format development. The Company is looking out for an appropriate business opportunity to take up projects in real estate development. The Board of Directors of MWCML has approved a Scheme of Amalgamation amalgamating Raigad Industrial & Business Park Limited, a wholly owned subsidiary company of the Company, Topical Builders Developers Private Limited and Kismat Developers Private Limited, associate companies of the Company, with MWCML and accordingly, a Scheme of Amalgamation has been filed with National Company Law Tribunal, Mumbai Bench.
Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra for which the company is in the process of procuring the required land area.
Industrial Township (Maharashtra) Limited (ITML), a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development.
Raigad Industrial & Business Park Limited (RIBPL), a wholly owned subsidiary of the Company is in the business of real estate development.
Anthurium Developers Limited (ADL) a wholly owned subsidiary of the 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 the Company has acquired approximately 268 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance service for water and sewerage facilities at Tirupur, India and is a 98.99 percent subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.
JOINT VENTURE COMPANIES
There is no direct joint venture company of the Company, except, Mahindra World City Developers Limited, Mahindra World City (Jaipur) Limited, Mahindra Homes Private Limited and Mahindra Bebanco Developers Limited which are joint venture subsidiary companies and have been dealt in the section of Subsidiary Companies.
ASSOCIATE COMPANIES
Topical Builders Developers Private Limited (TBPL), Kismat Developers Private Limited (KDPL) and Mahindra Knowledge Park (Mohali) Limited, are the associate companies of the Company.
During the year, Mahindra Homes Private Limited, which was an associate company (50: 50 joint venture company with SCM) ceased to be associate company and became a subsidiary of the Company. No other company has become or 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 the Companies Act, 2013 and applicable Accounting Standards along with all relevant documents and the Auditorsâ Report forms part of this Annual Report.
The financial statements of Subsidiaries companies are not attached along with the financial statements of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the Company at web link: https:// www.mahindralifespaces.com/investors/financial-information.
The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries 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 Companyâs 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 with the requirements of Corporate Governance as stipulated under Para E of Schedule V of the SEBI LODR forms part of this Annual Report.
SUSTAINABLE DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT
Your Company has been at the forefront of the real estate industry in India to achieve the mission of âTransforming urban landscapes by creating sustainable communitiesâ. The Company has done this by putting sustainability as a core agenda for the Company. The details of Companyâs approach to sustainability are covered in the Business Responsibility Report.
The Business Responsibility Report (BRR) for the financial year 2016-17 as required by Regulation 34(2)(f) of SEBI LODR forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Companyâs 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. The Company, in every financial year, in line with the new 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 Mr. Arun Nanda â Non-Executive Non Independent Director, Mr. Shailesh Haribhakti â Non Executive Independent Director and Ms. Anita Arjundas â Managing Director & CEO. The role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend 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 Companyâs CSR Policy lays out the vision, objectives and implementation mechanisms. The Companyâs CSR policy is available on the Companyâs web link at https://www.mahindralifespaces.com/media/1050/corporate-social-responsibility-csr-policy.pdf
The Companyâs CSR activities have traditionally focused on education, skill development, health, environment and promoting sustainable practices.
The objective of the CSR policy is to:
- Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Companyâs philanthropic activities, thus enabling maximum impact of the CSR initiatives;
- Ensure an increased commitment at all levels in the organization, to operate in an economically, socially and environmentally responsible manner while recognizing the interests of all its stakeholders;
- Encourage employees to participate actively in the Companyâs CSR and give back to the society in an organized manner through the employee volunteering programme called Employee Social Options.
The Companyâs commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the Companies Act, 2013. The Company gives preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities.
Of the total budget of Rs. 520.59 lakh for financial year 2016-17(including Rs. 132.73 lakh being unspent amount of the previous year), the Company has spent Rs. 481.49 lakh as per the approved CSR plan for financial year 2016-17. The balance Rs. 39.11 lakh which was earmarked for the purpose of education, environment, Swachh Bharat and for promoting health measures remained unspent for following reasons:
1. Rs. 0.91 lakh of Gyandeep remained unspent due to closure of one of the schools
2. Rs. 27.67 lakh of Project Hariyali remained unspent due to unsuitable forest land parcel
3. Rs. 8.82 lakh of Gram Vikas - Local infrastructure, Rs. 0.95 lakh of Swachh Bharat, Rs. 0.53 lakh of health check-up camps and Rs. 0.23 lakh of Environmental Sustainability, eradication of Poverty and Mal-nutrition remained unspent due to local community issues.
In view of the above, the Board has approved that unspent amount of Rs. 39.11 lakh, out of the minimum required CSR expenditure of the financial year 2016-17 be carried forward to the next year and the carried forward amount shall be over and above the next yearâs CSR allocation equivalent to at least 2 per cent of the average net profit of the Company of the immediately preceding three years.
The annual report on the CSR activities in the prescribed format is at Annexure 2 to this Report.
DIRECTORS
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. Arun Nanda (DIN: 00010029) Non-Executive Non-Independent Director retires by rotation at the 18th Annual General Meeting of the Company and being eligible has offered himself for reappointment.
Pursuant to Section 152, 160, 161 and all other applicable provisions of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Mr. Bharat Shah (DIN: 00136969), a Non-Executive Independent Director who was appointed as an Additional Director with effect from 1st August, 2016, shall hold office as per the provisions of Section 161 of the Companies Act, 2013, till the date of the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013 from a Member in writing proposing his candidature for the office of Director along with requisite deposit.
Brief resume of Mr. Arun Nanda and Mr. Bharat Shah, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board, Committees and shareholding as stipulated under Regulation 36(3) of SEBI LODR, are provided in the Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. Both Directors i.e. Mr. Arun Nanda and Mr. Bharat Shah are not disqualified from being re-appointed / appointed as Directors by the provisions of Section 164 of the Companies Act, 2013.
Pursuant to the provisions of the Companies Act, 2013 and Part D of Schedule II of SEBI LODR, evaluation of every Directorâs performance was done by Nomination and Remuneration Committee. The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof was carried out by the Independent Directors. The performance evaluation of the Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Director and Non-Executive Directors. Evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Director being evaluated. Structured questionnaires, 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. were circulated to the Directors for the evaluation process. The Directors expressed their satisfaction with the evaluation process.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in sub-section 6 of Section 149 of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI LODR.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available at the link https://www.mahindralifespaces.com/ investors/disclosures-under-sebi
The following policies of the Company are attached herewith and marked as Annexure 3, Annexure 4 and Annexure 5:
1. Policy on appointment of Directors and Senior Management (Annexure 3)
2. Policy on Remuneration of Directors (Annexure 4) and
3. Policy on Remuneration of Key Managerial Personnel and Employees (Annexure 5)
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 (KMP)
The Company has following persons as Key Managerial Personnel under the Companies Act, 2013:
Sr. No. |
Name of the Person |
Designation |
1 |
Ms. Anita Arjundas |
Managing Director & CEO |
2 |
Mr. Suhas Kulkarni |
Company Secretary |
3 |
Mr. Jayantt Manmadkar |
Chief Financial Officer |
During the year under review, there was no change in the KMP of the Company.
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, Secretarial Standards - 1 (SS-1) issued by the Institute of Company Secretaries of India and SEBI LODR.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) 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;
(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 31st March, 2017 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 are 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 statements. The Audit Committee of the Board reviews the internal control systems, the adequacy of internal audit function and significant internal audit findings with the management, Internal Auditors and Statutory Auditors.
AUDIT COMMITTEE
The Audit Committee of the Company as on 31st March, 2017 comprised of three independent Directors, namely Mr. Sanjiv Kapoor, Mr. Shailesh Haribhakti, Dr. Prakash Hebalkar and one Non-Executive Non-Independent Director, Dr. Anish Shah. Mr. Sanjiv Kapoor is the Chairman of the Committee.
All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman of the Company, 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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to report genuine concerns in the prescribed manner to freely communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Companyâs Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimization of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell consisting of Head - Legal & Secretarial, Chief Financial Officer and Chief Ethics Officer (Head-Human Resources). During the year, no such incidence was reported and no person was denied access to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web link https:// www.mahindralifespaces.com/media/1318/whistle-blower- policy.pdf
RISK MANAGEMENT
The Company has in place a process to inform the Board about the risk assessment and minimization procedures. It has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Presently, Regulation 21 of the SEBI LODR with respect to Risk Management Committee is not applicable to your Company. However, the Company has constituted a âRisk Management Committeeâ consisting of Mr. Shailesh Haribhakti, Non-Executive Independent Director and Ms. Anita Arjundas, Managing Director & CEO of the Company, and the Chief Financial Officer, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. The Board reviews implementation and monitoring of the risk management plan for the Company including identification of risks, if any, which in the opinion of the Board may threaten the existence of the Company.
AUDITORS
The Shareholders of the Company at the 17th Annual General Meeting of the Company held on 28th July, 2016, had appointed M/s. B. K. Khare & Co., Chartered Accountants, Mumbai (Registration Number- 105102W), as Statutory Auditors of the Company to hold office from the conclusion of the 17th Annual General Meeting until the conclusion of the 18th Annual General Meeting to conduct the audit of the Accounts of the Company.
