Your Directors are pleased to present their Twenty Third Reporttogether with the Audited Financial Statements of your Company for the year ended March31 2019.
1. Operations and Financial Overview
During the financial year 2018-19 your Company has registered a steadygrowth in memberships as well as in resort incomes. This coupled with eciency gainsacross the operations has allowed your Company to register credible results in thefinancial year 2018-19. Your Company added 18377 new members to its vacation ownershipbusiness taking the total membership to over 2.43 lakhs at the end of the year. Thegrowth in the member addition is a result of continued success of Company'spull-based digital and referral leads as well as tapping of prospects by way of engagementthrough innovative platforms alliances and corporate partnerships. During the year underreview the Company has also focussed on reinventing its marketing and brand buildingcampaigns to bring alive the Club Mahindra' experience and generate a pull forthe brand by making it more aspirational and exciting. Your Company added 6 resorts duringthe year under review taking the total inventory to 3595 units across its 61 resorts asof March 31 2019. During the year under review your Company has increased its stake inHoliday Club Resorts Oy Finland (HCR) from 95.16% to 96.47% on account of acquisition ofadditional shares in line with the agreements executed with the shareholders of HCR andconversion of loans into equity.
The accounts of the Company upto the financial year ended March 312018 were prepared in accordance with the provisions of Indian Accounting Standard("Ind AS") 18 where non-refundable admission fees of 60% was accounted for asincome in the year of sale. The Ministry of Corporate Affairs (MCA') vide itsnotification dated March 28 2018 has mandated that from April 1 2018 the accounts ofthe Company have to be prepared in accordance with Ind AS 115. As per this new standardInd AS 115 income from vacation ownership contracts needs to be recognised over thetenure of membership and only incremental costs incurred for obtaining the membership aredeferred over the tenure of the contract. Other costs have to be charged to Profit &Loss for the period.
In view of the above the financial statements of the Company for thefinancial year ended March 31 2019 have been prepared in accordance with the Ind AS asprescribed under Section 133 of the Companies Act 2013 ("the Act") read withthe relevant rules issued thereunder and other accounting principles generally accepted inIndia. Accordingly the Company has applied the modified retrospective approach as perpara C3(b) of Ind AS 115 to contracts that were not completed as on April 1 2018 and thecumulative effect of applying Ind AS 115 is recognized at the date of initial applicationi.e. April 1 2018 in accordance with para C7 of Ind AS 115 as an adjustment to otherequity. The transitional adjustment in standalone books of Rs. 121044.68 lakhs (net ofdeferred tax) has been stated as Transition Difference under other equity based on therequirements of the Ind AS 115. Further due to application of Ind AS 115 membership feesand incremental cost to obtain and / or fulfill a contract with a customer as applicableis recognized over the effective membership period.
Considering the change in the applicable Ind AS the financial resultspresented for the year ended March 31 2019 (as per Ind AS 115) are not comparable withthe financial results presented for the year ended March 31 2018 (as per Ind AS 18 andwhich have not been restated).
As at September 30 2018 the Company has changed its accounting policywith respect to measurement of freehold land. According to the revised policy freeholdland is revalued and measured at fair value based on periodic valuation done by externalindependent valuer using market approach. The revaluation surplus is recorded in OtherComprehensive Income and is credited to Revaluation reserve in other equity. Thisrevaluation surplus is not available for distribution to shareholders. The carrying valueof freehold land as at March 31 2019 under revaluation model is Rs. 112875.64 lakhs andas per cost model is Rs. 16714.49 lakhs.
During the year under review your Company's total income(including other income) was Rs. 96343.85 lakhs Profit After Tax (PAT) was Rs. 6386.23lakhs and Diluted earnings per share (EPS) stood at Rs. 4.80.
