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Your Directors are pleased to present their Twenty Third Report together with the Audited Financial Statements of your Company for the year ended March 31, 2019.
1. Operations and Financial Overview
During the financial year 2018-19, your Company has registered a steady growth in memberships as well as in resort incomes. This, coupled with eciency gains across the operations, has allowed your Company to register credible results in the financial year 2018-19. Your Company added 18,377 new members to its vacation ownership business, taking the total membership to over 2.43 lakhs at the end of the year. The growth in the member addition is a result of continued success of Companys pull-based digital and referral leads as well as tapping of prospects by way of engagement through innovative platforms, alliances and corporate partnerships. During the year under review, the Company has also focussed on reinventing its marketing and brand building campaigns to bring alive the Club Mahindra experience and generate a pull for the brand by making it more aspirational and exciting. Your Company added 6 resorts during the year under review, taking the total inventory to 3,595 units across its 61 resorts as of March 31, 2019. During the year under review, your Company has increased its stake in Holiday Club Resorts Oy, Finland (HCR) from 95.16% to 96.47% on account of acquisition of additional shares in line with the agreements executed with the shareholders of HCR and conversion of loans into equity.
The accounts of the Company upto the financial year ended March 31, 2018, were prepared in accordance with the provisions of Indian Accounting Standard ("Ind AS") 18, where non-refundable admission fees of 60% was accounted for as income in the year of sale. The Ministry of Corporate Affairs (MCA) vide its notification dated March 28, 2018 has mandated that from April 1, 2018, the accounts of the Company have to be prepared in accordance with Ind AS 115. As per this new standard Ind AS 115, income from vacation ownership contracts needs to be recognised over the tenure of membership and only incremental costs incurred for obtaining the membership are deferred 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 the financial year ended March 31, 2019, have been prepared in accordance with the Ind AS as prescribed under Section 133 of the Companies Act, 2013 ("the Act") read with the relevant rules issued thereunder and other accounting principles generally accepted in India. Accordingly, the Company has applied the modified retrospective approach as per para C3(b) of Ind AS 115 to contracts that were not completed as on April 1, 2018 and the cumulative effect of applying Ind AS 115 is recognized at the date of initial application i.e. April 1, 2018 in accordance with para C7 of Ind AS 115 as an adjustment to other equity. The transitional adjustment in standalone books of Rs. 1,21,044.68 lakhs (net of deferred tax) has been stated as Transition Difference under other equity based on the requirements of the Ind AS 115. Further, due to application of Ind AS 115, membership fees and incremental cost to obtain and / or fulfill a contract with a customer, as applicable, is recognized over the effective membership period.
Considering the change in the applicable Ind AS, the financial results presented for the year ended March 31, 2019 (as per Ind AS 115), are not comparable with the financial results presented for the year ended March 31, 2018 (as per Ind AS 18 and which have not been restated).
As at September 30, 2018, the Company has changed its accounting policy with respect to measurement of freehold land. According to the revised policy, freehold land is revalued and measured at fair value, based on periodic valuation done by external independent valuer using market approach. The revaluation surplus is recorded in Other Comprehensive Income and is credited to Revaluation reserve in other equity. This revaluation surplus is not available for distribution to shareholders. The carrying value of freehold land as at March 31, 2019 under revaluation model is Rs. 1,12,875.64 lakhs and as per cost model is Rs. 16,714.49 lakhs.
During the year under review, your Companys total income (including other income) was Rs. 96,343.85 lakhs, Profit After Tax (PAT) was Rs. 6,386.23 lakhs and Diluted earnings per share (EPS) stood at Rs. 4.80.
Further, your Companys consolidated total income (including other income) was Rs. 2,29,566.05 lakhs, consolidated PAT was
Rs. 5,957.19 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 from sale of Vacation Ownership and other services||91,829.15||1,06,418.57|
|Less: Employee Cost & Other Expenses||81,183.92||83,219.30|
|Profit before Depreciation, Interest and Taxation||15,159.93||26,199.73|
|Profit for the year before Tax||10,017.24||20,715.32|
|Less: Provision for Tax Current Tax||2,201.66||6,558.88|
| Deferred Tax (net)||1,429.35||720.57|
|Net Profit for the year after Tax||6,386.23||13,435.87|
|Other Comprehensive Income (Net of Tax)||73,921.20||(71.57)|
|Total Comprehensive Income||80,307.43||13,364.30|
3. Share Capital
During the year under review, the Company has allotted 1,10,000 equity shares of Rs. 10 each to the eligible employees pursuant to exercise of stock options granted under the Companys Employee Stock Option Scheme - 2014. Consequent to the aforesaid allotments, the Issued, Subscribed and Paid up Share Capital of the Company as on March 31, 2019 was Rs. 133,55,37,840 (Rupees One Hundred Thirty Three Crore Fifty Five Lakhs Thirty Seven Thousand Eight Hundred and Forty only) divided into 13,35,53,784 (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 Company did not issue shares with differential voting rights / sweat equity. Details of Directors shareholding as on March 31, 2019, are mentioned in the Corporate Governance Report, which forms part of this Annual Report.