Under section 139(2) of the Companies Act, 2013 and Rules framed there under, it is mandatory to rotate the Statutory Auditors on completion of term including the transition period permitted under the said section.
M/s. B. K. Khare & Co., Chartered Accountants have held office as Statutory Auditor of the Company from the conclusion of the 3rd AGM i.e. from 25th September, 2002. Pursuant to section 139(2) of the Companies Act, 2013 read with Rules framed there under, M/s.
B. K. Khare & Co., Chartered Accountants have completed a period of more than 10 years on the commencement of the Companies Act, 2013 and have completed the transition period of 3 years from the date of commencement of the Companies Act, 2013.
In terms of said section, M/s. B. K. Khare & Co will be holding the office of Statutory Auditors up to the conclusion of the forthcoming 18th Annual General Meeting.
Accordingly, the Board of Directors, based on the recommendation of Audit Committee and subject to approval of the Shareholders at the ensuing 18th Annual General Meeting, has proposed to appoint M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (ICAI Registration Number -117366W/W-100018) as Statutory Auditors of the Company for a term of 5 consecutive years from the conclusion of the 18th Annual General Meeting till the conclusion of the 23rd Annual General Meeting to be held in the calendar year 2022 (subject to ratification of their appointment at every AGM), to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.
The Company has also received a written consent and a certificate from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, to the effect that their appointment if made, would be in accordance with the provision of Section 139 and that they satisfy the criteria provided in section 141 of the Companies Act, 2013 read with Rules framed there under.
The Board places on record its appreciation for the services rendered by M/s. B. K. Khare & Co, Chartered Accountants, during their tenure as the Statutory Auditors of the Company.
The notes of the financial statements referred to in the Auditorsâ Report issued by M/s. B. K. Khare & Co for the financial year ended on 31st March, 2017 are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
The Board of Directors, on recommendation of the Audit Committee, has appointed CMA Vaibhav Prabhakar Joshi, Practicing Cost Accountant, Mumbai, as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2016-17. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, a resolution seeking Shareholdersâ ratification for the remuneration payable to CMA Vaibhav Prabhakar Joshi, Practicing Cost Accountant is included in the Notice convening the Annual General Meeting.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Board has appointed M/s. Martinho Ferrao & Associates, Practicing Company Secretaries, to conduct the secretarial audit of the Company for the financial year(s) commencing on and from 1st April, 2014. The Secretarial Audit report for the financial year ended 31st March, 2017, is annexed herewith and marked as Annexure 6 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 the 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.45.
Particulars of investment made under Section 186 of the Companies Act, 2013 are provided in the standalone financial statement at Note no. 7.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions entered into during the year were in the Ordinary Course of Business and on armsâ length basis. During the year under review, your Company had entered into Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 marked as Annexure 7 to this Report.
The Policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link https:// www.mahindralifespaces.com/media/1322/policy-on-materiality-of-and-dealing-with-related-party-transactions.pdf
The Directors draw attention of the members to Note no. 36 to the standalone financial statement which sets out related party disclosures.
DEPOSITS, LOANS AND ADVANCES
The 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 Regulation 34(3) and 53 (f) read with Schedule V of the SEBI LODR with the Company, is annexed herewith and marked as Annexure 8 to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information 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 is given in the Annexure 9 to this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures with respect to the remuneration of Directors, KMPs and employees as required under 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 given in Annexure 10 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company 21 days before the Annual General Meeting during working hours and shall be made available to any shareholder on request. Such details are also available on your Companyâs website at: https://www. mahindralifespaces.com/investors/disclosures-under-sebi
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 11 and forms part of this Report.
GENERAL
No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
During the year under review, no revision was made in the previous financial statement of the Company.
During the year ended on 31st March, 2017, there were no cases filed / reported pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operation in future.
CAUTIONARY STATEMENT:
Certain statements in the Directorsâ Report describing the Companyâs 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 Companyâs operations include labour and material availability, and prices, cyclical demand and pricing in the Companyâs principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.
DISCLAIMER
The Company is currently in the process of registering its ongoing projects in the applicable jurisdictions / States under the Real Estate (Regulation and Development) Act, 2016 (âRERAâ) and wherever the Rules under RERA have been notified by the respective States in which company has projects. Till such time, the projects that are required to be registered under RERA are registered, none of the images, material, projections, details, descriptions and other information that are mentioned in the Annual Report for the year 2016-17, should be deemed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer, invitation to acquire, including within the purview of the RERA.
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
DIN:00010029
Place: Mumbai
Date: 16th May, 2017
Mar 31, 2016
The Directors present their seventeenth report together with the audited financial statement of your Company for the year ended
on 31st March, 2016.
FINANCIAL HIGHLIGHTS (STAND-ALONE)
(Rs, in lakh)
2016 2015
Income from Operations 50,297 62,401
Other Income 9,718 13,602
Total Income 60,015 76,003
Profit Before Depreciation, Finance
cost and Taxation 16,847 36,227
Less : Depreciation 414 274
Profit Before Finance cost and
Taxation 16,433 35,953
Less : Finance Cost 2,259 2,182
Profit Before Taxation 14,174 33,771
Less : Provision for Taxation
Current Tax 3,674 10,134
Deferred Tax (including MAT Credit) 51 307
Profit After Tax 10,449 23,330
Add : Balance of Profit for
earlier years 48,900 36,519
Amount available for appropriation 59,349 59,849
Proposed Dividend on Equity Shares
(including tax on distributed
Profits) 2,799 2,972
Interim Dividend on Equity Shares
(including tax on distributed
Profits) - 2,503
Depreciation adjustment (Net of
Deferred Tax Adj.) - 6
Less : Transfer to General Reserve - 2,333
Less: Transfer to Debenture
Redemption Reserve 3,135 3,135
Balance carried forward 53,415 48,900
DIVIDEND
For the Financial Year 2015-16, your Directors have recommended a Dividend of Rs, 6 per equity share of the face value of Rs,10
each of the Company, i.e. 60 per cent.
The equity dividend (including tax on distributed Profits) aggregates Rs, 2,799 lakh (previous year Rs, 5,475 lakh, aggregate of
Special Dividend by way of an Interim Dividend and Final Dividend). The Dividend shall be paid out of the Profits of the current
year.
RESERVES
Out of the Profits available for appropriation, an amount of Rs, 3,135 lakh has been transferred to the Debenture Redemption
Reserve and the balance has been carried forward to the Profit & Loss Account.
OPERATIONS / STATE OF THE COMPANY''S AFFAIRS
In a subdued global economic environment, and the ongoing slowdown in China, India''s macroeconomic performance remained stable
during financial year 2015-16. According to the advance estimates released by the Central Statistical Organization (CSO), India''s
GDP growth is expected to be 7.6 per cent in financial year 2015-16, marginally higher than 7.2 per cent recorded in the previous
year.
An equally important aspect was the stability in retail inflation around 5 per cent mark, which allowed the RBI to continue with
its accommodative policy stance. However, the rate cuts to the tune of 100 basis points during the year did not translate into
desired reduction in lending rates. Consequently, the improvements in business and consumer confidence during the year were weak.
As far as the real estate industry is concerned, the overall performance continued to be subdued â housing prices, rents and off
take of housing loans continued to be sluggish during the year.
The Company''s performance needs to be evaluated in the context of this Industry Environment.
In the residential segment, the Company sold over 1,000 residential units aggregating to 1.16 million square feet of saleable
area in 2015-16 across its ongoing and newly launched projects, including projects of its subsidiary companies. The Company
launched two new projects â ''Vivante'' and ''Wind chimes'', marking its entry in the Bangalore market with the latter. In addition,
fresh inventory in four of its existing projects was also launched during the year.
In the large format developments, the Company''s subsidiary Mahindra World City Developers Limited (MWCDL) signed a JV Agreement
with Sumitomo Corporation, Japan to develop an industrial park in North Chennai on the NH-5 (Chennai â Kolkata highway). The
first phase of the project of approximately 300 acres will be implemented by Mahindra Industrial Park Chennai Limited (MIPCL), a
60:40 JV between MWCDL and Sumitomo Corporation, respectively.
The consolidated total income of your Company decreased from Rs, 114,757 lakhss in 2014-15 to Rs, 87,743 in 2015-16. The
consolidated Profit before tax (PBT) stood at Rs,14,745 lakh in 2015-16 as compared to Rs,42,102 lakhs in 2014-15, whereas the
consolidated Profit after tax and minority interest (PAT) was Rs, 9,309 lakhs in 2015-16 as compared to Rs,26,620 lakhs during
2014-15. This Performance of the Company over the previous year needs to be looked in the context of the land sale transaction in
respect of a delayed project in Mumbai, which contributed Rs,268 crore to the total income and Rs,245 crore to the Profit before
tax (PBT) during 2014-15.
Total income of your Company as a standalone entity was Rs, 60,015 Lakh as compared to Rs,76,003 lakh in 2014-15. PBT was
Rs,14,174 as compared to Rs,33,771 lakhs in 2014- 15, whereas PAT was Rs, 10,449 as compared to Rs, 23,330 lakhs in 2014-15.