Further your Company's consolidated total income (including otherincome) was Rs. 229566.05 lakhs consolidated PAT was
Rs. 5957.19 lakhs and the Diluted EPS for 2018-19 stood at Rs. 4.54.
|2. Financial Highlights (Standalone) || || |
| || ||( र in lakhs) |
| ||Ind AS 115 ||Ind AS 18 |
| ||2018 - 2019 ||2017 - 2018 |
|Income: || || |
|Income from sale of Vacation Ownership and other services ||91829.15 ||106418.57 |
|Other Income ||4514.70 ||3000.46 |
|Total Income ||96343.85 ||109419.03 |
|Expenditure: || || |
|Less: Employee Cost & Other Expenses ||81183.92 ||83219.30 |
|Profit before Depreciation Interest and Taxation ||15159.93 ||26199.73 |
|Less: Depreciation ||5140.50 ||5479.55 |
|Interest ||2.19 ||4.86 |
|Profit for the year before Tax ||10017.24 ||20715.32 |
|Less: Provision for Tax Current Tax ||2201.66 ||6558.88 |
| Deferred Tax (net) ||1429.35 ||720.57 |
|Net Profit for the year after Tax ||6386.23 ||13435.87 |
|Other Comprehensive Income (Net of Tax) ||73921.20 ||(71.57) |
|Total Comprehensive Income ||80307.43 ||13364.30 |
3. Share Capital
During the year under review the Company has allotted 110000 equityshares of Rs. 10 each to the eligible employees pursuant to exercise of stock optionsgranted under the Company's Employee Stock Option Scheme - 2014. Consequent to theaforesaid allotments the Issued Subscribed and Paid up Share Capital of the Company ason March 31 2019 was Rs. 1335537840 (Rupees One Hundred Thirty Three Crore Fifty FiveLakhs Thirty Seven Thousand Eight Hundred and Forty only) divided into 133553784(Thirteen Crore Thirty Five Lakhs Fifty Three Thousand Seven Hundred and Eighty Four)equity shares of Rs. 10 each (Rupees Ten only). During the year under review your Companydid not issue shares with differential voting rights / sweat equity. Details ofDirectors' shareholding as on March 31 2019 are mentioned in the CorporateGovernance Report which forms part of this Annual Report.
In compliance with Regulation 43A of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBIListing Regulations") the Dividend Distribution Policy of the Company is annexedherewith as Annexure I and is also available at the Company's website at:http://www.clubmahindra.com/about-us/policies As explained above with the adoption of newrevenue recognition policy in accordance with Ind AS 115 the Company had to change itsrevenue recognition policy. Consequently the Deferred Revenue and Deferred Costs had tobe recomputed and has been stated as Transition Difference. The Company is profitable andhas healthy cash flows and has declared dividends every year since 2006. The Company isseeking a clarification from MCA that this Transition Difference need not be consideredfor the purpose of declaration of dividend under the provisions of Section 123(1) of theAct. The declaration of dividend if any shall be subject to receipt of clarificationfrom MCA.
5. Transfer to Reserve
Your Directors do not propose to transfer any amount to reserves.
6. Related Party Transactions
Your Company undertakes various transactions with related parties inthe ordinary course of business. All transactions entered with related parties during theyear under review are on arm's length basis and in the ordinary course of business.Your Company has not entered into any contracts / arrangements / transactions with relatedparties which could be considered material in accordance with the policy of the Companyi.e. Policy on Materiality of and Dealing with Related Party Transactions ("RPTPolicy"). Accordingly AOC-2 is not applicable to the Company. Further transactionsentered by the Company with related parties in the normal course of business were placedbefore the Audit Committee of the Board.
There were no materially significant related party transactions withthe Promoters Directors and Key Managerial Personnel which may have a potential conflictwith the interest of the Company at large.
The RPT Policy as approved by the Audit Committee and the Board isavailable on the website of the Company at: http://www.clubmahindra.com/about-us/policiesYour Directors draw attention of the members to Note No. 46 to the Standalone FinancialStatements which sets out related party disclosure.
