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Mahindra Holidays & Resorts India Ltd.

BSE: 533088 Sector: Services
NSE: MHRIL ISIN Code: INE998I01010
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VOLUME 16244
52-Week high 274.95
52-Week low 165.47
P/E 27.92
Mkt Cap.(Rs cr) 4,224
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OPEN 210.90
CLOSE 207.75
VOLUME 16244
52-Week high 274.95
52-Week low 165.47
P/E 27.92
Mkt Cap.(Rs cr) 4,224
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mahindra Holidays & Resorts India Ltd. (MHRIL) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present their Twenty Fifth Report together with theAudited Financial Statements of your Company for the year ended March 31 2021.

1. Operations and Financial Overview

The financial year 2020-21 started amidst strict lock down in India with severerestrictions on travel and economic activity to contain the health emergency posed by theCovid-19. As a result your Company had to progressively scale down the operations atresorts marketing events for lead generation and physical meetings with prospects. YourCompany has proactively prepared for measures to ensure the safety and well-being of itsemployees and members at the resorts. The resort standard operating procedures (SOPs) wererevised keeping in mind post-Covid norms of screening of employees and membersimplementing social distancing and maintaining high levels of sanitization and hygienestandards. Innovative new concepts and avenues for member engagement were designed toprovide experiential and safe holidays to the members. Your Company partnered with BureauVeritas a global leader in testing inspection and certification of ‘Covid Safe'protocols which certified 36 of its resorts as ‘Platinum' — its highest ratingstandard.

Once the Government of India issued guidelines on June 8 2020 the process of unlockstarted various travel restrictions were eased off and the path to recovery in travel andtourism industry kicked off. Since then the operations at the resorts started resumingand your Company has seen improvements in bookings occupancies and member additions. YourCompany has also observed changes in holidaying preferences greater interest andpreference for domestic destinations preference to travel to drivable distances andheightened expectations in terms of safety and hygiene protocols.

Despite being the most challenging year your Company registered a creditableperformance given the subdued macroeconomic environment and relatively poor consumersentiment towards discretionary spending and the trend was evident in the last twoquarters of the year under review. Your Company has taken significant cost saving measuresacross the organisation such as increasing share of referrals and digital which led toreduction in sales and marketing expenses waivers on long term leases reduction inenergy and other overheads. The Cash position has further improved during the year underreview primarily due to better management of receivables and various cost reductionactions undertaken by your Company. The creditable performance of your Company brings outthe resilience of its business model and at the same time highlights its ability to moveswiftly in tough conditions. It also underscores the trust and confidence its membersrepose in the Mahindra brand which is a crucial differentiator and contributes immenselyto your Company's performance in these uncertain times.

During the year under review your Company added 12031 new members to its vacationownership business. Addition in the members is a result of continued success of Company'spull-based digital and referral leads as well as reaching out to prospects by way ofengagement through more innovative technological platforms alliances and corporatepartnerships. In these difficult times your Company focused on the quality aspect incustomer acquisition and the virtual sales tool has also been developed by the Company fordigitally connecting with the prospects/members. During the year under review yourCompany has been reinventing its marketing strategy around digital formats and platformsas media consumption has shifted towards mobile devices.

During the year under review your Company added 9 resorts and 465 room units whichincludes launching of a 152-room flagship greenfield property at Assonora Goa. The totalinventory stands at 4197 room units across its 79 resorts as of March 31 2021. Alongwith its Finnish subsidiary Holiday Club Resorts Oy's (HCR) 33 resorts your Company isoffering the Club Mahindra members an access to over 110+ resorts in India Asia Europeand USA.

Your Company's total income (including other income) was

Rs. 90876.39 lakhs in 2020-21 compared to Rs. 103711.78 lakhs in 2019-20. ProfitBefore Tax (PBT) grew to Rs. 16946.49 lakhs in 2020-21 from Rs. 12394.74 lakhs in2019-20. Profit After Tax (PAT) grew to Rs. 12576.49 lakhs in 2020-21 from Rs. 9151.49lakhs in 2019-20 (This is before one-time re-measurement impact of

Rs. 19972.94 lakhs on account of change in Corporate tax rate). Diluted earnings pershare (EPS - prior to one-time Corporate tax impact) for 2020-21 stood at Rs. 9.46compared to Rs. 6.90 in 2019-20. Diluted earnings per share (EPS – post one-timeCorporate tax impact) for 2020-21 stood at Rs. 9.46 compared to (Rs. 8.14) in2019-20.