Total income includes dividend income of Rs,629 Lakhs and Rs,178 Lakhs received from its subsidiaries Mahindra World City
(Jaipur) Limited and Mahindra World City Developers Limited, respectively, as compared to 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 in 2014-15.
No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the
financial position of the Company.
AWARDS AND RECOGNITION
The Company and its subsidiaries received several awards and recognitions during 2015-16. Some of the prestigious awards are:
- Mahindra Life spaces rated as one of the Top 5 Great Places to Work in the real estate industry by the Great Places to Work
Institute;
- Mahindra Life spaces won the Mint-Institute for Competitiveness - ''Strategy Award'' in the Construction, Real Estate and Steel
Segment ;
- Mahindra Life spaces has been ranked Regional Sector Leader for Listed -Asia - Industrial category by Global Real Estate
Sustainability Benchmark (GRESB) Survey, 2015 for second year in a row;
- Mahindra Life spaces won the "Investor Relations Society Awards 2015" for Best Environment, Social & Governance (ESG)
Disclosures in Small Cap category;
- Mahindra Life spaces bagged the runner up trophy for Best Safety Practices Competition 2015 in the Construction Category which
was jointly organized by National Safety Council -Maharashtra Chapter & Directorate of Industrial Safety and Health, Government
of Maharashtra;
- Splendour by Mahindra Life spaces rated "Platinum" on completion by the Indian Green Building Council (IGBC);
- Mahindra Life spaces won the "Best Developer - Residential Project" award for Splendour at the ACETECH Alpha Awards 2015;
- Luminare by Mahindra Life spaces was conferred with the "CIDC Vishwakarma Award" for Construction, Health, Safety and
Environment;
- Iris Court by Mahindra Life spaces received the award for the ''Best Residential Project'' in Chennai under the Affordable
Housing Segment at the 10th CNBC AWAAZ Real Estate Awards 2015-16;
- Mahindra World City Jaipur became the first project in Asia to receive Stage 2 Climate Positive Development certification from
C40 Cities Climate Leadership Group;
- Mahindra World City Chennai declared "Best Township" (more than 200 acres in size) at NDTV Parryware Property Awards 2015-16.
SHARE CAPITAL
During the year, the Company allotted 2,500 equity shares of Rs,10 each at an exercise price of Rs, 428 per share to the eligible
grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2006 (ESOS - 2006).
The Company has also allotted 18,450 equity shares of Rs,10 each at an exercise price of Rs, 10 per share to the eligible
grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2012 (ESOS - 2012).
Consequently, issued equity share capital has increased from Rs, 41,05,30,510 to Rs, 41,07,40,010 and the subscribed and paid up
equity share capital of the Company has increased from Rs, 41,01,22,000 to Rs, 41,03,31,500.
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 boned 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 Lakh Only) each for cash at par, aggregating Rs, 500
crore (Rupees Five Hundred Crore Only) vide Series I, Series II, and Series III on Private Placement basis. The proceeds of the
NCDs issue have been fully utilized for the purposes of the issue.
Series I of Secured Listed Rated Redeemable 10.78 per cent YTM, 1,250 Non-Convertible Debentures (NCDs) with a face value of Rs,
10,00,000 (Rupees Ten Lakh only) each aggregating ^ 125 crore (Rupees One Hundred Twenty-Five Crore Only) were redeemed on 4th
April, 2016 along with redemption premium.
EMPLOYEE STOCK OPTIONS SCHEME
As of 31st March, 2016, 2,500 Stock Options were exercised under Employee Stock Option Scheme - 2006 (ESOS - 2006)
and 18,450 Stock Options were exercised under Employee Stock Option Scheme â 2012 (ESOS â 2012).
In accordance with the Employee Stock Option Scheme (ESOSâ 2012), the Nomination and Remuneration Committee had on 30th April,
2015 and 28th January, 2016, approved grant of total 34,000 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.
The Information that the Company is required to disclose in relation to ESOS-2006 and ESOS-2012 under the Securities Exchange
Board of India (Share Based Employee Benefits) Regulations, 2014, is uploaded on the website of the Company at
http://www.mahindraLife spaces.com/investors/disclosures-sebi.
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 the Company.
The Existing Schemes, Employee Stock Option Scheme-2006 (ESOS â 2006) and Employee Stock Option Scheme-2012 (ESOS â 2012) are
implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the
"Regulations") and other applicable Regulations and Circulars in force from time to time.
HOLDING COMPANY
The promoters of the Company i.e. Mahindra & Mahindra Limited (M&M) hold 20,846,126 equity shares which represents 50.80 per cent
of the paid-up equity share capital of the Company. The Company continues to be a Subsidiary Company of M&M. All subsidiary
companies of the Company are consequently subsidiary companies 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 in Annexure A to the Consolidated Financial Statement and hence not repeated here for sake of
brevity. The policy, as modified on 28th January, 2016, for determining material subsidiaries is available on the Company''s
website at the link: http://www.mahindraLife spaces. com/media/newsevents_fle/policyford-4d82fc3b9f7733c.pdf
SUBSIDIARY COMPANIES
Mahindra World City (MWC), Chennai, is implemented by Mahindra World City Developers Limited (MWCDL), currently an 89:11 joint
venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. 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) â 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 2015-16, the
project had a total area of 1,524 acres. With greater stabilization in the business zone, the focus is now on 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
the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan
enterprise, respectively. Mahindra World City, Jaipur is being 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 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 96.30 per cent owned by the Company.
Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited
(MITL), and 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''.
Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between the Company and B.E. Billimoria & Co. Limited, one of
the leading construction companies in India, respectively. This company is developing a residential complex across approximately
25 acres at Multi-modal International Hub Airport at Nagpur (MIHAN).
The details of the current developments in each of these companies are given in the Management Discussion and Analysis Report.
Mahindra Infrastructure Developers Limited ("MIDL"), a wholly owned subsidiary of the 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"), is a wholly owned subsidiary of the Company, which was set up to undertake
large format development. 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 the Company will be developing an industrial park in
Maharashtra. The company is in the process of procuring the targeted land area.
Industrial Township (Maharashtra) Limited ("ITML"), a wholly owned subsidiary of the Company is exploring the possibility of
taking up real estate development.
Raigad Industrial & Business Park Limited ("RIBPL"), a wholly owned subsidiary of the Company is exploring the possibility of
taking up real estate development.
Anthurium Developers Limited ("ADL") a wholly owned subsidiary of the 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 the
Company is exploring the possibility of taking up the development of an industrial park in Gujarat.
Mahindra Industrial Park Chennai Limited was a wholly owned subsidiary of Mahindra World City Developers Limited. During the
financial year 2015-16, Mahindra World City Developers Limited entered into a Joint Venture Agreement with Sumitomo Corporation,
Japan to set up an Industrial Park in North Chennai (the NH-5 corridor) on approximately 300 acres. In terms of the Joint Venture
Agreement, Mahindra Industrial Park Chennai Limited which was a wholly owned subsidiary of Mahindra World City Developers Limited
is now a joint venture between Mahindra World City Developers Limited and Sumitomo Corporation in the ratio of 60:40
respectively. Accordingly, Mahindra Industrial Park Chennai Limited is a subsidiary of Mahindra World City Developers Limited and
consequently, a subsidiary of the Company.
Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance service for water and sewerage
facilities at Tirupur, India. During the year under review, Mahindra Infrastructure Developers Limited, a wholly owned subsidiary
of the Company acquired additional 48,999 equity shares in MWUL, as a result MWUL has become a 98.99% subsidiary of Mahindra
Infrastructure Developers Limited and consequently a subsidiary of the Company. Total consideration paid for 48,999 equity shares
was Rs 48,999. The difference between proportionate Net asset of MWUL as on the date of acquisition (27th July, 2015) and
purchase consideration so paid, of Rs, 2,364.10 lakhs, has been transferred to Capital Reserve in consolidated financial
statement.
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 the Company and SCM Real Estate (Singapore) Private Limited, is developing in
collaboration with a developer, and land owning companies, a group housing project "Luminare" at NCR on approximately 6.79 acres
and a residential project "Wind chimes" at Bangalore on approximately 5.85 acres. The company is exploring the possibility of
undertaking additional projects in residential development segment in India.
Mahindra Inframan Water Utilities Private Limited (MIWUPL) is a 50 percent joint venture company and is exploring the possibility
of undertaking suitable business propositions.
ASSOCIATE COMPANIES
Topical Developers Private Limited and Kismat Developers Private Limited, the associate companies of the Company are looking out
for appropriate business opportunities in the space of real estate development.
During the year, Mahindra Water Utilities Limited, which was a Joint Venture company, became a subsidiary of the Company. No
other company has become or 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 form part of this Annual
Report.
The financial statements of Subsidiaries, Associates and Joint Venture companies are not attached along with the financial
statements of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the
Company at we blink: http://www.mahindraLife spaces. com/investors/financial-information. 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 Para E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI LODR") 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 page 169 of the Annual
Report.
The Business Responsibility Reporting (BRR) as part of the Annual Report as required by Regulation 34 (2) (f) of SEBI LODR is not
applicable to your Company for the financial year ended on 31st March, 2016.