7. Particulars of Loans and Advances Guarantees Investmentsand Securities
As your Company is engaged in the activity covered under Schedule VI ofthe Act the provisions of Section 186 of the Act relating to loans given investmentsmade guarantees given or securities provided are not applicable to the Company. Howeverthe details of such loans given and guarantees given to / on behalf of subsidiarycompanies / JV company are provided in the Note Nos. 8 9 and 17 to the StandaloneFinancial Statements. These loans and guarantees for which loans are provided are proposedto be utilised by the respective recipients for their business purposes. Particulars ofinvestments made by your Company are provided in the Standalone Financial Statements atNote Nos. 6 and 13. During the year under review your Company has provided CorporateGuarantee of Euro 5 million on behalf of MHR Holdings (Mauritius) Limited Mauritius("MHR Holdings") subsidiary company of the Company as a collateral securitytowards the financial facilities availed by MHR Holdings from a Bank.
The details of loans and advances which are required to be disclosed inthe Annual Report of the Company pursuant to Regulation 34(3) read with Schedule V of theSEBI Listing Regulations are furnished separately as Annexure II to this report.
8. Significant and Material Orders passed by the Regulators orCourts
There are no significant and material orders passed by theRegulators/Courts/Tribunal which would impact the going concern status of the Company andits operations in the future.
9. Corporate Social Responsibility
Corporate Social Responsibility ("CSR") activities of theCompany are guided by its CSR Policy which is framed and approved by the Board. TheCompany's CSR Policy is available on its website: http://www.clubmahindra.com/about-us/policies. These are discussed in detail in the Management Discussion and Analysis Reportwhich forms a part of this Annual Report. The statutory disclosure with respect to CSRactivities forms part of this Report and is annexed herewith as Annexure III.
In line with the philosophy of the Mahindra Group your Company iscommitted to following sustainable practices in its operations. The details of theinitiatives taken by your Company in this regard are discussed in the section onSustainability in the Management Discussion and Analysis Report which forms a part ofthis Annual Report.
11. Business Responsibility Report
The Business Responsibility Report' (BRR) of your Companyfor the year 2018-19 as required under Regulation 34(2)(f) of the SEBI ListingRegulations forms part of this Annual Report. Your Company believes that the sustainabledevelopment aims at achieving economic growth and improvement in well-being whilepreserving the natural resources and ecosystem for future generations. Your Company alsorecognises the importance of sustainability and is committed to conserve the ecologicalintegrity of its locations through responsible business practices.
12. Corporate Governance Report
A Report on Corporate Governance along with a certificate from theStatutory Auditors of the Company regarding the compliance of conditions of corporategovernance as stipulated under Schedule V of the SEBI Listing Regulations forms a part ofthis Annual Report. Further a certificate from M/s M. Damodaran & AssociatesPracticing Company Secretary confirming that none of the directors on the Board of theCompany have been debarred or disqualified from being appointed or continuing as directorsof companies by SEBI/MCA or any such statutory authority is attached to the CorporateGovernance Report.
13. Management Discussion and Analysis Report
A detailed analysis of the Company's operational and financialperformance as well as the initiatives taken by the Company in key functional areas suchas Resort Operations Member Experience Business Excellence Human Resources andTechnology & Digitisation are separately discussed in the Management Discussion andAnalysis Report which forms a part of this Annual Report.
14. Whistle Blower Policy & Vigil Mechanism
As per the provisions of Section 177(9) of the Act and Regulation 22 ofSEBI Listing Regulations the Company is required to establish an effective VigilMechanism for Directors employees and other stakeholders to report genuine concerns. Thedetails of the Whistle Blower Policy and Vigil Mechanism have been disclosed in theCorporate Governance Report which forms a part of this Annual Report.
15. Employees' Stock Options
Employees' Stock Options represent a reward system based onoverall performance of the individual employee and the Company. It helps the Company toattract retain and motivate the best available talent. This also encourages employees toalign individual performances with the Company and promotes increased participation by theemployees in the growth of the Company. Accordingly your Company formulated theEmployees' Stock Option Scheme in 2006 (2006 Scheme) and subsequently in 2014 (2014Scheme) after obtaining requisite approvals from the shareholders. All the balance sharesavailable under 2006 Scheme together with any other shares represented by Options that maylapse for any reason thereat was/will be considered for issuing/granting Options to theEmployees pursuant to the provisions under the 2014 Scheme. During the year under reviewpursuant to SEBI (Share Based Employee Benefits) Regulations 2014 ("SEBI ESOPRegulations") no new options were granted under 2014 Scheme.