In compliance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend Distribution Policy of the Company is annexed herewith as Annexure I and is also available at the Companys website at: http://www.clubmahindra.com/about-us/policies As explained above, with the adoption of new revenue recognition policy in accordance with Ind AS 115, the Company had to change its revenue recognition policy. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and has been stated as Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year since 2006. The Company is seeking a clarification from MCA that, this Transition Difference need not be considered for the purpose of declaration of dividend under the provisions of Section 123(1) of the Act. The declaration of dividend, if any, shall be subject to receipt 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 ordinary course of business. All transactions entered with related parties during the year under review are on arms length basis and in the ordinary course of business. Your Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions ("RPT Policy"). Accordingly, AOC-2 is not applicable to the Company. Further, transactions entered by the Company with related parties in the normal course of business were placed before the Audit Committee of the Board.
There were no materially significant related party transactions with the Promoters, Directors and Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.
The RPT Policy as approved by the Audit Committee and the Board is available on the website of the Company at: http://www.clubmahindra.com/about-us/policies Your Directors draw attention of the members to Note No. 46 to the Standalone Financial Statements 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, the provisions of Section 186 of the Act relating to loans given, investments made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans given and guarantees given to / on behalf of subsidiary companies / JV company are provided in the Note Nos. 8, 9 and 17 to the Standalone Financial Statements. These loans and guarantees for which loans are provided are proposed to be utilised by the respective recipients for their business purposes. Particulars of investments made by your Company are provided in the Standalone Financial Statements at Note Nos. 6 and 13. During the year under review, your Company has provided Corporate Guarantee of Euro 5 million on behalf of MHR Holdings (Mauritius) Limited, Mauritius ("MHR Holdings"), subsidiary company of the Company as a collateral security towards the financial facilities availed by MHR Holdings from a Bank.
The details of loans and advances which are required to be disclosed in the Annual Report of the Company pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing 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/Tribunal which would impact the going concern status of the Company and its operations in the future.
9. Corporate Social Responsibility
Corporate Social Responsibility ("CSR") activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. The Companys 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 Report, which forms a part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this Report and is annexed herewith as Annexure III.
In line with the philosophy of the Mahindra Group, your Company is committed to following sustainable practices in its operations. The details of the initiatives taken by your Company in this regard are discussed in the section on Sustainability in the Management 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 year 2018-19, as required under Regulation 34(2)(f) of the SEBI Listing Regulations, forms part of this Annual Report. Your Company believes that the sustainable development aims at achieving economic growth and improvement in well-being while preserving the natural resources and ecosystem for future generations. Your Company also recognises the importance of sustainability and is committed to conserve the ecological integrity of its locations through responsible business practices.
12. Corporate Governance Report
A Report on Corporate Governance along with a certificate from the Statutory Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations forms a part of this Annual Report. Further, a certificate from M/s M. Damodaran & Associates, Practicing Company Secretary confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by SEBI/MCA or any such statutory authority, is attached to the Corporate Governance Report.
13. Management Discussion and Analysis Report
A detailed analysis of the Companys operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Resort Operations, Member Experience, Business Excellence, Human Resources and Technology & Digitisation are separately discussed in the Management Discussion and Analysis 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 of SEBI Listing Regulations, the Company is required to establish an effective Vigil Mechanism for Directors, employees and other stakeholders to report genuine concerns. The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Corporate Governance Report, which forms a part of this Annual Report.