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. The Company, in every financial year, in line with the new 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 Mr. Arun Nanda â Non Executive Non- Independent
Director, Mr. Shailesh Haribhakti â Non Executive Independent Director and Ms. Anita Arjundas â Managing Director & CEO. 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. mahindraLife spaces.com/pdf/mldl%20csr%20policy-final-cln.pdf. The Company''s CSR
activities have traditionally focused on education, skill development, health, environment and promoting sustainable practices.
The objective of the 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 organization, to operate in an economically, socially and environmentally
responsible manner while recognizing the interests of all its stakeholders;
- Encourage employees to participate actively in the Company''s CSR and give back to the society in an organized manner through
the employee volunteering programme called Esops.
The Company''s commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the
Companies Act, 2013. The Company gives preference to the local area and area around it where it operates for spending the amounts
earmarked for CSR activities. Of the total budget of Rs, 377.26 lakh for FY 2015-16, the Company had earmarked an amount of Rs,
132.73 lakh towards contribution as corpus by the Company to support the establishment of a Centre of Excellence (CoE) for
Sustainable Habitats by TERI with the objective of improving energy efficiency in India''s residential buildings sector. The
discussion and requisite documentation with TERI, although was at an advanced stage, could not be completed by 31st March, 2016.
As a result, the amount of Rs, 132.73 lakh which was earmarked for aforesaid contribution remained unspent as on 31st March,
2016. The Board has approved that any unspent amount, out of the minimum required CSR expenditure of the FY 2015-16 be carried
forward to the next year provided that the carried forward amount shall be over and above the next year''s CSR allocation
equivalent to at least 2% of the average net Profit of the Company of the immediately preceding three years.
The annual report on the CSR activities in the prescribed format is at Annexure 1 to this Report.
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 page 169 of this Annual Report.
DIRECTORS
Pursuant to Section 152 of the Companies Act, 2013 and Article 116 read with 118 of the Article of Association of the Company,
Ms. Anita Arjundas (DIN: 00243215) a Executive Non-Independent Director retires by rotation at the 17th Annual General Meeting of
the Company and being eligible has offered herself for re-appointment.
Pursuant to Section 152, 160, 161 and all other applicable provisions of the Companies Act, 2013 and Article 128 of the Articles
of Association of the Company, Dr. Anish Shah (DIN : 02719429), a Non-executive and Non-independent Director who was appointed as
an Additional Director on 28th August, 2015, ceases to hold office as per the provisions of Section 161 of the Companies Act,
2013, at the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160 (1) of the
Companies Act, 2013 from a Member in writing proposing his candidature for the office of Director along with requisite deposit.
Brief resume of Ms. Anita Arjundas and Dr. Anish Shah, nature of their expertise in specific functional areas, names of companies
in which they hold directorships and memberships / chairmanships of Board Committees and shareholding as stipulated under
Regulation 36(3) of SEBI LODR, are provided in the Corporate Governance Report forming part of the Annual Report. None of the
Directors of the Company are inter-se related to each other.
Both the above Directors i.e. Ms. Anita Arjundas and Dr. Anish Shah 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 Part D of Schedule II of SEBI LODR, 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 Chairman 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. Structured
questionnaires, 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. were circulated to the Directors for the evaluation
process. The Directors expressed their satisfaction with the evaluation process.
The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of
Independence as provided in sub-section 6 of Section 149 of the Companies Act, 2013 and in Regulation 16(1) (b) of SEBI LODR.
The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available
at the link: http://www.mahindraLife spaces.com/media/ newsevents_fle/detailsofd-0f2f1bb18e3bb62.pdf
The following policies of the Company are attached herewith and marked as Annexure 2, Annexure 3 and Annexure 4;
1. Policy on appointment of Directors and Senior Management (Annexure 2)
2. Policy, as modified on 10th June, 2016, on Remuneration of Directors (Annexure 3) and
3. Policy, as modified on 10th June, 2016, on Remuneration of Key Managerial Personnel and Employees (Annexure 4)
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 (KMP)
The Company has 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
During the year under review, there was no change in the KMP of the Company.
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight 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, Secretarial Standards - 1 (SS-1) issued by ICSI and SEBI LODR.
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;
(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 31st
March, 2016 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 this Act 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 statements. The Audit Committee of
the Board reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of
internal audit function and significant internal audit findings.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company as on 31st March, 2016 comprised of three independent Directors, namely Mr. Sanjiv Kapoor, Mr.
Shailesh Haribhakti, Dr. Prakash Hebalkar and one Non-Executive Non-Independent Director, Dr. Anish Shah. Mr. Sanjiv Kapoor is
the Chairman of the Committee.
During the year, Mr. Anil Harish, Non-executive Independent Director resigned from the Board of the Company and consequently
ceased to be a member of the Audit Committee effective 16th June, 2015. Mr. Uday Phadke, Non-executive Non-Independent Director
retired by rotation at the 16th Annual General Meeting and consequently ceased to be a member of the Audit Committee effective
31st July, 2015. The Board at its Meeting held on 28th August, 2015 appointed Dr. Prakash Hebalkar Non-executive Independent
Director and Dr. Anish Shah Non-executive Non-Independent Director, as members of the Audit Committee.
All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman of the Company,
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 Chairman of the Audit Committee. The significant audit observations and corrective actions as may be
required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the
Audit Committee from time to time.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
In terms of provisions of Regulation 22 read with Regulation 4(2)(d)(iv) of SEBI LODR and sub-section 9 of section 177 of
Companies Act, 2013, the Company has modified its Whistle Blower Policy w.e.f. 28th January, 2016. The Policy is for
stakeholders including directors and employees of the Company and their representative bodies to freely communicate their
concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the
Company''s Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against
victimisation of employees and Directors. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or
Chairman of the Company or the Corporate Governance Cell consisting of Head - Legal & Secretarial, Chief Financial Officer and
Chief Ethics Officer (Head-Human Resources). During the year, no such incidence was reported and no personnel were denied access
to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The modified
Whistle Blower Policy of the Company is available at web link: http://www.mahindraLife spaces.com/media/ news events_
file/whistleblo-9e83538439d221f.pdf
RISK MANAGEMENT
The Company already has in place the process to inform the Board about the risk assessment and minimization procedures. The
Company has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them,
and mechanisms for their proper and timely monitoring and reporting. Presently, Regulation 21 of the SEBI LODR w.r.t. Risk
Management Committee is not applicable to your Company. However, the Company has constituted a "Risk Management Committee"
consisting of Mr. Shailesh Haribhakti, Non-Executive Independent Director and Ms. Anita Arjundas, MD & CEO of the Company and the
Chief Financial Officer, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to
time. The Board 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 (Registration Number- 105102W), retire as Auditors at the 17th 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. from the conclusion of the ensuing Annual General Meeting up to the conclusion of the 18th 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 for approval re- appointment of M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, as the
Statutory 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, disclaimer or adverse remark.
COST AUDITOR
The Board of Directors, on recommendation of the Audit Committee and subject to approval of the members on the remuneration to be
paid to the Cost Auditor, has appointed CMA Vaibhav Prabhakar Joshi, Practicing Cost Accountant, Mumbai, as Cost Auditor of the
Company, for the Financial Year 2015-16, 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.
SECRETARIAL AUDITOR
The Board has appointed M/s. Martinho Ferrao & Associates, practicing Company Secretaries, to conduct the secretarial audit of
the Company for the financial year(s) commencing on and from 1st April, 2014. The Secretarial Audit report for the financial year
ended on 31st March, 2016 is annexed herewith and marked as Annexure 5 to this Report. The Secretarial Audit Report does not
contain any qualification, reservation, disclaimer or adverse remark.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
As the 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 its Note no. 12.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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 / transactions 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.mahindraLife spaces.com/media/news events _file/
policyonma-20883dd2bb48c0f.pdf
The Directors draw attention of the members to Note 39 to the standalone financial statement which sets out related party
disclosures.
DEPOSITS, LOANS AND ADVANCES
The 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 Regulation 34(3) and 53 (f) read
with Schedule V of the SEBI LODR 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.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The Company had 15 employees who were in receipt of remuneration of not less than Rs, 60,00,000 during the year ended 31st March,
2016 or not less than Rs, 5,00,000 per month during any part of the year. Disclosures with respect to the remuneration of
Directors, KMPs and employees as required under section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure 8 to this Report.
Details of employee remuneration as required under provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) &
5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of
the Company 21 days before the Annual General Meeting, during the working hours and shall be made available to any Shareholder on
request. Such details are also available on the Company''s website at: http://www.mahindraLife spaces.com/
investors/disclosures-sebi. None of the employees listed in the aforesaid details is a relative of any Director of the Company.
None of the employees of the Company, employed throughout the financial year or part thereof, was in receipt of remuneration in
the year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the
Managing Director and holds by himself / herself or along with his/her spouse and dependent children, 2 % or more of the equity
shares of the Company.
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.
