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Mac Charles (India) Ltd.

BSE: 507836 Sector: Services
NSE: N.A. ISIN Code: INE435D01014
BSE 00:00 | 11 Aug 259.00 11.40
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NSE 05:30 | 01 Jan Mac Charles (India) Ltd
OPEN 271.65
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VOLUME 437
52-Week high 451.95
52-Week low 167.20
P/E
Mkt Cap.(Rs cr) 339
Buy Price 242.20
Buy Qty 3.00
Sell Price 259.00
Sell Qty 325.00
OPEN 271.65
CLOSE 247.60
VOLUME 437
52-Week high 451.95
52-Week low 167.20
P/E
Mkt Cap.(Rs cr) 339
Buy Price 242.20
Buy Qty 3.00
Sell Price 259.00
Sell Qty 325.00

Mac Charles (India) Ltd. (MACCHARLESI) - Director Report

Company director report

TO THE MEMBERS

MAC CHARLES (INDIA) LIMITED

Your Directors have pleasure in presenting the 39th Annual Report of the Company onbusiness and operations of the Company along with the Audited Statement of Accounts forthe year ended 31st March 2019

1. FINANCIAL SUMMARY/HIGHLIGHTS

The summarized performance of the Company for the financial year 2018-19 and 2017-18 isgiven below:

(द in millions)
PARTICULARS Financial Year ended 31-03-2019 Financial Year ended 31-03-2018
Segmentwise Turnover/Revenue
(a) Hotel Sales turnover 535.79 512.36
(b) Sale of Electricity 107.42 76.16
(c) Interest on Corporate loan/ deposits Received 65.11 69.04
(d) Rent Received on Commercial Spaces at Cessna Business Park 139.14 141.08
(e) Others 40.54 37.26
Exceptional Income 300.00 Nil
Total Income 1188.00 835.90
Profit before Depreciation Finance Cost & Tax 768.66 407.29
From Hotel Operations 136.56 121.03
From Segments other than the Hotel 332.10 286.28
From Exceptional Income 300.00 Nil
Total 768.66 407.29
Less : Depreciation 49.70 52.05
Less : Finance Cost 107.00 62.83
Profit before Tax 611.96 292.41
Provision for tax for the year 171.66 81.76
Profit for the year 440.31 210.65
Other comprehensive Income/Loss (0.45) 2.74
Total Comprehensive Income 439.86 213.39
Earnings per share - basic and diluted - द 33.61 16.08

2. CONSOLIDATED FINANCIAL STATEMENTS;

In accordance with the provisions of Regulation 33 of the SEBI Listing Obligations andDisclosure Requirements) Regulations 2015 and applicable provisions of the CompaniesAct 2013 read with the rules made thereunder the Consolidated Financial Statements ofthe Company for the financial year 2018-19 have been prepared in compliance withapplicable Accounting Standards and on the basis of audited financial statements of theCompany and its subsidiary as approved by the respective Board of Directors.

Further pursuant to the notification issued by the Ministry of Corporate Affairs (MCA)on 16th February 2015 your Company is required to prepare the financial statements underIndian Accounting Standards (Ind AS) with effect from 1st April 2017 asprescribed under Section 133 of the Companies Act 2013 read with Rule 7 of Companies(Accounts) Rules 2014. Accordingly the Company has adopted Indian Accounting Standards(“Ind AS”) with effect from 1st April 2017.

3. COMPANY'S PERFORMANCE

During the financial year 2018-19 the overall revenue of the Company was द1188million against the previous year's revenue of द 835.90 million which includes revenuefrom Hotel operations sale of electricity office space rent and income from others. Theprofit after tax ( PAT) attributable to the shareholders for the FY 2018-19 was द 440.31million registering a growth of 109% over the PAT of द 210.65 million for the FY 2017-18mainly because of the exceptional income for the FY 2018-19.