Further your Company's Consolidated total income (including other income) was Rs.184726.37 lakhs in 2020-21 compared to Rs. 243114.56 lakhs in 2019-20. ConsolidatedPBT was

Rs. 247.44 lakhs in 2020-21 compared to Rs. 10132.62 lakhs in 2019-20. ConsolidatedLoss After Tax was Rs. 1400.44 lakhs in 2020-21 compared to Consolidated PAT of Rs.6546.69 lakhs in 2019-20 (This is before one-time re-measurement impact of

Rs. 19972.94 lakhs on account of change in Corporate tax rate). Consolidated DilutedEPS (prior to one-time Corporate tax impact) for 2020-21 stood at (Rs. 0.98) compared toRs. 5.10 in 2019-20. Consolidated Diluted EPS (post one-time Corporate tax impact) for2020-21 stood at (Rs. 0.98) compared to (Rs. 9.94) in 2019-20.

2. Financial Highlights (Standalone)

2020 – 2021 2019 – 2020
Income:
Income from sale of Vacation Ownership and other services 82224.45 97700.53
Other Income 8651.94 6011.25
Total Income 90876.39 103711.78
Expenditure:
Less: Employee Cost & Other Expenses 62259.83 79550.94
Profit before Depreciation Interest and Taxation 28616.56 24160.84
Less: Depreciation 10374.24 10166.79
Interest 1295.83 1599.31
Profit for the year before Tax 16946.49 12394.74
Less: Provision for Tax – Current Tax - 2520.37
– Deferred Tax (net) 4370.00 722.88
Net Profit for the year after Tax excluding impact of change in tax rate 12576.49 9151.49
One-time impact on Tax Expense due to change in tax rate - 19972.94
Net Profit/ (Loss) for the year after Tax 12576.49 (10821.45)
Other Comprehensive Income / (Loss) - Net of Tax 3151.23 (54.61)
Total Comprehensive Income / (Loss) for the year 15727.72 (10876.06)

3. Share Capital

The Issued Subscribed and Paid up Share Capital of the Company as on March 31 2021was Rs. 1335537840 (Rupees One Hundred Thirty-Three Crore Fifty-Five Lakhs Thirty-SevenThousand Eight Hundred and Forty only) divided into 133553784 (Thirteen CroreThirty-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 Company did not issue shares with differentialvoting rights / sweat equity. Details of the Directors' shareholding as on March 31 2021are mentioned in the Corporate Governance Report which forms part of this Annual Report.

4. Dividend

In compliance with Regulation 43A of the Securities and Exchange Board of 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:https://www.clubmahindra.com/ corporate-governance/investor-information.

The Company had changed its revenue recognition policy in accordance with Ind AS 115during financial year 2018-19. Consequently the Deferred Revenue and Deferred Costs hadto be recomputed and has been stated as Transition Di_erence. The Company is profitableand has healthy cash flows and has declared dividends every year from 2006 till 2018. TheCompany has sought clarification from Ministry of

Corporate Affairs (MCA) that this Transition Di_erence need not be considered for thepurpose of declaration of dividend under the provisions of Section 123(1) of the CompaniesAct 2013 ("the Act"). The declaration of dividend if any shall be subject toreceipt of clarification from 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 in the ordinarycourse of business. All transactions entered with related parties during the year underreview were on arm's length basis and in the ordinary course of business. Your Company hasnot entered into any contracts / arrangements / transactions with related parties whichcould be considered material in accordance with the policy of the Company i.e. Policy onMateriality of and Dealing with Related Party Transactions ("RPT Policy").Accordingly AOC-2 is not applicable to the Company. Further transactions entered by theCompany with related parties in the normal course of business were placed before the AuditCommittee of the Board.

There were no materially significant related party transactions with the PromotersDirectors and Key Managerial Personnel which may have a potential conflict with theinterest of the Company at large.

The RPT Policy as approved by the Audit Committee and the Board is available on thewebsite of the Company at: https://www.clubmahindra.com/corporate-governance/investor-information.

Your Directors draw attention of the Members to Note No. 51 to the Standalone FinancialStatements which sets out related party disclosure.