REGISTRAR AND SHARE TRANSFER AGENT
The Securities Exchange Board of India (SEBI) had vide its Ex- Parte Ad Interim Order No. WTM/RKA/MIRSD2/41/2016 dated 22nd
March, 2016 (SEBI Order) directed clients of Sharepro Services (India) Private Limited (Sharepro) to audit the records and
systems of Sharepro with respect to dividend paid and transfer of securities to determine whether dividends have been paid to
actual / beneficial holders and whether securities have been transferred as per provisions of law during last least 10 years.
SEBI had also advised all the companies who are / were clients of Sharepro to carry out / switchover their activities related to
a registrar to an issue and share transfer agent, either in-house or through another registrar to an issue and share transfer
agent registered with SEBI.
Pursuant to the above order and pursuant to Regulation 30 of SEBI LODR, the Company on 10th June, 2016 has:
1. The Company has appointed Ernst & Young LLP to conduct audit as required in the SEBI order;
2. Issued a notice to Sharepro Services (India) Private Limited (Sharepro), Registrar & Share Transfer Agent (R&T Agent) of the
Company, to terminate the Memorandum of Understanding, effective from close of business hours on 17th June, 2016;
3. Decided to appoint Karvy Computershare Private Limited (Karvy) having its Corporate office at Karvy Selenium, Tower- B, Plot
No 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad â 500032 and Investor Relation Centre at 24 B, Rajabahadur
Mansion, Ground Floor, Ambalal Doshi Marg, Fort, Mumbai - 400 023, as the new Registrar and Share Transfer Agent of the Company
in place of Sharepro with effect from 18th June, 2016.
Sharepro will however continue to provide its support till such time the database is transferred to Karvy and the electronic
connectivity is established between Karvy and the Depositories. The Company is in process of making necessary arrangements in
order to ensure smooth transition from Sharepro to Karvy.
GENERAL
No fraud has been reported during the audit conducted by the Statutory Auditors, Internal Auditors, Secretarial Auditors and Cost
Auditors of the Company.
During the year under review, no revision was made in the previous financial statement of the Company.
During the year ended on 31st March, 2016, there were no cases fled / 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 the 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 Non-Executive
Independent Director
DIN: 00243215 DIN: 00007347
Mumbai, 10th June, 2016 Mumbai, 10th June, 2016
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) Â
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 Â 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 Â
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 Â 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 (ESOSÂ 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
Mar 31, 2012
The Directors present their Thirteenth report together with the
audited accounts of your Company for the year ended 31st March, 2012.
Financial
(Rs.in lakh)
2012 2011
Operating Income 46,895 47,656
Other Income 5,217 3,029
Total Income 52,112 50,685
Profit Before Depreciation,
Interest and Taxation 17,320 15,303
Less: Depreciation 268 250
Profit Before Interest and
Taxation 17,052 15,053
Less: Interest & Finance charges 297 116
Profit Before Taxation 16,755 14,937
Less : Provision for Taxation
Current Tax 4,859 4,728
Deferred Tax (including MAT Credit) (120) (96)
Profit After Tax 12,016 10,305
Add : Balance of Profit for
earlier years 21,654 14,866
Amount available for appropriation 33,670 25,171
Interim Dividend on Preference Shares
(including tax on distributed
profits) - 119
Proposed Dividend on Equity
Shares (including tax on distributed
profits) 2,848 2,374
Add : Excess Tax of previous year on
Dividend written back - (6)
Less : Transfer to General Reserve 1,202 1,030
Balance carried forward 29,620 21,654
Dividend
Your Directors have recommended a dividend of Rs 6 per equity share (60
per cent) of the face value Rs 10 of the Company for the year 2011-12.
The equity dividend (including tax on distributed profits) amounts to Rs
2,848 lakh (previous year Rs 2,374 lakh), and shall be paid out of
profits for the current year.
After staging a recovery from the recession with a 5.3 per cent growth
during the previous year, world output decelerated significantly in
2011 Ã growing at 3.9 per cent. Although the world economy is
unlikely to lapse into another recession, there are considerable risks:
another acute crisis in Europe, disruption of oil supplies and hard
landing in one or more large middle- income countries.
India also witnessed deceleration in growth, growing at 6.5 per cent in
2011 -12 as compared to 8.4 per cent during the previous year. With the
services sector continuing to grow strongly at 8.9 per cent during the
year, the decline was due to significant slowdown in both agriculture
and industry à which grew at much lower rates of 2.8 per cent and 3.4
per cent respectively. The construction sector, which is the second
largest segment of industry after manufacturing, was also affected Ã
recording a growth of 5.3 per cent during 2011-12 as compared to 8 per
cent during 2010-11.
Your Company is one of the few companies in the real estate
development industry in India with the experience of successfully
serving consumers as well as businesses through its two segments of
operations. Even as the real estate industry operated in a difficult
economic environment, the Company has reported creditable results for
2011-12.
Total income of your Company as a standalone entity was Rs 52,112 lakh
as compared to Rs 50,685 lakh in 2010-11. Profit before tax (PBT) was Rs
16,755 lakh as compared to Rs 14,937 lakh in 2010-11, whereas profit
after tax (PAT) was Rs 12,016 lakh as compared to Rs 10,305 lakh in
2010-11. During the year, the Company also received a dividend income
of Rs 555 lakh from its subsidiary Mahindra World City Developers
Limited.
The consolidated total income of your Company increased from T 62,702
lakh in 2010-11 to Rs 72,841 lakh in 2011-12. The consolidated PBT grew
by 9 per cent from Rs 17,205 lakh in 2010- 11 to Rs 18,806 lakh in
2011-12, whereas consolidated PAT after minority interest increased to
Rs 11,908 lakh from Rs 10,817 lakh during 2010-11.
In the residential segment, the Company launched new phases of three of
its existing projects in addition to the first phase of its fresh
launch in Nagpur. All new projects of the Company launched during the
year received an impressive response. During the year, the Company
along with its subsidiary companies sold 677 residential units across
its ongoing and newly launched projects. Your Company is currently
developing 3.63 million square feet of residential developments.
Besides, another 5.19 million square feet are available in the form of
new phases of ongoing projects or fresh 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 remained stable
in the Domestic Tariff Area (DTA) of both the Mahindra World Cities.
Mahindra World City, Jaipur in Rajasthan, saw a moderation in demand
during the year for space in the Special Economic Zone (SEZ). However,
with the launch of its DTA in the later part of the year, the situation
improved considerably and a significant uptick in off-take and
performance is expected in 2012-13. Mahindra World City (MWC), Chennai,
where most of the current developments are in the residential and
social infrastructure zone, entered the 10th year of its operation
during the year.
Awards and Recognition
Your Company received several awards and recognitions during 2011-12.
Some of the prestigious awards are:
- Voted as India's Top 10 Builders by Construction World and CW
Interiors
- Chloris at Faridabad: Platinum Rated Green Building after
construction under the CII-IGBC Green Homes Rating System. It is the
second project in India to achieve this distinction highest possible
rating (in the multi-dwelling units category)
- Iris Court-at MWC Chennai: -GBC Gold' pre-certification rating
- 'Aura', in Gurgaon: 'IGBC Gold' pre-certification rating
- New Project 'Antheia'at Pimpri, Pune: 'IGBC Gold' pre- certification
rating.
- 'Mahindra Splendour' at Mumbai: Second Best in 'Green Initiative in
Service Sector' category in KPMG Qimpro Convention 2011
- Skyline, the Mahindra World City's quarterly newsletter: Bronze award
in 'Best Newsletter Design at ABCI annual awards, 2011; Silver award in
'In-house Magazine English' category by PRCI 2012.
- Refresh, quarterly newsletter of your Company: Appreciation Award in
External Magazine category by PRCI 2012.
- Your Company's Corporate Brochure (Creating Sustainable Homes, Cities
& Happiness): Silver award in 'Corporate Brochure" category by PRCI
2012.
Capital
The paid up equity capital of the Company comprises 40,835,150 equity
shares of Rs 10 each aggregating Rs 408,351,500.
The allotment of 45,351 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 bonfire owner of the shares is
certified by the concerned Stock Exchange or The Special Court (Trial
of offenses relating to transactions in Securities).
Employee Stock Options Scheme
In accordance with the Employee Stock Option Scheme (ESOS - 2006), the
Remuneration Committee has on 25th April, 2008, approved grant of
678,359 Stock Options at an exercise price of Rs 428 per share. As of
31st March, 2012,26,000 Stock Options were exercised. 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 51.05 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) successfully implemented
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 470
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 146 acres to be developed in phases for
offering products in different formats and price bands. Mahindra
Residential Developers Limited (MRDL), which is a subsidiary of
Mahindra Integrated Township Limited (MITL), is jointly with a private
equity real estate fund, ARCH Capital Asian Partners, L.P. - managed by
ARCH Capital Management Company Limited, developing a gated residential
community in approximately 55 acres within Mahindra World City, New
Chennai under the name, 'Aqualily'. ARCH Capital is an affiliate of
Ayala Land, one of the most trusted real estate brands in Philippines.
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). MBDL launched the first phase of its project
'Bloomdale' during the year.
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, 2012 MWCJL was in possession of 2,678
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. 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 Profit & Loss Account, Schedules to Accounts 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 Profit & Loss Account, Schedules to Accounts 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, 2012.
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 CCSR)
As a part of the Mahindra Group, 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.