4. FUTURE PROSPECTS

The operating environment in the hospitality sector showed signs of discouraging trendsdue to many reasons i.e tariffs are not-going up due to competition slowing down of theeconomy worldwide. In addition there is a substantial increase in supply side of thefive-star hotels in Bengaluru especially in the neighbourhood resulting in loweroccupancy and undercutting of rates due to which hotel business is not getting reasonablereturn on the capital employed.

In the present scenario of the changing conditions in the hospitality industry andemerging business opportunities in the real estate sector and having regard to the longterm interest of the shareholders for the purpose of obtaining a better return on capitalemployed your company is planning to reorient the strategies and diversify into the realestate and property development business and accordingly has amended the Main Objectsclause of the Memorandum of Association of the Company with the approval of the members.

5. FINANCE

During the year under review the financial position of the Company has beenstrengthened mainly due to exceptional income. The Company's diversification intoelectricity generation through Wind Turbine Generators office space rental income andexceptional income helped pushing up the bottom-line and the Company is able to showincreased net profit after income tax. The segment performance is furnished elsewhere inthe Annual Report.

6. DIVIDEND

Based on the Company's performance the Directors have recommended a dividend ofRs.10/- per Equity Share for the financial year ended March 31 2019. If approved bymembers would involve a cash outflow of द 157.90 million including dividenddistribution tax.

7. TRANSFER TO RESERVES

During the financial year 2018-19 it has been proposed not to transfer any amount toreserves as against द30 million during the last financial year.

8. SUBSIDIARY COMPANY

During the year the Company has only one wholly owned subsidiary(WOS) namely AirportGolfview Hotels & Suites Private Limited. Kochi a non-material non- listed IndianSubsidiary.

The Company has acquired 100% shareholding in Blue Lagoon Real Estate Private Limitedand Neptune Real Estate Private Limited as on 5th July 2019 and hence theabove said companies are wholly owned subsidiaries as on the date of this report.

A Statement containing the salient features of the financial statement of the WOS inForm AOC-I (pursuant to first proviso to sub-section (3) of section 129 read with rule 5of Companies (Accounts) Rules 2014) is attached to this report.

9. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) REPORT

Pursuant to the provisions of Regulation 34 of the SEBI LODR Regulations 2015 theManagement Discussion and Analysis capturing your Company's performance industry trendsand other material changes with respect to your Companies and its subsidiaries whereverapplicable is attached to this report.

10. CORPORATE GOVERNANCE

A separate section on Corporate Governance standards followed by your Company asstipulated under Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed to this Report. The Report on Corporate Governance alsocontains certain disclosures as required under the Companies Act 2013.

A Certificate from Mr. Umesh P Maskeri Practicing Company Secretary regardingcompliance with the conditions of Corporate Governance as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed to the Report.

11. MATERIAL CHANGES AND COMMITMENTS:

Except as mentioned below there are no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company i.e. 31st March 2019 and the date of the Directors' report i.e. 11thJuly 2019.

• To take up the business of construction real estate and property developmentthe Company has suitably amended the Main Objects clause of the Memorandum of Associationof the Company with the approval of Members.

12. ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO ANDOTHER DISCLOSURES

The disclosures to be made under sub-section (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 by your Company arefurnished below:

• ENERGY CONSERVATION

Conservation of energy continues to be on top priority of the management. Theinformation on energy conservation is detailed herein below.

a) During the year under review the Company has generated about 18.5 millions ofunits' green power which is being utilized partially for captive consumption of the Hotel& group company and the balance units generated is being sold to Govt. of Karnatakaand group company

b) An effective key-tag system is in vogue in all guest rooms to switch off lights& power connections automatically.

c) progressively switched over to LED lamps from conventional lamps with a view tosaving energy up to 60% on lighting.

d) solar panels which are continuously feeding hot water required for the guest rooms

e) three highly fuel-efficient screw chillers for our AC plant are in operation

f) Thermostatic Controls Timers and Photo Cell Switches have been in operationwherever necessary to control power consumption.

g) energy conservation initiatives are in vogue to monitor power consumption regularly.

• TECHNOLOGY ABSORPTION

In the opinion of the Board the required particulars pertaining to technologyabsorption under Section 134 of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 are not applicable as industry in which Companyoperates does not have any significant manufacturing operations.

• FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings during the year were द52 million which is 10% of the HotelSales Turnover. The Foreign Exchange utilization during the year was द37 million.

13. DIRECTORS AND KEY MANAGERIALPERSONNEL

As on the date of this Report the Company has Six (6) Directors consisting of three(3) Independent Directors and three (3) NonExecutive Directors.

a. Disqualification of Directors:

None of the directors are disqualified

b. Appointment / Resignation from the Board of Directors

During the year under review the term of office of Mr C B Pardhanani concluded onApril 1 2019 as he has crossed the age of 75 years on March 31 2019 as stipulated inamended Regulation 17(1A) of the SEBI LODR which came into force from April 1 2019. Mr CB Pardhanani tendered his resignation on April 1 2019. The Shareholders of the Companyby means of a special resolution and through postal ballot which closed on May 18 2019have appointed Mr C B Pardhanani as a Non-Executive Director who will be subject toretirement by rotation.

c. Directors retiring by rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 read withSection 149 of the said Act at least 2/3rd of the total number of Directors excludingIndependent Directors shall be liable to retire by rotation and out of the Directorsliable to retire by rotation at least 1/3rd of the Directors shall retire by rotation atevery Annual General Meeting.

In view of the above Mr. Aditya Virwani Director who is liable to retire by rotationand being eligible offers himself for re-appointment a resolution seekingshareholders'approval for his re-appointment forms part of the Notice.

d. Declaration by Independent Director

The Company has received necessary declaration from each of the Independent Directorsunder Section 149(7) of the Companies Act 2013 that he / she meets the criteria ofIndependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 16 ofSEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.

e. Woman Director

In terms of the provisions of Section 149 of the Companies Act 2013 and Regulation 17of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 your Companyhas complied with the requirement of having at least one Woman Director on the Board ofthe Company. Mrs. Tanya Girdhar is an Independent and Women Director of the Company.

f. Whole-time Directors

There are no whole-time directors in the company.

g. Changes in KMP

During the year under review there is no change in the Key managerial Personnel( KMP)of the Company However Mr. Suresh Kumar Badlaney whose term of office had concluded onMarch 31 2018 was re-appointed as Manager of the Company at the Board Meeting held onJanuary 30 2019 for a period of two years with effect from January 30 2019. The terms ofhis re-appointment and ballot which concluded on May 18 2019.

During the year under review the non- executive directors of the company had nopecuniary relationship or transactions with the Company other than sitting fee andreimbursement of expenses incurred by them for the purpose of attending meetings of theBoard/Committee of the Company.

14. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Companies Act2013 and corporate governance requirements as prescribed by SEBI LODR Regulations . Theperformance of the Board was evaluated by the Board based on the criteria such as theBoard composition and structure effectiveness of Board process information andfunctioning etc. The performance of the committees was evaluated by the Board based on thecriteria such as the composition of the committee's effectiveness of committee meetingsetc. The Board and Nomination and Remuneration Committee reviewed the performance of theindividual directors based on the criteria such as the contribution of individual directorto the Board and committee meetings like preparedness on the issue to be discussedmeaningful and constructive contribution and inputs in meetings etc. In a separatemeeting of independent directors performance of non-independent directors performance ofthe Board and performance of Chairman was evaluated.

15. NUMBER OF MEETINGS OF THE BOARD

Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies and other businesses. The schedule of the Board / Committee meetingsto be held in the forthcoming financial year are circulated to the Directors in advance toenable them to plan their time schedule for effective participation in the meetings.

The Board of Directors met 5 times during the year.The intervening gap between twoMeetings was within the period prescribed under the Companies Act 2013 and Regulations 17of the Securities and Exchange Board of India (Listing Obligation and DisclosureRequirements) Regulation 2015. Detailed information on the meetings of the Board isincluded in the Report on Corporate Governance which forms part of this Report.