Details required to be provided under Regulation 14 of SEBI ESOPRegulations is available on the Company's website at:http://www.clubmahindra.com/about-us/investor-relations/ financials The details ofEmployees' Stock Options forms part of the Notes to accounts of the FinancialStatements in this Annual Report. A certificate from the Statutory Auditors of the Companyconfirming that the 2006 Scheme and 2014 Scheme have been implemented in accordance withthe SEBI ESOP Regulations and the resolution passed by the Shareholders will be placed atthe ensuing Annual General Meeting for inspection by members.
16. Subsidiaries Joint Venture and Associate Companies
During the year under review your Company through its subsidiaryCovington S..r.l Luxembourg increased its equity stake in Holiday Club Resorts OyFinland ('HCR') from 95.16% to 96.29% in August 2018 and further to 96.47% in November2018.
Further Holiday Club Canarias Investments S.L.U. a step downsubsidiary of the Company acquired 100% stake in Passeport Sante SLU("Passeport"). Accordingly Passeport has become a step-down subsidiary of theCompany. Also Kiinteist Oy Himoksen Thti 2 has been merged with HCR and consequentlyhas ceased to be a subsidiary of the Company.
During the year HCR has sold its entire 49% stake in Kiinteist OySallan Kylpyl (Kiinteist') and consequently Kiinteist has ceased to bean associate of HCR and in turn of the Company.
Arabian Dreams Hotel Apartments LLC Dubai (Arabian Dreams) a JointVenture company of the Company is considered as subsidiary company from Financial Year2016-17 in accordance with the provisions of Indian Accounting Standards. Accordingly asof March 31 2019 your Company has 36 subsidiaries (including 30 indirect subsidiaries)1 Joint Venture company (indirect) and 2 associate companies (including 1 indirectassociate).
17. Performance of Subsidiaries
Gables Promoters Private Limited ('Gables') is a wholly ownedsubsidiary of the Company. Gables operates a resort property of 115 rooms at NaldehraHimachal Pradesh. Your Company avails rooms in the resort property of Gables for usage ofits guests and vacation ownership members.
Mahindra Hotels and Residences India Limited ('MHARIL') is a whollyowned subsidiary of the Company. MHARIL did not have any operations during the year underreview.
Heritage Bird (M) Sdn. Bhd Malaysia ('Heritage Bird') is a whollyowned subsidiary of the Company. Heritage Bird's principal activities are holding ofinvestments and leasing of properties. Heritage Bird has rooms/units in apartmentproperties in a well-known location in Kuala Lumpur Malaysia.
MH Boutique Hospitality Limited Thailand ('MH Boutique') in whichyour Company holds forty nine per cent of equity stake is a subsidiary of the Company byvirtue of control on the composition of the Board of MH Boutique and it mainly holdsinvestments in Infinity Hospitality Group Company Limited Thailand ('Infinity').
Infinity is the subsidiary company of MH Boutique and by virtue of thesame is also subsidiary of the Company. Infinity owns and operates a hotel/apartmentproperty at Bangkok Thailand. Your Company avails rooms in the hotel property of Infinityfor usage of its guests and vacation ownership members.
MHR Holdings (Mauritius) Limited Mauritius ('MHR Holdings') is awholly owned subsidiary of the Company. The principal activity of MHR Holdings is to holdinvestments. Currently it holds investments in Covington S..r.l Luxembourg('Covington').
Covington is a wholly owned subsidiary of MHR Holdings and in turn asubsidiary of your Company. The principal activity of Covington is to hold investments.Currently it holds investments in HCR and HCR Management Oy (HCRM) Finland. As on March31 2019 Covington holds 96.47% stake in HCR and 100% stake in HCRM.