7. Particulars of Loans and Advances Guarantees Investments and Securities

As your Company is engaged in the activity covered under Schedule VI of the Act theprovisions of Section 186 of the Act relating to loans given guarantees given orsecurities provided are not applicable to the Company. However the details of such loansgiven and guarantees given to / on behalf of subsidiary companies/ JV company are providedin Note Nos. 9 10 & 20 to the Standalone Financial Statements. These loans andguarantees for which loans are provided are proposed to be utilised by the respectiverecipients for their business purposes. Particulars of investments made by your Companyare provided in the Standalone Financial Statements at Note Nos. 7 and 16.

During the year under review your Company made a strategic investment amounting to Rs.305 lakhs by acquiring 6.67% stake in Great Rocksport Private Limited (Rocksport).Rocksport is engaged inter alia in the business of undertaking and providing outdoorentertainment adventure programs educational adventure tours and retailing of brandedadventure products in India. The investment in Rocksport will increase customer engagementavenues for the Company whereby the Company and Rocksport can engage in multiple formatsfor its members within and outside resorts of the Company.

During the year under review your Company has provided corporate guarantee of €53.27 million on behalf of MHR Holdings (Mauritius) Limited Mauritius (MHR Holdings)subsidiary company of the Company as a collateral security towards financial facilityavailed by MHR Holdings from ICICI Bank Limited to refinance the existing loans amountingto € 50.07 million availed by MHR Holdings from Axis Bank Limited. The loans fromAxis Bank Limited were availed to make investments in HCR (wholly owned subsidiary of theCompany) and the said loans were repaid during the year under review. Consequent to therepayment of loans by MHR Holdings the corporate guarantees provided by the Company toAxis Bank Limited were released by the bank.

During the year under review your Company has provided corporate guarantee of ThaiBaht 44 million on behalf of Infinity Hospitality Group Company Limited Thailand(Infinity) subsidiary company of the Company as a collateral security towards workingcapital short term loan availed by Infinity from HSBC Bank Limited.

The details of loans and advances which are required to be disclosed in the AnnualReport of the Company pursuant to Regulation 34(3) read with Schedule V of the SEBIListing Regulations are furnished separately as Annexure II to this report.

8. Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators/Courts/Tribunalwhich would impact the going concern status of the Company and its operations in thefuture.

9. Corporate Social Responsibility

Corporate Social Responsibility ("CSR") activities of the Company are guidedby its CSR Policy which is framed and approved by the Board. The Company's CSR Policy isavailable on its website at:https://www.clubmahindra.com/corporate-governance/investor-information. These arediscussed in detail in the Management Discussion and Analysis Report which forms a partof this Annual Report. The statutory disclosure with respect to CSR activities forms partof this Report and is annexed herewith as Annexure III.

10. Sustainability

In line with the philosophy of the Mahindra Group your Company is committed tofollowing sustainable practices in its operations. The details of the initiatives taken byyour Company in this regard are discussed in the section on Sustainability in theManagement Discussion and Analysis Report which forms a part of this Annual Report.

11. Business Responsibility Report

The ‘Business Responsibility Report' (BRR) of your Company for the financial year2020-21 as required under Regulation 34(2)(f) of the SEBI Listing Regulations forms partof this Annual Report.

Your Company believes that the sustainable development aims at achieving economicgrowth and improvement in well-being while preserving the natural resources and ecosystemfor future generations. Your Company also recognises the importance of sustainability andis committed to conserve the ecological integrity of its locations through responsiblebusiness practices.

12. Corporate Governance Report

A Report on Corporate Governance along with a certificate from the Statutory Auditorsof the Company regarding the compliance of conditions of corporate governance asstipulated under Schedule V of the SEBI Listing Regulations forms a part of this AnnualReport.

13. Management Discussion and Analysis Report

A detailed analysis of the Company's operational and financial performance as well asthe initiatives taken by the Company in key functional areas such as Resort OperationsMember Experience Business Excellence Human Resources and Technology & Digitisationare separately discussed in the Management Discussion and Analysis Report which forms apart of this Annual Report.

14. Whistle Blower Policy & Vigil Mechanism

As per the provisions of Section 177(9) of the Act and Regulation 22 of SEBI ListingRegulations the Company is required to establish an effective Vigil Mechanism forDirectors employees and other stakeholders to report genuine concerns. The details of theWhistle Blower Policy and Vigil Mechanism have been disclosed in the Corporate GovernanceReport which forms a part of this Annual Report.