16. AUDIT COMMITTEE

The Audit Committee met 5 times during the year under review. The details with respectto the composition powers roles terms of reference etc. of the Audit Committee aregiven in detail in the ‘Report on Corporate Governance' of the Company which formspart of this Report.

There are no recommendations of the Audit Committee which have not been accepted by theBoard.

17. STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders' Relationship Committee met 5 times during the year under review. Thedetails with respect to the composition powers roles terms of reference etc. of theCommittee are given in detail in the ‘Report on Corporate Governance' of the Companywhich forms part of this Report.

18. NOMINATION & REMUNERATION COMMITTEE

Nomination and Remuneration Committee consists of the following directors namely Mr.C.B. Pardhanani Chairman and Mr. P.B.Appiah Independent Director and Ms. Tanya GirdharIndependent Director.

The Nomination and Remuneration Committee met 5 times during the year under review. Ason the date of this Report the Committee comprises of 3 Directors i.e. two IndependentDirectors and one Non- Executive Director.

As per provisions of Section 178 of the Companies Act 2013 and Regulation 19 of theSEBI (LODR) the Nomination and Remuneration Committee should consist of 3 or moreNonExecutive Directors out of which not less than onehalf shall be Independent Directors.However the Chairman of the Company can be a member even if he is an Executive Director.

The Nomination and Remuneration Committee consisted of 2 Independent Directors and theCompany's Chairman as a member. the Board at its meeting held on 29th May 2019has re-constituted the said Committee with 2 Independent Directors and one Non- ExecutiveDirector.( Mr. P R Ramakrishnan Non-executive director Mr. P.B.Appiah IndependentDirector and Ms. Tanya Girdhar Independent Director)

The details with respect to the composition powers roles terms of reference etc. ofthe Nomination and Remuneration Committee are given in detail in the ‘Report onCorporate Governance' of the Company which forms part of this Report.

19. NOMINATION AND REMUNERATION POLICY

The Company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations.

The said Policy of the Company provides that the Nomination and Remuneration Committeeshall formulate the criteria for appointment of Executive Non-Executive and IndependentDirectors and persons in the Senior Management of the Company including criteria fordetermining qualifications remuneration positive attributes independence of a Directorand other matters as provided under sub-section (3) of Section 178 of the Companies Act2013.

The salient features of the Policy are set out in the Corporate Governance Report whichforms part of this Report. The Policy is also available on the website of the Companyweb-link: https://www.maccharles.com/investor-relations.

20. OTHER COMMITTEES OF THE BOARD

The Company has the following Non-mandatory Committees:

(i) Risk Management Committee

(ii) Ethics and Compliance Committee.

21. RISK MANAGEMENT

Pursuant to section 134 (3)(n) of the Companies Act 2013 & regulation 17 of theListing Regulations the Company has constituted a Risk Management Committee. The RiskManagement Committee consists of the following directors namely Mr. P R Ramakrishnan Non-Executive Director Mr. P.B. Appiah Independent Director and Ms. Tanya GirdharIndependent Director.

As part of the risk assessment and minimization procedures the Company had identifiedcertain risk areas about the operations of the Company and initiated steps whereverpossible for risk minimization. The Company's Board is conscious of the need to reviewthe risk assessment and minimization procedures on regular intervals. During the yearunder review the Company has not received any order passed by the regulators/ courts/tribunals which impacted the going concern status and Company's operation in future.

22. DIRECTORS'RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended March 31st 2019 and states that:

a) In the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards have been followed along with proper explanation relatingto materials departures if any;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the of the Company at the end of the financial year under review and of the profitor loss of the Company for that period:

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) The directors have prepared the annual accounts on a going concern basis;

e) The directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

23. PARTICULARS OF EMPLOYEES

There is no employee who is in receipt of remuneration of Rs 1.02 crore per annum or Rs8.5 lakhs per month and hence information in terms of the provisions of Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable and hence thestatement is not applicable.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

“The Company has entered into a transaction with related parties which are atarm's length and which are not in the ordinary course of business pursuant to theprovisions of Section 188 of the Companies Act 2013 read with Rule 15 of Companies(meeting of the Board and its Powers) Rules 2014. Accordingly particulars of thecontracts or arrangements with related parties referred to in Section 188(1) along withthe justification for entering into such contracts or arrangements in Form AOC-2 arefurnished which is attached to this Directors Report”. In line with the requirementsof the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated Policy on Related Party Transactions whichis available on the website of the Company.