HCR subsidiary of Covington and in turn of the Company is the largestoperator of leisure hotels in Finland and the largest vacation ownership company inEurope. As of March 31 2019 HCR has 33 resorts of which 25 are located in Finland 2 inSweden and 6 in Spain and the same are fully operational. Further out of these 7 resortsin Finland and 1 resort in Sweden have a spa hotel attached.
HCRM is a wholly owned subsidiary of Covington and in turn subsidiaryof your Company. HCRM is primarily engaged in the sale and trade of real estates propertymanagement investment activities and dealing in securities. Currently HCRM holdsinvestment in the share capital of HCR.
Arabian Dreams (a Joint Venture company as per the Act and Subsidiarycompany as per Ind AS) operates 75 room hotel property in Dubai (UAE) taken on leasebasis. Your Company avails rooms/apartments in the hotel property of Arabian Dreams forusage of its guests and vacation ownership members.
Guestline Hospitality Management & Developement Services Limited('Guestline') is an associate of your Company pursuant to the provisions of the Act asthe Company is holding more than 20 per cent of total share capital which includespreference share capital. Guestline did not have any operations during the year underreview.
Kiinteist Oy Seniori-Saimaa is an associate of HCR and consequentlyassociate of your Company.
Joint Venture Company
Tropiikin Rantasauna Oy is a Joint Venture company (JV) of HCR andconsequently JV of your Company.
A report on the performance and financial position of the subsidiariesassociate and joint venture company whose financial statements are considered forpreparation of Consolidated Financial Statements of the Company as per the Act (in theprescribed format i.e. "Form AOC-1") is provided as Annexure to the ConsolidatedFinancial Statements. The policy for determining material subsidiaries as approved by theBoard may be accessed on the Company's website at:http://www.clubmahindra.com/about-us/policies In accordance with the third proviso toSection 136(1) of the Act the Annual Report of the Company containing therein itsStandalone and the Consolidated Financial Statements are available on the Company'swebsite www.clubmahindra. com. Further as per fourth proviso to the said Section theAudited Annual Accounts of each of the said subsidiaries of the Company are also availableon the Company's website www.clubmahindra.com. Any Shareholder who may be interestedin obtaining a copy of the aforesaid documents may write to the Company Secretary at theCompany's Corporate Office. Further the said documents will be available forexamination by the Shareholders of the Company at its Registered Office during all workingdays except Saturday Sunday Public Holidays and National Holidays between 10.00 AM to12.00 Noon upto the date of the ensuing Annual General Meeting.
As on March 31 2019 your Company had 8 Directors which includes 5Independent Directors 2 Non-Executive Directors and 1 Managing Director.
As informed in the previous Annual Report Mr. Vineet NayyarNon-Executive Director of the Company did not seek re-appointment at the 22ndAnnual General Meeting held on
August 2 2018 and consequently ceased to be a Director of the Companywith effect from August 2 2018. The Board places on record its sincere appreciation forthe contributions made by Mr. Vineet Nayyar during his association with the Company.
In terms of the Articles of Association of the Company and as perSection 152(6) of the Act Mr. Arun Nanda being longest in the Office is liable toretire by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment.
Based on the recommendation of the Nomination and RemunerationCommittee ("NRC") and subject to the approval of the Shareholders the Board ofDirectors at their meeting held on May 15 2019 have approved the re-appointment of Mr.Kavinder Singh as the Managing Director & CEO of the Company for a period of 5 (five)years with effect from November 3 2019 to November 2 2024 and has also approvedremuneration payable to Mr. Kavinder Singh.
Further NRC at its Meeting held on May 15 2019 and vide circularresolution passed on June 22 2019 on the basis of performance evaluation of IndependentDirectors and taking into account the external business environment the businessknowledge acumen experience and the substantial contribution made by Mr. Rohit KhattarMr. Sanjeev Aga Mr. Sridar Iyengar and Mr. Cyrus Guzder during their tenure hasrecommended to the Board that continued association of Mr. Rohit Khattar Mr. Sanjeev AgaMr. Sridar Iyengar and Mr. Cyrus Guzder as Independent Directors of the Company would bebeneficial to the Company. Based on the above and the performance evaluation ofIndependent Directors the Board at its meeting held on May 15 2019 and vide circularresolution passed on June 24 2019 has recommended: (a) Re-appointment of Mr. RohitKhattar and Mr. Sanjeev Aga as Independent Directors of the Company not liable to retireby rotation to hold Office for a second term of five years each commencing from August27 2019 to August 26 2024.