15. Employees' Stock Options

Employees' Stock Options represent a reward system based on overall performance of theindividual employee and the Company. It helps the Company to attract retain and motivatethe best available talent. This also encourages employees to align individual performanceswith those of the Company and promotes increased participation by the employees in thegrowth of the Company.

Accordingly your Company formulated the Employees' Stock Option Schemes namely -‘Mahindra Holidays & Resorts India Limited Employee Stock Option Scheme 2006'("MHRIL ESOS 2006") and ‘Mahindra Holidays & Resorts India LimitedEmployee Stock Option Scheme 2014' ("MHRIL ESOS 2014") after obtaining requisiteapprovals from the Shareholders. All the balance shares available under MHRIL ESOS 2006together with any other shares represented by Options that may lapse for any reasonthereat was/will be considered for issuing/ granting Options to the Employees pursuant tothe provisions under MHRIL ESOS 2014.

During the year under review in order to enable its employees an opportunity toparticipate in the growth of the Company besides creating long term wealth in their handsand on the basis of the approval granted by the Shareholders at the 24th AnnualGeneral Meeting ("AGM") of the Company held on August 31 2020 your Company hasformulated the ‘Mahindra Holidays & Resorts India Limited Employee Stock OptionScheme 2020' ("MHRIL ESOS 2020") seeking to cover eligible employees of theCompany and of its holding or subsidiary company(ies). The MHRIL ESOS 2020 is administeredand implemented in accordance with the directions of the Nomination and RemunerationCommittee ("NRC") and in accordance with the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 ("SEBI SBEBRegulations").

The earlier employee stock option schemes i.e. MHRIL ESOS 2006 and MHRIL ESOS 2014shall continue to operate. During the year under review pursuant to the SEBI SBEBRegulations a total of 100000 new Options were granted under the MHRIL ESOS 2020 to aneligible employee.

Details required to be provided under Regulation 14 of the SEBI SBEB Regulations areavailable on the Company's website at: https://www.clubmahindra.com/corporate-governance/financials.

The details of Employees' Stock Options forms part of the Notes to accounts of theFinancial Statements in this Annual Report.

A certificate from the Statutory Auditors of the Company confirming that the MHRIL ESOS2006 MHRIL ESOS 2014 and MHRIL ESOS 2020 have been implemented in accordance with theSEBI SBEB Regulations and the resolutions passed by the Shareholders will be availablefor inspection by Members at the ensuing AGM.

16. SubsidiariesJointVentureandAssociate Companies

During the year under review Holiday Club Sweden AB Sweden a step-down subsidiary ofthe Company acquired the balance 49% stake in Holiday Club Sport and Spa Hotels AB andconsequently Holiday Club Sport and Spa Hotels AB has become a wholly owned subsidiary ofHoliday Club Sweden AB and in turn of the Company.

Arabian Dreams Hotel Apartments LLC Dubai (Arabian Dreams) a Joint Venture company ofthe Company is considered as a subsidiary company from Financial Year 2016-17 inaccordance with the provisions of Ind AS. Accordingly as of March 31 2021 your Companyhas 34 subsidiaries (including 28 indirect subsidiaries) 1 Joint Venture company(indirect) and 1 associate company (indirect).

17. Performance of Subsidiaries

Domestic Subsidiaries

Gables Promoters Private Limited ('Gables') is a wholly owned subsidiary of theCompany. Gables operates a resort property at Naldehra Himachal Pradesh. Your Companyavails rooms in the resort property of Gables for usage of its guests and vacationownership members.

Mahindra Hotels and Residences India Limited ('MHARIL') is a wholly owned subsidiary ofthe Company. MHARIL did not have any operations during the year under review.

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd Malaysia ('Heritage Bird') is a wholly owned subsidiary ofthe Company. Heritage Bird's principal activities are holding of investments and leasingof properties. Heritage Bird has rooms/units in apartment properties in a well-knownlocation in Kuala Lumpur Malaysia.

MH Boutique Hospitality Limited Thailand ('MH Boutique') in which your Company holdsforty-nine per cent of equity stake is a subsidiary of the Company by virtue of controlon the composition of the Board of MH Boutique and it mainly holds investments inInfinity.