Company has entered into transactions wth related parties pursuant to the provisions ofRegulation 23 of SEBI LODR as under:

i) Company had proposed to purchase certain properties and had identified a propertyat Bengaluru and after conducting negotiations finalised the transaction at Rs 205 croresand has made an advance payment of a sum of Rs 198.80 crores towards the purchase ofproperty from LJ-Victoria

Properties Private Limited (“LJ-Victoria”) which is a related party. Companyhas entered an agreement to sell for purchase of property from LJ-Victoria on February 82017 and this agreement to sell was amended on June 1 2017 January 25 2018 February26 2018 and October 26 2018 respectively to incorporate the enhanced purchaseconsideration and also clause for payment of interest in case the transaction does notmaterialise for any reason. cancel this agreement and seek refund of the advance amountalongwith a lump sum payment towards interest of Rs 30 crore thereon and LJ-Victoria hasagreed for the said course of action. This material related party transaction and itscancellation were at arm's length basis but it was not in the ordinary course of businessand required the approval of the Shareholders. This has since been approved and ratifiedby the shareholders of the Company through postal ballot which concluded on May 18 2019.

ii) The Company had given Inter Corporate Deposit (“ICD”) to Embassy PropertyDevelopments Private Limited (“EPDPL”) in the year 2016. A sum of द 35 crore(Rupees thirty five crores only) has been outstanding in this regard and the tenure of thesaid ICD has been extended and rolled over from time to time after the expiry of the duedate of repayment. Subsequently EPDPL acquired the shares through the open offer andthereafter became the holding Company and hence became a related party. Consequently thistransaction of Inter Corporate Deposit became a related party transaction since itamounted to a loan given to a company in which a director of the Company is interested.Pursuant to the provisions of Section 185 (2) of the Companies Act 2013. It isascertained that the proceeds of the loan availed by the said borrower has been utilisedfor their principal business activities. The amount of loan in the form of inter corporatedeposit is within the overall powers to give loans/investments granted by the shareholdersof the company pursuant to Section 186 of Companies Act 2013 to the extent of द 1000crore (Rupees thousand crores only). As this transaction amounted to a material relatedparty transaction within the meaning of Regulation 23(1) of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 thesame has been ratified and approved by the shareholders of the Company through postalballot which concluded on May 18 2019.

Except the above related party transactions there were no materially significantrelated party transactions made by the Company with the Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.

Accordingly particulars of the contracts or arrrangemens with related parties referredto in Sectin 188(1) alongwith the justification for entering into such contract orarrangement in Form AOC-2 is provided as annexure to this report. In line with therequirements of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated Policy on Related PartyTransactions which is available on the website of the Company.

25. COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

As per SEBI ( LODR) regulation the Practicing Company Secretary's Certificate oncompliance with the conditions of Corporate governance has been furnished as an annexureto the this Report.

26. AUDITORS

• Statutory Auditors and Auditors' Report

Pursuant to the provisions of section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. BSR & Associates LLP CharteredAccountants Bengaluru Firm (Firm Registration No. 101248 W/W - 100022) were appointed asStatutory Auditors of the Company at the Annual General Meeting held on 25thSeptember 2017 to hold office up to the conclusion of the 42nd Annual GeneralMeeting of the company. Subject to ratification by the Members at every Annual GeneralMeeting.

However in accordance with the Companies Amendment Act 2017 notified on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting.

As required under Section 139 of the Companies Act 2013 the Company has obtained awritten consent from the Auditors to their continued appointment and also a certificatefrom them to the effect that their existing appointment is in accordance with theconditions prescribed under the Companies Act 2013 and the rules made thereunder.