(b) Re-appointment of Mr. Sridar Iyengar as an Independent Director ofthe Company not liable to retire by rotation to hold Office for a second term commencingfrom August 27 2019 to July 31 2022.
(c) Re-appointment of Mr. Cyrus Guzder as an Independent Director ofthe Company not liable to retire by rotation to hold Office for a second term commencingfrom August 27 2019 to July 31 2020. The Notice convening forthcoming Annual GeneralMeeting ("AGM") includes the proposal for re-appointment of aforesaid Directors.A brief resume of the Directors seeking re-appointment at the forthcoming AGM and otherdetails as required to be disclosed in terms of Regulation 36(3) of the SEBI ListingRegulations and Secretarial Standard on General
Meetings (SS-2) forms part of the Corporate Governance Report and isalso annexed to the Notice.
The Company has received notices in writing from the Shareholders ofthe Company under Section 160(1) of the Act proposing the candidature of Mr. KavinderSingh Mr. Rohit Khattar Mr. Sanjeev Aga Mr. Sridar Iyengar and Mr. Cyrus Guzder for theOffice of Director of the Company. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofindependence as prescribed under the Act and SEBI Listing Regulations.
19. Key Managerial Personnel (KMPs)
During the year under review Mr. Nirav Momaya Deputy CompanySecretary was appointed as an Interim Company Secretary and Compliance Officer of theCompany on September 28 2018. Further the Board of Directors at their meeting held onOctober 29 2018 pursuant to the recommendation of NRC appointed Mr. Dhanraj Mulki asthe General Counsel & Company Secretary as well as Compliance Officer and KMP of theCompany with effect from the date of the meeting. Consequently Mr. Nirav Momaya wasre-designated as Deputy Company Secretary' of the Company with effect from thesaid date.
As on March 31 2019 Mr. Kavinder Singh Managing Director
& CEO Mrs. Akhila Balachandar Chief Financial Officer and Mr.Dhanraj Mulki General Counsel & Company Secretary are the KMPs as per the provisionsof the Act.
20. Policy on Directors' appointment and remuneration
The salient features of the following policies of the Company andchanges therein made during the year are attached herewith and marked as Annexure IV:
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 Theaforesaid policies (as amended) are also available at the linkhttp://www.clubmahindra.com/about-us/policies The Managing Director & CEO of theCompany does not receive remuneration or commission from any of its subsidiaries and drawsremuneration only from the Company.
21. Board Evaluation
The Board has conducted an annual evaluation of its own performanceindividual Directors Committees of the Board and that of its Non-Executive Chairman interms of the relevant provisions of the Act Rules made thereunder and SEBI ListingRegulations. The manner in which the evaluation was conducted by the Company has beenexplained in the
Corporate Governance Report which forms a part of this Annual Report.
22. Number of Board Meetings
During the year under review the Board of Directors met 6 (six) times.The details of the Board Meetings and attendance of Directors are provided in theCorporate Governance Report which forms a part of this Annual Report.
23. Composition of Audit Committee
The Audit Committee consists of Mr. Sridar Iyengar as its Chairman andMr. Cyrus Guzder Mr. Rohit Khattar Mr. Sanjeev Aga Mr. V S Parthasarathy and Ms.Radhika Shastry as its other members. Further details are provided in the CorporateGovernance Report which forms a part of this Annual Report.
24. Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Act your Directors state that: a)in the preparation of the annual accounts for the year ended March 31 2019 theapplicable Accounting Standards had been followed and there is no material departure; b)they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2019 and of the profit of theCompany for the year ended on that date; c) they have taken proper and sucient care forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the annual accounts have been prepared on a going concern basis;e) the directors have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; andf) the directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
25. Internal Financial Controls and their Adequacy
Your Company has an adequate internal controls system commensuratewith the size and nature of its business. The system is supported by documented policiesguidelines and procedures to monitor business and operational performance which are aimedat ensuring business integrity and promoting operational eciency. Further details areprovided in the
Management Discussion and Analysis Report which forms a part of thisAnnual Report. During the year under review the Statutory Auditors and SecretarialAuditor have not reported any instances of frauds committed in the Company by its Officersor Employees to the Audit Committee under Section 143(12) of the Act details of whichneed to be mentioned in this Report.
26. Consolidated Financial Statements
The Consolidated Financial Statements of the Company and itssubsidiaries associate and joint venture companies prepared in accordance with the Actand applicable Accounting Standards form part of this Annual Report.
For the purpose of preparation of the Consolidated Audited FinancialStatements of the Company for the financial year ended March 31 2019 as per Ind AS thelatest audited financial results of all the subsidiaries one associate company and oneJoint Venture company pertaining to HCR were considered and consolidation was done as perthe provisions of Section 129 of the Act.
27. Risk Management
Your Company has a well-defined risk management framework to identifyand evaluate elements of business risk. The Audit Committee has an oversight in the areaof financial risk and controls. Other details including details pertaining to variousrisks faced by your Company and also development and implementation of risk managementframework are discussed in the Management Discussion and Analysis Report forming part ofthis Annual Report.
28. Disclosure requirements
Pursuant to Regulation 34(3) read with Schedule V of the SEBIListing Regulations details of transactions with persons or entities belonging to thepromoter/ promoter group which hold 10% or more shareholding in the Company are furnishedunder Note No. 46 to the Standalone Financial Statements which sets out related partydisclosure.
The provisions in respect of maintenance of cost records asspecified under sub-section (1) of Section 148 of the Act are not applicable to yourCompany.
The Directors have devised proper systems to ensure compliance withthe provisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
During the year under review no revision was made in the previousfinancial statements of the Company.
A) Statutory Auditors
The Shareholders at their 21st Annual General Meeting("AGM") held on August 2 2017 approved the appointment of M/s B S R
& Co. LLP Mumbai (ICAI membership No:101248W/W-100022) as theStatutory Auditors of the Company for a period of 5 (five) years commencing from theconclusion of the 21st AGM till the conclusion of 26th AGM subjectto ratification of their appointment by the Members at every AGM of the Company. Pursuantto Notification issued by the MCA on May 7 2018 amending Section 139 of the Act themandatory requirement for ratification of appointment of Auditors by the Shareholders atevery AGM has been omitted. Accordingly the Shareholders at their 22nd AGMheld on August 2 2018 approved the ratification of the appointment of M/s B S R & Co.LLP Chartered Accountants as the Auditors of the Company from the conclusion of the 22ndAGM to hold Office until the conclusion of the 26th AGM of the Company to beheld in the year 2022. The Auditors' Report on the financial statements of theCompany for the year ending March 31 2019 is unmodified i.e. it does not contain anyqualification reservation or adverse remark. The Auditors' Report is enclosed withthe financial statements forming part of the annual report.
B) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and Rulesthereunder the Company has appointed M Siroya and Company Practicing Company Secretariesto undertake the secretarial audit of the Company. The Report of the Secretarial Auditoris annexed herewith as Annexure V. There are no qualifications reservations or adverseremarks made by M Siroya and Company Practising Company Secretaries Secretarial Auditorof the Company in the Secretarial Audit Report.
Your Company has not accepted any deposits from public or its employeesand as such no amount on account of principal or interest on deposit were outstanding asof the Balance Sheet date.
31. Credit Rating
India Ratings and Research Private Limited ("India Ratings")has re-armed Long-Term Issuer Rating of IND A' with a stable outlook to yourCompany. The IND A' rating indicates adequate degree of safety regarding timelyservicing of financial obligations. India Ratings continues to take a consolidated view ofthe Company and its subsidiaries including HCR Finland to arrive at the ratings.