Directors
Ms. Anita Arjundas and Mr. Anil Harish 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, 2012 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 The Company had 5 (five)
employees who were in receipt of remuneration of not less than Rs
6,000,000 during the year ended 31st March, 2012 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, 27th April, 2012
Mar 31, 2011
The Directors present their Twelfth report together with the audited
accounts of your Company for the year ended 31st March, 2011.
Financial Highlights
(Rs. in lakh)
2011 2010
Operating Income 47,656 32,065
Other Income 3,029 2,899
Total Income 50,685 34,964
Profit Before Depreciation, Interest and Taxation 15,303 10,981
Less : Depreciation 250 231
Profit Before Interest and Taxation 15,053 10,750
Less : Interest & Finance charges 116 -
Profit Before Taxation 14,937 10,750
Less : Provision for Taxation
Current Tax 4,728 2,991
Deferred Tax (including MAT Credit) (96) (179)
Profit After Tax 10,305 7,938
Add : Balance of Profit for earlier years 14,866 9,516
Amount available for appropriation 25,171 17,454
Interim Dividend on Preference Shares
(including tax on distributed profits) 119 -
Proposed Dividend on Preference Shares
(including tax on distributed profits) - 123
Proposed Dividend on Equity Shares
(including tax on distributed profits) 2,374 1,671
Add : Excess Tax of previous year on Dividend
written back (6) -
Less : Transfer to General Reserve 1,030 794
Balance carried forward 21,654 14,866
Dividend
Your Directors have recommended a dividend of Rs. 5 per equity share
(50 per cent) of the face value Rs.10 of the Company for the year
2010-11.
The equity dividend (including tax on distributed profits) amounts to
Rs. 2,374 lakh (previous year Rs. 1,671 lakh), and shall be paid out of
profits for the current year.
An interim dividend on 10,00,000 - 10.50 per cent Non-Cumulative
Redeemable Preference shares of Rs. 100 each was declared on 18th
March, 2011. Your Directors have recommended that the interim dividend
paid on Preference shares be treated as final dividend.
Operations
The global economy gathered strength during the year, with significant
improvements in output, trade and capital flows and business and
consumer sentiment. World output grew at 5 per cent during 2010, after
contracting by 0.5 per cent during 2009. The Indian economy, too, grew
at an impressive rate. According to the latest estimates released by
the Central Statistical Organisation (CSO), Indias GDP grew at 8.5 per
cent in 2010-11, up from 8 per cent during the previous year. All
sectors contributed to this performance. Industry and services grew at
9.4 per cent and 7.9 per cent respectively during 2010-11. The
performance of
the construction sector, which is the second largest segment of
industry after manufacturing, also improved during the year à recording
a growth of 8.1 per cent during 2010-11 as compared to 7 per cent
during 2009-10.
Driven by this strong economic performance, demand for both residential
units and industrial land increased during 2010-11. In the residential
segment, most markets witnessed significant growth in demand and
firming-up of prices. Although muted in comparison, the demand from
businesses for building capacities and expanding operations, which had
started gathering momentum towards the end of the previous year, also
increased at a satisfactory pace during 2010-11. Your Company has
benefited from the strategy of focusing on these two key segments of
operations.
In the residential segment, the focus will be on offering new products
in the premium and mid-market segments, which will be complemented by
enhancing the Companys presence by moving to new towns and cities.
During the year under review, the residential segment continued to
drive the Companys performance. The Company completed two of its
projects: ÃMahindra Chloris in Faridabad in the National Capital
Region (NCR) and Phase III of ÃMahindra Royale in Pimpri, Pune. The
handing over process of these projects has been initiated Your Company
successfully launched new phases of ÃMahindra Eminente in Mumbai and
ÃMahindra Aura in NCR. In addition, the
Company also launched a new project at Mahindra World City, New
Chennai, viz.; ÃIris Court through its subsidiary company, Mahindra
Integrated Township Limited.
In the integrated development space, your Company will strive to
maintain its pioneer and innovator status with new concepts and
flexible formats. Both operational projects of your Company witnessed
significant increase in activity during this period. Mahindra World
City, Jaipur and Chennai, have both concluded many lease agreements
with customers during this period. Besides, many customers have
started development and construction work in their leased land.
Mahindra World City (Jaipur) Limited (MWCJL), a subsidiary of your
Company received formal approval for two more Special Economic Zones
(SEZs), namely Gems and Jewellery and IT/ ITeS during the year. MWCJL
also received environmental clearance for three SEZs, namely IT/ITeS,
Light Engineering and Handicrafts. In the future, MWCJL has plans to
expand the coverage of the project to include other segments such as
Apparel and Logistics. Employment at Mahindra World City, Jaipur,
touched 2,800 with a total investment of more than Rs. 890 crore by the
Company and its customers. Three of the 39 customers at Mahindra World
City, Jaipur are operational and other 11 customers have commenced
construction.
At Mahindra World City, Chennai, employment by operational customers
increased from 18,000 to 23,000 people. Exports also increased
significantly during the year to Rs.3,500 crore from Rs.2,300 crore in
the previous year. Buoyed by interest from prospective customers, the
Company is looking to expand the project by another 100 acres, for
which almost all of the land is already in place and certain approvals
are awaited. The expansion will be in the Domestic Tariff Area, with
focus on manufacturing companies catering to the Indian market. There
has been strong interest from leading multi-national companies to
take-up this additional space. Mahindra World City Developers Limited
(MWCDL), a subsidiary of your Company has already signed MoUs with
multi-national companies from Japan, US and Ireland in the auto
ancillary sector for around 50 per cent of the proposed expansion area.
Apart from the current two World Cities, the Company is in various
stages of planning and land acquisition for other large format projects
in Tamil Nadu and Maharashtra. During the year, your Company also
entered into two MoUs with the Government of Gujarat at the ÃVibrant
Gujarat Summit, marking its foray into the State. The first MoU is for
the development of a 3,000 acres integrated business city, along the
lines of the existing Mahindra World City format, at Dholera Special
Investment Region, located in the proposed Delhi Mumbai Industrial
Corridor. The second MoU is for the development of an industrial park
of around 500 acres close to Ahmedabad.
Today, your Company is one of the few companies in the real estate
development industry in India with the experience of successfully
serving consumers as well as businesses through its two segments of
operations. With a buoyant residential market and an improved
investment climate in the integrated development space, the Company
reported excellent results for 2010-11.
Total income of your Company as a standalone entity was Rs.50,685 lakh
in 2010-11 as compared to Rs. 34,964 lakh in 2009-10. Profit before tax
(PBT) was Rs.14,937 lakh in 2010-11 as compared to Rs. 10,750 lakh in
2009-10, whereas profit after tax (PAT) was Rs.10,305 lakh as compared
to Rs. 7,938 lakh in 2009-10.
The consolidated total income of your Company increased from Rs. 43,995
lakh in 2009-10 to Rs.62,702 lakh in 2010-11. The consolidated PBT grew
by 45 per cent from Rs. 11,888 lakh in 2009-10 to Rs.17,205 lakh in
2010-11, whereas consolidated PAT after minority interest increased to
Rs.10,817 lakh from Rs. 7,849 lakh during 2009-10. During the year, the
Company also received a dividend income of Rs.489 lakh from its
subsidiary Mahindra World City Developers Limited and Rs.188 lakh from
Mahindra World City (Jaipur) Limited.
Demand from Maharashtra State Electricity Distribution Co. Ltd.
(MSEDCL)
During 2008-09, MSEDCL had raised an assessment bill for Rs.2164 lakh
on the Company pertaining to a commercial complex at Pune. The Company
has filed an appeal before Adjudicating Officer at Mumbai for quashing
the said demand.
Demand from Income Tax Department
In respect of certain business incomes re-classified by the Income Tax
Department as income from house property and other disallowances, the
Company has succeeded at the Appellate Tribunal for some assessment
years and is pursuing the matter further with the Appellate authorities
for other years. The liability net of Deferred Tax Asset/Liability
would be Rs. 743.34 lakh (previous year Rs.891.19 lakh) in the event
that the demand from the Income Tax Department is held valid.
Awards and Recognition
Your Company received several awards and recognitions during 2010 -11.
Some of the prestigious awards are:
- Selected as Indias Top 10 Builders in August, 2010 in Construction
World Architect and Builder Awards 2010.
- Vervian and Veronica wings of project Eminente at Mumbai was
awarded The Economic Times ACETECH 2010 Real Estate Award, in the
category ÃExcellence in Mid Segment (Exterior Architectural Design).
- Refresh, the Mahindra Lifespaces newsletter won Gold Award from
the Association of Business Communicators of India (ABCI) in the
ÃNewsletter Design. The Company is recipient of award in this category
for the 5th time in a row. The brochure for Companys project
ÃAqualily also won the ÃSilver Award for its design.
- Realty Plus, a leading monthly real estate magazine, adjudged
Mahindra World City, New Chennai, as the winner of the ÃBest Integrated
Township of the Year award in February, 2011.