During the period under review even though there are no audit qualifications oradverse remarks the notes on accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

• Internal Auditors

M/s. Ernst & Young LLP Bengaluru Internal Auditors have been conducting quarterlyaudits of all operations of the Company and their findings have been reviewed regularly bythe Audit Committee. Your Directors note with satisfaction that no material deviationsfrom the prescribed policy and procedures have been observed.

• Secretarial Auditor and Secretarial Auditor's Report

The Board has appointed Mr. Umesh P. Maskeri Practicing Company Secretary to conductThe Secretarial Audit under the provisions of Section 204 of the Companies Act 2013 forthe financial year 2018-19. Secretarial Audit Report in Form MR-3 is attached to thisDirectors' Report. Management response against each of the qualification reservation oradverse remark or observation made in the Secretarial Audit Report has been furnishedthereon and hence does not call for any further comments separately.

• Reporting of Frauds by Auditors

During the year under review no frauds have been reported by the Statutory Auditorsunder Section 143(12) of the Companies Act 2013 requiring disclosure in the Board'sReport.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In line with the requirement of Section 135 of the Companies Act 2013 the CorporateSocial Responsibility Committee has been constituted by the Board of Directors of theCompany at its meeting held on 05.02.2016. The said Committee comprises of Mr. C.B.Pardhanani Chairman of the Company Mr. P.B. Appiah Independent Director and Ms. TanyaGirdhar Independent Director.

As required under Section 135 of the Companies Act 2013 the Board of Directors at itsmeeting held on 05.02.2016 has devised a Corporate Social Responsibility Policy whichinteralia includes the constitution of the said committee and corporate socialresponsibility activities to be under taken by the Company. The said policy may bereferred at the Company's website. The Annual Report on CSR activities is annexed to thisReport.

28. VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to Section 177 of the Companies Act 2013 read with listing Regulations theBoard of Directors at its meeting held on 05.02.2016 has adopted a vigil mechanism/whistleblower policy of the Company. The policy provides a framework for directors and employeesto report genuine concerns about unethical behavior actual or suspected fraud orviolation of the Company's code of conduct or ethics policy. Protected disclosures can bemade by a whistle blower through an email or direct access to the Chairman of the AuditCommittee. The vigil mechanism/whistle blower policy can be accessed on the Company'swebsite www.maccharlesindia.com.

29. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance towards sexual harassment at workplace and during theyear under review your Board has constituted an internal Complaints Committee to considerand redress complaints of sexual harassment & also adopted a policy on preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofSexual Harassment of women at Workplace (Prevention Prohibition and Redressal) Act 2013and the rules framed thereunder. During the year no compliants pertaining to sexualharassment were received.

30. PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN AND SECURITYPROVIDED

Loans given investments made by the Company along with the purpose for which the loanis proposed to be utilized by the recipient are provided in the financial statements.

31. EXTRACT OF THE ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extract of the Annual Return as at 31st March 2019 forms part of thisreport.

32. INTERNAL FINANCIAL CONTROL POLICY AND ITS

ADEQUACY

The Board has adopted an Internal Financial Control Policy to be followed by theCompany and such policies and procedures adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically. The observations and comments of the Audit Committee areplaced before the Board.

33. DISCLOSURES:

• Borrowing from banks

During the previous financial year the Company had entered into Lease RentalDiscounting arrangement with HDFC Bank Ltd for its borrowing facilities. The Company wassanctioned borrowing facilities aggregating to द1240/- millions from HDFC Bank Ltd. Theoutstanding debt as on March 31 2019 was Rs 1231.55 millions. The above borrowing iswithin the powers of the Board of Directors of the Company as authorised by theshareholders of the company.

• Dues to small scale undertakings

There are no dues payable to small scale undertakings.

• Supension from trading and revocation of suspension by BSE Limited

Trading the Shares of the Company were suspended from trading on 28-06-2018 by the BSELimited for reasons of non compliance withsome of the clauses of SEBI LODR like delay inpayment of annual listing fees non submission of financial results in the prescribedformat and non-compliance with Minimum Public Shareholding Norms etc and BSE imposed afine of Rs 2650000 towards SOP fine. Company has since complied with the variousrequirements of LODR and BSE has revoked the suspension with effect from 27-09-2018.