32. Material Changes and Commitment Aecting Financial Position of theCompany
There are no material changes and commitments affecting financialposition of the Company which have occurred between the end of the financial year of theCompany i.e. March 31 2019 and the date of the Directors' Report.
33. Annual Return
As per the provisions of Section 92(3) of the Act read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 as amended from time to timethe extract of the Annual Return as of March 31 2019 in the prescribed form MGT- 9 isannexed herewith as Annexure VI. The Annual Return of the Company has been placed on thewebsite of the Company and can be accessed athttp://www.clubmahindra.com/about-us/investor-relations/financials.
34. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Your Company continuously strives to conserve energy adopt environmentfriendly practices and employ technology for more ecient operations. Some of theseinitiatives are discussed in the section on Sustainability in the Management Discussionand Analysis Report which forms a part of this Annual Report. The particulars relating toenergy conservation technology absorption and foreign exchange earnings and outgo asrequired under Section 134(3)(m) of the Act and Rule 8(3) of the Companies (Accounts)Rules 2014 are given in the Annexure VII to this Report.
35. Human Resources
Your Company takes pride in the commitment competence and dedicationshown by its employees in all areas of its business. It considers people as its biggestassets. It has put concerted efforts in talent management and succession planningpractices strong performance management and learning and training initiatives to ensurethat your Company consistently develops inspiring strong and credible leadership. Apartfrom continued investment in skill and leadership development of its people this yearyour Company has also focused on employee engagement initiatives aimed at increasing theCulture of Innovation & Collaboration across all strata of the workforce. This yearthe Employee Engagement Scores as reflected through MCARES survey (an internalbenchmarking exercise within the Mahindra Group) has been the highest ever for yourCompany. Your Company has also been certified as one of India's Great Places to WorkFor and recognised amongst the 100 best companies to work for by Great Place To Work(GPTW) Institute. These are discussed in detail in the Management Discussion and AnalysisReport forming part of this Annual Report.
The Company has a Policy on Prohibition Prevention and Redressal ofSexual Harassment of Women at Workplace and matters connected therewith or incidentalthereto covering all the aspects as contained under The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013 ("POSH Act"). TheCompany has also complied with provisions relating to the constitution of InternalComplaints Committee under the POSH Act and the Committee includes external members fromNGO and / or members with relevant experience. There was one complaint pending at thebeginning of the year. During the year under review the Company received four complaintsunder the Policy. All the complaints were disposed-off and appropriate actions were takenin all cases within the statutory timelines. Further there were no complaints pending formore than 90 days during the year.
36. Particulars of Employees
The disclosure with respect to the remuneration of Directors KMPs andemployees under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 ("theRules") is attached as Annexure VIII and forms a part of this report.
The Company had 9 (Nine) employees who were employed throughout theyear and were in receipt of remuneration more than Rs. 102 lakhs per annum. There was noemployee employed for part of the year and in receipt of remuneration of more than Rs.8.50 lakhs per month. In terms of Section 136 of the Act the copy of the FinancialStatements of the Company including the Consolidated Financial Statements theAuditor's Report and relevant Annexures to the said Financial Statements and reportsare being sent to the Members and other persons entitled thereto excluding theinformation in respect of the said employees containing the particulars as specified inRule 5(2) of the said Rules which is available for inspection by the Members at theCompany's Registered Office during all working days except on Saturday SundayPublic Holidays and National Holidays between 10.00 AM to 12.00 Noon up to the date ofthe ensuing Annual General Meeting. If any Member is interested in obtaining a copythereof he may write to the Company Secretary of the Company at its Registered/CorporateOffice. The Financial Statements reports etc. of the Company are available on the websiteof the Company www.clubmahindra. com.
37. Acknowledgement and Appreciation
Your Directors take this opportunity to thank the Company'sCustomers Shareholders Suppliers Bankers Financial Institutions and the Central andState Governments for their unstinted support. The Directors would like to place on recordtheir appreciation to employees at all levels for their hard work dedication andcommitment.
| ||For and on behalf of the Board |
| ||Arun Nanda |
|Mumbai ||Chairman |
|June 24 2019 ||DIN: 00010029 |