Infinity is the subsidiary company of MH Boutique and by virtue of the same is alsosubsidiary of the Company. Infinity owns and operates a hotel/apartment property atBangkok Thailand. Your Company avails rooms in the hotel property of Infinity for usageof its guests and vacation ownership members.

MHR Holdings is a wholly owned subsidiary of the Company. The principal activity of MHRHoldings is to hold investments. Currently it holds investments in Covington S.?.r.l.Luxembourg (‘Covington').

Covington is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of yourCompany. The principal activity of Covington is to hold investments. Currently it holdsinvestments in HCR and HCR Management Oy (HCRM) Finland. As on March 31 2021 Covingtonholds 100% stake in HCR and HCRM.

HCR subsidiary of Covington and in turn of the Company is the largest operator ofleisure resorts in Finland and the largest vacation ownership company in Europe. As ofMarch 31 2021 HCR has 33 holiday destinations of which 25 are located in Finland 2 inSweden and 6 in Spain. These includes 7 resorts in Finland and 1 resort in Sweden with spahotel indoor water activities multiple restaurants and wide variety of leisureactivities. Apart from 62000 families and over 1300 companies owning HCR timeshare over1 million guests visit Holiday Club Spa Hotels annually.

During the year under review the Turnover of HCR was significantly impacted byCovid-19. After challenging spring months the situation stabilized during the summer andHCR returned to profitability. The pandemic situation started to deteriorate after thesummer months and had a significant adverse impact on the performance of HCR for theremainder of the financial year. During the year under review total income of HCR stoodat € 99.46 million compared to € 157.33 million in 2019-20. Earnings beforeinterest tax depreciation and amortization (EBITDA) for the year were (€ 8.88)million down from € 6.73 million in 2019-20. Overall HCR recorded a PBT and PAT of(€ 15.18) million and (€ 11.40) million respectively in 2020-21.

HCRM is a wholly owned subsidiary of Covington and in turn subsidiary of your Company.HCRM is primarily engaged in the sale and trade of real estates property managementinvestment activities and dealing in securities. Currently HCRM holds investment in theshare capital of HCR.

Arabian Dreams (a Joint Venture company as per the Act and Subsidiary company as perInd AS) operates a hotel property in Dubai (UAE) taken on lease basis. Your Company availsrooms/ apartments in the hotel property of Arabian Dreams for usage of its guests andvacation ownership members.

Associate Company

Kiinteist? Oy Seniori-Saimaa is an associate of HCR and consequently associate ofyour Company.

Joint Venture Company

Tropiikin Rantasauna Oy is a Joint Venture company (JV) of HCR and consequently JV ofyour Company.

A report on the performance and financial position of the subsidiaries associate andjoint venture company whose financial statements are considered for preparation ofConsolidated Financial Statements of the Company as per the Act (in the prescribed formati.e. "Form AOC-1") is provided as Annexure to the Consolidated FinancialStatements.

The Policy for Determining Material Subsidiaries as approved by the Board may beaccessed on the Company's website at: https://www.clubmahindra.com/corporate-governance/investor-information.

In accordance with the third proviso to Section 136(1) of the Act the Annual Report ofthe Company containing therein its Standalone and the Consolidated Financial Statementsare available on the Company's website https://www. clubmahindra.com/. Further as perfourth proviso to the said Section the Audited Annual Financial Statements of each of thesaid subsidiaries of the Company are also available on the Company's websitehttps://www.clubmahindra.com/. Any Shareholder who may be interested in obtaining a copyof the aforesaid documents may write to the Company Secretary at the Company's CorporateOffice.

18. Directors

As on the date of this report your Company has 9 Directors which includes 5Independent Directors 3 Non-Executive Non-Independent Directors (NEDs) and 1 ManagingDirector (ED).

Based on the recommendation of the NRC the Board of Directors at their meeting held onMay 9 2020 have appointed Dr. Anish Shah as an Additional Director in the categoryof Non-Executive Non-Independent Director of the Company liable to retire by rotation.The Shareholders of the Company at their 24th AGM held on August 31 2020approved the appointment of Dr. Anish Shah as a Non-Executive Non-Independent Director ofthe Company.

Further Shareholders of the Company at their 24th AGM held on August 312020 have approved the appointment of

Mrs. Sangeeta Talwar as an Independent Director of the Company for a term of 5 (five)consecutive years commencing from February 1 2020 to January 31 2025.