Capital
The paid up equity capital of the Company comprises 4,08,35,150 equity
shares of Rs.10 each aggregating Rs. 40,83,51,500. During the year
consequent upon exercise of Stock Options
26,000 equity shares were issued and allotted by the Company which
increased the paid up equity capital from Rs. 40,80,91,500 to Rs.
40,83,51,500.
On 22nd March, 2011, the Company, in accordance with the terms of the
issue, redeemed Preference Share Capital comprising of 10,00,000 Ã
10.50 per cent Non-Cumulative Redeemable Preference shares of Rs.100
each aggregating Rs. 10,00,00,000.
The allotment of 45,351 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).
Employee Stock Options Scheme
In accordance with the Employee Stock Option Scheme (ESOS Ã 2006), the
Remuneration Committee has on 25th April, 2008, approved grant of
6,78,359 Stock Options at an exercise price of Rs.428 per share. As of
31st March, 2011, 26,000 Stock Options were exercised. 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 2,08,46,126 equity shares which represents 51.05 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) successfully implemented
Indias first integrated business city & corporate Indias 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 is also engaged in planning and
land procurement for the second Mahindra World City in Tamil Nadu over
1,000 acres.
Mahindra Integrated Township Limited (MITL) is engaged as a
co-developer in developing the residential township area at Mahindra
World City with ÃIris Court being its first project spread over 18
acres. MITL has a balance of 146 acres to be developed in phases for
offering products in different formats and price bands.
Mahindra Residential Developers Limited (MRDL), which is a subsidiary
of Mahindra Integrated Township Limited (MITL) is jointly with a
private equity real estate fund, ARCH Capital Asian Partners, L.P. -
managed by ARCH Capital Management Company Limited, developing a gated
residential community in approximately 55 acres within Mahindra World
City, New Chennai
under the name, "Aqualily". ARCH Capital is an affiliate of Ayala Land,
one of the most trusted real estate brands in Philippines.
Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture
between the Company and B. E. Billimoria & Co. Limited, one of the
leading construction companies in India. This Company will develop a
residential complex across ~25 acres at Multi-modal International Hub
Airport at Nagpur (MIHAN). MBDL has finalised the master plan and unit
plans which are being submitted to Maharashtra Airport Development
Company (MADC) for approvals.
Mahindra World City (Jaipur) Limited (MWCJL) is developing an
integrated business city near Jaipur spread over approximately 3,000
acres of land of which approximately 2,500 acres will be a
multi-product SEZ and 500 acres will be a Domestic Tariff Area. At
present MWCJL is in possession of 2,636 acres of land, and the
procurement of the balance area is in process. Currently, MWCJL has
received notifications for three SEZs, namely IT/ITeS, Light
Engineering (including Automotive and Auto Components) and Handicrafts
and formal approval for two more SEZs, namely Gems and Jewellery (25
acres) and IT/ITeS (86 acres). MWCJL has received Environmental
Clearance in respect of three SEZs, namely IT/ITeS, Light Engineering
and Handicraft comprising around 892 acres of land area and
Environmental Clearance for the balance area is under process.
Mahindra World City (Maharashtra) Limited (MWCML) was set up to
undertake development of a multi-product SEZ at Karla, near Pune in
collaboration with Maharashtra Industrial Development Corporation
(MIDC). MIDC has regretted its inability to acquire the land required
for setting up the project and has suggested that MWCML examine the
possibility of a joint venture project with MIDC elsewhere in
Maharashtra.
The statement pursuant to Section 212 of the Companies Act, 1956,
containing details of the Companys 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. 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 Profit & Loss Account, Schedules to Accounts 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 Profit & Loss Account, Schedules to Accounts 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, 2011.
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 is annexed to this Report.
Sustainable Development and Corporate Social Responsibility (CSR)
As a part of the Mahindra Group, your Company is committed to the
principles of sustainable development and consistently carries out
initiatives in the area of corporate social responsibility 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.
Directors
Mr. Arun Nanda, Mr. Shailesh Haribhakti and Dr. Prakash Hebalkar 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, 2011 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(1B) 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 1 (one) employee who was in receipt of remuneration of
not less than Rs. 60,00,000 during the year ended 31st March, 2011 or
not less than Rs. 5,00,000 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, associates and auditors 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, 23rd April, 2011
Mar 31, 2010
The Directors present their Eleventh report together with the audited
accounts of your Company for the year ended 31st March, 2010.
Financial Highlights
(Rs. in lakh)
2010 2009
Operating Income 32,065 16,540
Other Income 2,899 3,254
Total Income 34,964 19,794
Profit Before Depreciation,
Interest and Taxation 10,981 5,097
Less : Depreciation 231 (686)
Profit Before Interest and Taxation 10,750 5,783
Less : Interest - 6
Profit Before Taxation 10,750 5,777
Less : Provision for Taxation
Current Tax 2,991 948
Deferred Tax (including MAT Credit) (179) 193
Profit for the year After Tax 7938 4,636
Less : Provision for tax for earlier year -
Profit After Tax 7938 4,636
Add : Balance of Profit for earlier years 9516 6,659
Amount available for appropriation 17,454 11,295
Less : Proposed Dividend (including tax
on distributed profits) 1,794 1,316
Less : Transfer to General Reserve 794 463
Less : Transfer to Capital
Redemption Reserve - -
Balance carried forward 14,866 9,516
Dividend
Your Directors have recommended a dividend of Rs.3.50 per equity share
of the face value Rs.10 of the Company for the year 2009-10. The
Directors have also recommended a dividend on 1,000,000 Ã 10.50 per
cent Non-Cumulative Redeemable Preference shares of Rs.100 each. The
total dividend payment (including tax on distributed profits) amounts
to Rs.1,794 lakh, (previous year Rs.1,316 lakh) and shall be paid out
of profits for the current year.
Operations
The global economic situation improved as the year progressed, however,
recovery in advanced countries continued to be very sluggish. In
contrast, the Indian economy performed better. According to the advance
estimates released by the Central Statistical Organisation(CSO),
IndiaÃs GDP is expected to grow at 7.4 per cent in 2009-10, up from 6.7
per cent during the previous year. While services continued to be the
engine of growth, the most significant development has been the rebound
in industry growth which was at 3.9 per cent in 2008-09 whereas it
recorded 9.3 per cent growth in 2009-10. Industry, which includes
manufacturing, construction, mining, electricity and other utilities,
was the most affected sector during recession.
During the year, as the economic recovery got underway, consumer
sentiment and therefore the demand for residential units picked up at a
significant pace. In comparison, the demand from businesses for
building capacities and expanding operations was sluggish and started
gathering momentum in the second half of 2009-10. Mahindra Lifespaces
recognises the importance of this structure of the real estate industry
and has consciously adopted a strategy which focuses on two key
segments of operations à residential development and large format
integrated infrastructure development such as business cities,
industrial parks and SEZs. Your Company benefited from this strategy
during 2009-10.
During the year under review, the residential segment led the CompanyÃs
performance. Your Company completed the handover of residential units
to customers in three of its projects à the second phase of ÃSylvan
Countyà at Mahindra World City, Chennai, the first two phases of
ÃMahindra Royaleà near Pimpri, Pune and the first phase of ÃMahindra
Eminenteà at Goregaon, Mumbai. Your Company also successfully launched
new phases of ÃMahindra Royaleà and ÃMahindra Eminenteà projects during
2009-10. In addition, the Company also launched two new projects during
the year à ÃMahindra Auraà at Gurgaon in the National Capital Region,
and ÃAqualilyà at Mahindra World City, Chennai. Aqualily is being
implemented by the Company through its subsidiary ÃMahindra Residential
Developers Limitedà (MRDL), which is a Joint Venture with Arch Capital,
an affiliate of Ayala Land, the largest and most trusted real estate
brand in Philippines.
In the integrated infrastructure development space, recovery was
delayed and the markets started to pick-up in the second half of the
year. Both operational projects of your Company witnessed significant
increase in activity during this period. In Mahindra World City,
Jaipur, the infrastructure development for the first phase of the IT
SEZ was completed during the year, whereas the infrastructure
development activities in Handicraft and Light Engineering SEZs are
expected to be completed during 2010-11. The Company entered into MoUs
with prospective clients and concluded many lease agreements during
this period.
At Mahindra World City, Chennai employment by companies operating
within, touched the 20,000 mark. Buoyed by interest from prospective
customers, the Company proposes to expand the project by another 100
acres and undertook land acquisition during the year, which is expected
to be completed during 2010-11.
Your Company is one of the few companies in the Indian real estate
industry with the experience of successful serving consumers as well as
businesses through its two segments of operations. The successful
execution of this strategic intent of the Company is the key reason
behind its success and consistent performance during these difficult
times. In the current economic environment, your Company reported
exceptional results for 2009-10.
Total income of your Company as a standalone entity was Rs.34,964 lakh
in 2009-10 as compared to Rs.19,794 lakh in 2008-09. Profit before tax
(PBT) was Rs.10,750 lakh in 2009- 10 as compared to Rs.5,777 lakh in
2008-09, whereas profit after tax (PAT) was Rs.7,938 lakh as compared
to Rs.4,636 lakh in 2008-09.