• Lock in on shares held by promoters and subsequent release

The shares held by the promoters were restricted from transfer by way of freezing(placed under lock in) from 4-09-2018 to 31-12-2018 by CDSL and NSDL as a part of thecondition for revocation of suspension imposed by the BSE Limited and the said freeze(lock in) of the shares held by the promoters was lifted by BSE/depositories with effectfrom 01-01-2019.

• Offer for sale completed by the promoters

The promoters of the Company launched Offer for Sale on February 28 2019 on thesecondary market mechanism of BSE and offloaded the excess quantity of 872900 EquityShares. Thereafter the shareholding of the promoters has been brought down to 75 % andCompany has thus increased the level of public shareholding to 25 % and thereby compliedwith the MPS norms as stipulated under Regulation 38 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 read with in Rule 19(2) and 19 A of thesecurities Contracts

(Regulations) Rules 1957. Company has submitted a reply explaining the reasons fornot being to able to launch the OFS owing to suspension of shares and freezing of sharesof promoters held by promoters to BSE on February 15 2019 and requested it to waive thefine of Rs 4460000 imposed by BSE vide its letter dated February 7 2019 in thisregard.

• Green Initiatives

Electronic copies of the Annual Report and notice of the ensuring AGM are sent to allthe members whose email address are registered with the Company /DepositoryParticipant(s). For members who have not registered their email addresses physical copiesof the Annual Report and the notice of ensuing AGM are sent in the permitted mode. Membersrequiring physical copies can send a request to the Company Secretary. The Company isproviding e-voting facility to all members to enable them to cast their voteselectronically on all resolutions set forth in the AGM Notice. The instructions fore-voting are provided in the AGM Notice.

• Other declarations

1. Declaration by the Chief Financial Officer affirming compliance with the code ofconduct is annexed elsewhere in this Report.

2. There are no material changes and commitments made during the financial year.

3. There are no changes in the nature of business during the financial year.

4. There is a material variation of market capitalization during the financial year.

5. There are demat suspense accounts / unclaimed suspense account during the financialyear.

6. Necessary disclosures of Accounting Treatment have been made in the financialstatements..

• Other Disclosures and reports

Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act 2013.

2. Issue of equity shares with differential rights as to dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

4. No significant or material orders were passed by the Regulators or Courts ofTribunals which impact the going concern status and Company's operations in future.

34. DEMATERIALIZATION

The equity shares of the Company have been admitted for dematerialization with both theDepositories viz. Central Depository Services (India) Limited (CDSL) and NationalSecurities Depository Limited (NSDL). The ISIN allotted to your Company's equity shares isINE435D01014.

35. INSIDER TRADING REGULATIONS

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations1992 as amended from time to time the Code of Conduct for Prohibition of Insider Trading(Code) as approved by the Board is in force by the Company. The Company also adopts theconcept of Trading Window Closure to prevent its Directors Officers designatedemployees their relatives and other employees from trading in the securities of theCompany at the time when there is unpublished price sensitive information.

36. ACKNOWLEDGEMENTS

Your Directors are grateful to the Shareholders for their support and co-operationextended to the Company for many years. The Directors also thank the Banks namely StateBank of India and HDFC Bank for their co-operation and support. The Directors wish toplace on record the support and encouragement received from the Department of TourismGovernment of India Karnataka State Government and Foreign collaborators M/s. Le Meridien/ Marriott International. The Directors also acknowledge the dedicated services renderedby the officers and all the staff of the company.

On behalf of the Board of Directors

For Mac Charles (India) Limited

P B Appiah P R Ramakrishnan
Director Director
DIN:00215646 DIN:00055416

Place :Bengaluru

Date: July 11 2019

Registered office & Website site and Email ID: No.28 Sankey Road Bengaluru -560052 www.maccharlesindia.com secretarial@lemeridienbangalore.com