Based on the recommendation of the NRC the Board of Directors have appointed Mr.Diwakar Gupta as an Additional Director in the category of an Independent Director of theCompany not liable to retire by rotation for a period of 5 (five) consecutive years witheffect from December 1 2020 to November 30 2025. He shall hold office as an AdditionalDirector upto the date of the ensuing AGM. The Company has received the requisite Noticein writing from a Member under Section 160 of the Act proposing his candidature for theoffice of Director of the Company.

Further based on the recommendation of the NRC the Board of Directors at theirmeeting held on January 25 2021 have appointed Mr. Ruzbeh Irani as an Additional Directorin the category of Non-Executive Non-Independent Director of the Company liable to retireby rotation with effect from January 26 2021. He shall hold office as an AdditionalDirector upto the date of the ensuing AGM. The Company has received the requisite Noticein writing from a Member under Section 160 of the Act proposing his candidature for theoffice of Director of the Company.

As informed in the previous Annual Report Mr. Cyrus Guzder ceased to hold office as anIndependent Director of the Company with effect from August 1 2020 upon completion ofhis tenure as approved by the Shareholders. Further during the year under review Mr. V SParthasarathy has resigned as a Non-Executive Non-Independent Director of the Company witheffect from January 25 2021. The Board placed on record its sincere appreciation for thevaluable contributions made by Mr. Cyrus Guzder and Mr. V S Parthasarathy during theirassociation with the Company.

In terms of the Articles of Association of the Company and as per Section 152(6) of theAct Mr. Arun Nanda being longest in the office is liable to retire by rotation at theensuing AGM and being eligible offers himself for re-appointment.

The Notice convening the forthcoming AGM will include the proposal for theappointment/re-appointment of the aforesaid Directors. A brief resume of the Directorsseeking appointment at the forthcoming AGM and other details as required to be disclosedin terms of Regulation 36(3) of the SEBI Listing Regulations and Secretarial Standard onGeneral Meetings (SS-2) forms part of the Corporate Governance Report which forms a partof this Annual Report and will also be annexed to the Notice of AGM.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand SEBI Listing Regulations.

Further the Independent Directors of the Company have also confirmed that they haveregistered themselves with the Indian Institute of Corporate Affairs Manesar and haveincluded their name in the databank of Independent Directors within the statutory timelinepursuant to the provisions of Rule 6(3) of the Companies (Appointment and Qualificationsof Directors) Rules 2014.

19. Key Managerial Personnel (KMPs)

As on March 31 2021 Mr. Kavinder Singh Managing Director

& CEO Mrs. Akhila Balachandar Chief Financial Officer and Mr. DhanrajMulki General Counsel & Company Secretary were the KMPs as per the provisions of theAct.

The Board at its meeting held on May 25 2021 accepted the resignation of Mrs. AkhilaBalachandar as the Chief Financial Officer of the Company with effect from May 31 2021.Consequently Mrs. Akhila Balachandar ceased to be the KMP of the Company from the closeof business hours on May 31 2021. The Board placed on record its sincere appreciation forthe valuable contributions made by Mrs. Akhila Balachandar during her association with theCompany.

The Board at its meeting held on May 25 2021 on the recommendation of the AuditCommittee and NRC approved the appointment of Mr. Sujit Vaidya as the Chief FinancialOfficer of the Company and designated him as the KMP of the Company with effect from June1 2021.

20. StatementregardingopinionoftheBoard with regard to integrity expertise andexperience (including the proficiency) of the Independent Directors appointed during theyear

During the year under review Mr. Diwakar Gupta has been appointed as an IndependentDirector of the Company with effect from December 1 2020 subject to the approval ofShareholders. The Board is satisfied with the integrity expertise and experience(including the proficiency) of Mr. Diwakar Gupta who has been appointed as an IndependentDirector of the Company with effect from December 1 2020.

Regarding the experience which includes proficiency test Mr. Diwakar Gupta is exemptedfrom undertaking the proficiency test in accordance with Rule 6(4) of the Companies(Appointment and Qualifications of Directors) Rules 2014.

21. Policy on Directors' appointment and remuneration

The salient features of the following policies of the Company are attached herewith andmarked 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 The aforesaidpolicies are also available at the link https://www.clubmahindra.com/corporate-governance/investor-information.