The consolidated total income of your Company increased from Rs.37,118
lakh in 2008-09 to Rs.43,995 lakh in 2009-10. The consolidated PBT
grew by 16 per cent from Rs.10,209 lakh in 2008-09 to Rs.11,888 lakh in
2009-10, whereas consolidated PAT after minority interest increased to
Rs.7,849 lakh from Rs.6,564 lakh during 2008-09. During the year, the
Company also received a dividend income of Rs.588 lakh from its
subsidiary Mahindra World City Developers Limited.
Demand from Maharashtra State Electricity Distribution Co. Ltd.
(MSEDCL)
During the year 2008-09, MSEDCL had raised an assessment bill for
Rs.2164 lakh on the Company pertaining to a commercial complex at Pune.
The Company has filed an appeal before Adjudicating Officer at Mumbai
for quashing the said demand.
Demand from Income Tax Department
In respect of certain business incomes re-classified by the Income Tax
Department as income from house property and other disallowances, the
Company has succeeded at the
Appellate Tribunal for some assessment years and is pursuing the matter
further with the Appellate authorities for other years. The liability
net of Deferred Tax Asset/Liability would be Rs.891.19 lakh (previous
year Rs. 1,012.69 lakh).
Awards and Recognition
Your Company received the following awards and recognitions in 2009-10:
- Aqualily with a ÃPre certified Gold ratingà by IGBC (Indian Green
Building Council)
- Mahindra Splendour awarded winner in the category of ÃBest Developer
à Green Future Developmentà by Cityscape Real Estate Awards, India
- Sylvan County awarded winner in the category of ÃIntegrated Township
of the Yearà by Accommodation Times, Mumbai
- Mahindra World City, Jaipur signed a Memorandum of Understanding
(MoU) on 14th May, 2009 with Clinton Climate Initiative, a foundation
promoted by Former US President Bill Clinton for sustainable
development and reduction of green house gas emission
- Mahindra Lifespaces received the OHSAS 18001:2006 certification
- Mahindra World City, Jaipur received the ISO 9001:2001 Certification
in February 2010.
- ÃRefreshÃ, the Mahindra Lifespaces newsletter won two prestigious
awards from the ÃAssociation of Business Communicators of India (ABCI)Ã
in the ÃNewsletter Designà and ÃPhoto Featureà categories. This award
has been conferred to the Company for the 4th time in a row. Refresh
also won the Silver award at the ÃCommunication Awardsà of PRCI (Public
Relations Council of India).
- The Mahindra World City, newsletter ÃSkylineà won an award in the
ÃHeadlineà category from the ÃAssociation of Business Communicators of
India (ABCI).
Capital
The paid up equity capital of the Company comprises of 40,809,150
equity shares of Rs.10 each aggregating Rs.408,091,500 and paid up
preference capital comprises of 1,000,000 Ã 10.50 per cent
Non-Cumulative Redeemable Preference shares of Rs.100 each aggregating
Rs. 100,000,000. The allotment of 45,351 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).
Employee Stock Options Scheme
In accordance with the Employee Stock Option Scheme, the Remuneration
Committee, on 25th April, 2008, approved grant of 678,359 Stock Options
at an exercise price of Rs.428 per share. 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)
holds 20,846,126 equity shares which represents 51.08 per cent of the
paid-up equity capital of the Company. M&M also holds 1,000,000 Ã 10.50
per cent non-cumulative redeemable preference shares of Rs.100 each,
which represent the entire paid-up preference capital of the Company.
Your Company continues to be a subsidiary company of Mahindra &
Mahindra Limited.
Subsidiary Companies
Mahindra World City Developers Limited (MWCDL) successfully implemented
IndiaÃs first integrated business city & corporate IndiaÃs first SEZ
near Chennai. The three sector- specific SEZs cater to the industry
sectors of IT (services and manufacturing), Apparel & Fashion
Accessories, and Auto Ancillaries and the Domestic Tariff Area caters
to a vide range of manufacturing segments. The total development stands
at 1550 acres.
Mahindra Integrated Township Limited (MITL) is engaged as a
co-developer in developing an integrated township at Mahindra World
City, Chennai.
A joint venture agreement for residential development was executed
between Mahindra Residential Developers Limited (MRDL), a subsidiary of
Mahindra Integrated Township Limited (MITL), and a private equity real
estate fund, ARCH Capital Asian Partners, L.P., managed by ARCH Capital
Management Company Limited, an affiliate of Ayala Land, the largest and
most trusted real estate brand in Philippines. The joint venture has
undertaken the development of a gated residential community together
with support facilities in approximately 55 acres within Mahindra World
City, New Chennai under the name, Aqualily.
Mahindra World City (Jaipur) Limited (MWCJL) is developing an
integrated business city near Jaipur spread over approximately 3000
acres of land of which approximately 2500 acres will be a multi product
SEZ and 500 acres will be a Domestic Tariff Area. During the year, the
Company signed MoUs with leading companies for setting up their
operations in the IT/ITES, handicrafts, and light engineering and SEZs
at Mahindra World City, Jaipur. In the first stage of the project, the
company has already completed development of phase I of the IT-SEZ and
has started development of the Light Engineering and Handicrafts SEZs.
Mahindra World City (Maharashtra) Limited (MWCML) will be developing a
multi-product SEZ at Karla, near Pune in collaboration with Maharashtra
Industrial Development Corporation (MIDC).
Knowledge Township Limited (KTL) (formerly Mahindra Knowledge City
Limited and prior to that Mahindra Technology Park Limited) will be
developing an Integrated Township in Maharashtra. The initial process
for land acquisition has started.
Industrial Township (Maharashtra) Limited (ITML) (formerly Mahindra
Industrial Township Limited) will be undertaking large format
development of land in Maharashtra.
Mahindra Bebanco Developers Limited (MBDL) is a 70-30 joint venture
between the Company and B. E. Billimoria & Co. Limited, one of the
leading construction companies in India. This company will develop a
residential complex across 10.2 hectares at Multi-model Internal Hub
Airport at Nagpur (MIHAN). MBDL has carried out soil investigation,
land survey and finalised the co-ordinates of the plot. In addition, a
detailed market survey has been conducted and design development
initiated.
Raigad Industrial & Business Park Limited was incorporated on 18th
June, 2009. This company is planning to undertake large format
developments including residential developments.
Mahindra Infrastructure Developers Limited (MIDL), is an equity
participant in the project company namely, New Tirupur Area Development
Corporation Limited (NTADCL) implementing the Tirupur Water Supply and
Sewerage project.
The statement pursuant to Section 212 of the Companies Act, 1956,
containing details of the CompanyÃs 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 and Mahindra
Infrastructure Developers 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.
Your Company has received approval from the Ministry of Corporate
Affairs granting exemption from attaching the copy of the Balance
Sheet, Profit & Loss account, Report of Board of Directors, Report of
the Auditors of its subsidiary companies with the Balance Sheet of the
Company. The Company Secretary will make these documents available upon
receipt of a request from any member of the Company interested in
obtaining the same. The Company shall also put the details of accounts
of the individual subsidiary Companies on its website.
The summary of financial performance of the subsidiaries has been
separately furnished forming part of the Annual Report. 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 is annexed to this report.
Sustainable Development and Corporate Social Responsibility (CSR)
As a part of the Mahindra Group, your Company is committed to the
principles of sustainable development and consistently carries out
initiatives in the area of corporate social responsibility 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.
Directors
Mr. Anil Harish, Mr. Uday Y. Phadke and Mr. Sanjiv Kapoor retire by
rotation and being eligible offer themselves for re-appointment.
Mr. Pawan Malhotra resigned from the Board of Directors of your Company
with effect from 23rd June, 2009. The Board has placed on record its
sincere appreciation of the contribution made by him during his tenure
as a Director of the Company.
Ms. Anita Arjundas was appointed as an Additional Director on 23rd
June, 2009 and was appointed as Managing Director & Chief Executive
Officer at the 9th Annual General Meeting held on 24th July, 2009.
Mr. Anand G. Mahindra resigned as the Chairman and as a Director of the
Company with effect from 15th March, 2010. The Board members while
noting the resignation, sincerely appreciated Mr. MahindraÃs valuable
contribution in building the high credibility that the Company enjoys
in the market that it operates. The Board expressed deep gratitude for
the valuable services rendered by Mr. Mahindra during his tenure, and
made special mention of Mr. MahindraÃs exemplary leadership and support
that enabled the Company to sail through troubled waters when the
industry was severely affected by the unprecedented recession since
mid-2008. The Board thanked Mr. Mahindra for devoting his time for the
Company during his tenure.
Mr. Arun Nanda was appointed as the Non-Executive Chairman with effect
from 15th March, 2010. Mr Nanda has been the Vice-Chairman of the
Company since 4th April 2001 and has had a distinguished career with
the Mahindra Group for 36 years.
Directorsà 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, 2010 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, 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(1B) of the Companies
Act, 1956, the Company has received a written certificate from M/s. B.
K. Khare & Co., Chartered Accountants, 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 seperately.
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 12 employees who were in receipt of remuneration of not
less than Rs. 2,400,000 during the year ended 31st March, 2010 or not
less than Rs.200,000 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 Directorsà Report and Accounts which are being
sent to the shareholders do 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, 23rd April, 2010
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