The Managing Director & CEO of the Company does not receive remuneration orcommission from any of its subsidiaries and draws remuneration only from the Company.

22. Board Evaluation

The Board has conducted an annual evaluation of its own performance individualDirectors Committees of the Board and that of its Non-Executive Chairman in terms of therelevant provisions of the Act Rules made thereunder and SEBI Listing Regulations. Themanner in which the evaluation was conducted by the Company has been explained in theCorporate Governance Report which forms a part of this Annual Report.

23. Number of Board Meetings

During the year under review the Board of Directors met 6 (six) times. The details ofthe Board Meetings and attendance of Directors are provided in the Corporate GovernanceReport which forms a part of this Annual Report.

24. Composition of Audit Committee

The Audit Committee consists of Mr. Sridar Iyengar as its Chairman and Mr. Sanjeev AgaMr. Rohit Khattar Mr. Diwakar Gupta and Mr. Ruzbeh Irani as its other members. Furtherdetails are provided in the Corporate Governance Report which forms a part of this AnnualReport.

25. 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 2021 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 2021 and of the profit of theCompany for the year ended on that date;

c) they 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 annual accounts have been prepared 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 were operatingeffectively; and

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

26. Internal Financial Controls and their Adequacy

Your Company has an adequate internal controls system commensurate with the size andnature of its business. The system is supported by documented policies guidelines andprocedures to monitor business and operational performance which are aimed at ensuringbusiness integrity and promoting operational efficiency. Further details are provided inthe Management Discussion and Analysis Report which forms a part of this Annual Report.

During the year under review the Statutory Auditors and Secretarial Auditor have notreported any instances of frauds committed in the Company by its Officers or Employees tothe Audit Committee under Section 143(12) of the Act details of which needs to bementioned in this Report.

27. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries associateand joint venture companies prepared in accordance with the Act and applicable AccountingStandards form part of this Annual Report.

For the purpose of preparation of the Consolidated Audited Financial Statements of theCompany for the financial year ended March 31 2021 as per Ind AS the latest auditedfinancial results of all the subsidiaries one associate company and one Joint Venturecompany pertaining to HCR were considered and consolidation was done as per the provisionsof Section 129 of the Act.

28. Risk Management

Your Company has a well-defined risk management framework to identify and evaluateelements of business risk. The Board of Directors have constituted the Risk ManagementCommittee pursuant to the provisions of Regulation 21 of the SEBI Listing Regulations andits prime responsibility is to oversee the implementation of the Risk Management Policy ofthe Company. The Audit Committee has an oversight in the area of financial risk andcontrols. Other details including details pertaining to various risks faced by yourCompany and also development and implementation of risk management framework are discussedin the Management Discussion and Analysis Report forming part of this Annual Report.

29. Disclosure requirements

Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulationsdetails of transactions with persons or entities belonging to the promoter/ promoter groupwhich holds 10% or more shareholding in the Company are furnished under Note No. 51 tothe Standalone Financial Statements which sets out related party disclosure.

The provisions in respect of maintenance of cost records as specified undersub-section (1) of Section 148 of the Act are not applicable to your Company.

The Directors have devised proper systems to ensure compliance with the provisionsof all applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.

During the year under review no revision was made in the previous financialstatements of the Company.

30. Auditors

A) Statutory Auditors

The Shareholders at their 21st AGM held on August 2 2017 approved theappointment of M/s B S R & Co. LLP Mumbai (ICAI membership No:101248W/W-100022) asthe Statutory 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.

Pursuant to Notification issued by MCA on May 7 2018 amending Section 139 of the Actthe mandatory requirement for ratification of appointment of Auditors by the Shareholdersat every 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 the Company forthe year ended March 31 2021 is unmodified i.e. it does not contain any qualificationreservation or adverse remark. The Auditors' Report is enclosed with the financialstatements forming part of the Annual Report.

B) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and Rules thereunder the Companyhas appointed M Siroya and

Company Practicing Company Secretaries to undertake the secretarial audit of theCompany. The Report of the Secretarial Auditor is annexed herewith as Annexure V. Thereare no qualifications reservations or adverse remarks made by M Siroya and CompanyPracticing Company Secretaries Secretarial Auditor of the Company in the SecretarialAudit Report.

31. Deposits

Your Company has not accepted any deposits from public or its employees and as such noamount on account of principal or interest on deposit were outstanding as of the BalanceSheet date.

32. Credit Rating

India Ratings and Research Private Limited ("India Ratings") has re-afirmedLong-Term Issuer Rating of ‘IND A' with a stable outlook to your Company. The‘IND A' rating indicates adequate degree of safety regarding timely servicing offinancial obligations. India Ratings continues to take a consolidated view of the Companyand its subsidiaries including HCR Finland to arrive at the ratings.

33. Material Changes and Commitment Affecting Financial Position of the Company

There are no material changes and commitments affecting financial position of theCompany which have occurred between the end of the financial year of the Company i.e.March 31 2021 and the date of the Directors' Report. The Company's response to thesituation arising from the pandemic has been explained in the Management Discussion andAnalysis Report forming part of this Annual Report.

34. Annual Return

Pursuant to the Notification issued by MCA with effect from August 28 2020 themandatory requirement of attaching an extract of the Annual Return in the prescribed formMGT-9 has been omitted.

Accordingly as per the provisions of the amended Section 92(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 the Annual Return asof March 31 2021 has been placed on the website of the Company and can be accessed athttps://www.clubmahindra.com/ corporate-governance/financials.

35. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

Your Company continuously strives to conserve energy adopt environment friendlypractices and employ technology for more efficient operations. Some of these initiativesare discussed in the section on Sustainability in the Management Discussion and AnalysisReport which forms a part of this Annual Report.

The particulars relating to energy conservation technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act and Rule 8(3)of the Companies (Accounts) Rules 2014 are given in the Annexure VI to this Report.

36. Human Resources

Your Company takes pride in the commitment competence and dedication shown by itsemployees in all areas of its business. It considers people as its biggest assets. It hasput concerted efforts in talent management strong performance management and learning andtraining initiatives to ensure that your Company consistently develops inspiring strongand credible leadership. Apart from continued investment in skill and leadershipdevelopment of its people this year your Company has also focused on employee engagementinitiatives aimed at increasing the Culture of Innovation and Collaboration across allstrata of the workforce. Your Company has also been certified as one of India's GreatPlaces to Work For and recognised amongst the Top 100 ‘Best companies to work for inIndia' by Great Place To Work (GPTW) Institute. These are discussed in detail in theManagement Discussion and Analysis Report forming part of this Annual Report. The Companyhas a Policy on Prohibition Prevention and Redressal of Sexual Harassment of Women atWorkplace and matters connected therewith or incidental thereto covering all the aspectsas contained under The Sexual Harassment of Women at Workplace (Prohibition Preventionand Redressal) Act 2013 ("POSH Act"). The Company has also complied withprovisions relating to the constitution of Internal Complaints Committee under the POSHAct and the Committee includes external members from NGO and / or members with relevantexperience. There were no complaints pending at the beginning of the year. During the yearunder review the Company received 4 complaints under the Policy which were disposed-o_and appropriate actions were taken within the statutory timelines. Further there were nocomplaints pending for more than 90 days during the year.

37. Particulars of Employees

The disclosure with respect to the remuneration of Directors KMPs and employees underSection 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 ("the Rules") is attached asAnnexure VII and forms a part of this report.

The Company had 9 (nine) employees who were employed throughout the year and were inreceipt of remuneration of more than Rs. 102 lakhs per annum. There was no employeeemployed for part of the year by the Company who was in receipt of remuneration of morethan Rs. 8.50 lakhs per month. In terms of Section 136 of the Act the copy of theFinancial Statements of the Company including the Consolidated Financial Statements theAuditor's Reports and relevant Annexures to the said Financial Statements and Reports arebeing sent to the Members and other persons entitled thereto excluding the information inrespect of the said employees containing the particulars as specified in Rule 5(2) of thesaid Rules. If any Member is interested in obtaining a copy thereof he may write to theCompany Secretary of the Company at its Corporate Office.

The Financial Statements Reports etc. of the Company are available on the website ofthe Company https://www. clubmahindra.com/.

38. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company's Customers ShareholdersVendors Bankers Financial Institutions and the Central and State Governments for theirunstinted support. The Directors would like to place on record their appreciation toemployees at all levels for their hard work dedication commitment and valuableperformance during the challenging times.

For and on behalf of the Board
Arun Nanda
Place: Mumbai Chairman
Date: July 10 2021 DIN: 00010029

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