15. Employees Stock Options
Employees Stock Options represent a reward system based on overall performance of the individual employee and the Company. It helps the Company to attract, retain and motivate the best available talent. This also encourages employees to align individual performances with the Company and promotes increased participation by the employees in the growth of the Company. Accordingly, your Company formulated the Employees Stock Option Scheme in 2006 (2006 Scheme) and subsequently in 2014 (2014 Scheme) after obtaining requisite approvals from the shareholders. All the balance shares available under 2006 Scheme together with any other shares represented by Options that may lapse for any reason thereat, was/will be considered for issuing/granting Options to the Employees pursuant to the provisions under the 2014 Scheme. During the year under review, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI ESOP Regulations") no new options were granted under 2014 Scheme.
Details required to be provided under Regulation 14 of SEBI ESOP Regulations is available on the Companys website at: http://www.clubmahindra.com/about-us/investor-relations/ financials The details of Employees Stock Options forms part of the Notes to accounts of the Financial Statements in this Annual Report. A certificate from the Statutory Auditors of the Company confirming that the 2006 Scheme and 2014 Scheme have been implemented in accordance with the SEBI ESOP Regulations and the resolution passed by the Shareholders, will be placed at the ensuing Annual General Meeting for inspection by members.
16. Subsidiaries, Joint Venture and Associate Companies
During the year under review, your Company through its subsidiary Covington S..r.l, Luxembourg, increased its equity stake in Holiday Club Resorts Oy, Finland (HCR) from 95.16% to 96.29% in August 2018 and further to 96.47% in November 2018.
Further, Holiday Club Canarias Investments S.L.U., a step down subsidiary of the Company, acquired 100% stake in Passeport Sante SLU ("Passeport"). Accordingly, Passeport has become a step-down subsidiary of the Company. Also, Kiinteist Oy Himoksen Thti 2 has been merged with HCR and consequently, has ceased to be a subsidiary of the Company.
During the year, HCR has sold its entire 49% stake in Kiinteist Oy Sallan Kylpyl (Kiinteist) and consequently, Kiinteist has ceased to be an associate of HCR and in turn of the Company.
Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams), a Joint Venture company of the Company, is considered as subsidiary company from Financial Year 2016-17 in accordance with the provisions of Indian Accounting Standards. Accordingly, as of March 31, 2019, your Company has 36 subsidiaries (including 30 indirect subsidiaries), 1 Joint Venture company (indirect) and 2 associate companies (including 1 indirect associate).
17. Performance of Subsidiaries
Gables Promoters Private Limited (Gables), is a wholly owned subsidiary of the Company. Gables operates a resort property of 115 rooms at Naldehra, Himachal Pradesh. Your Company avails rooms in the resort property of Gables for usage of its guests and vacation ownership members.
Mahindra Hotels and Residences India Limited (MHARIL) is a wholly owned subsidiary of the Company. MHARIL did not have any operations during the year under review.
Heritage Bird (M) Sdn. Bhd, Malaysia (Heritage Bird) is a wholly owned subsidiary of the Company. Heritage Birds principal activities are holding of investments and leasing of properties. Heritage Bird has rooms/units in apartment properties in a well-known location in Kuala Lumpur, Malaysia.
MH Boutique Hospitality Limited, Thailand (MH Boutique), in which your Company holds forty nine per cent of equity stake, is a subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand (Infinity).
Infinity is the subsidiary company of MH Boutique and by virtue of the same is also subsidiary of the Company. Infinity owns and operates a hotel/apartment property at Bangkok, Thailand. Your Company avails rooms in the hotel property of Infinity for usage of its guests and vacation ownership members.
MHR Holdings (Mauritius) Limited, Mauritius (MHR Holdings), is a wholly owned subsidiary of the Company. The principal activity of MHR Holdings 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 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 March 31, 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 largest operator of leisure hotels in Finland and the largest vacation ownership company in Europe. As of March 31, 2019, HCR has 33 resorts of which 25 are located in Finland, 2 in Sweden and 6 in Spain and the same are fully operational. Further, out of these, 7 resorts in Finland and 1 resort in Sweden have a spa hotel attached.
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 management, investment activities and dealing in securities. Currently, HCRM holds investment in the share capital of HCR.
Arabian Dreams, (a Joint Venture company as per the Act and Subsidiary company as per Ind AS) operates 75 room hotel property in Dubai (UAE) taken on lease basis. Your Company avails rooms/apartments in the hotel property of Arabian Dreams for usage 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, as the Company is holding more than 20 per cent of total share capital which includes preference share capital. Guestline did not have any operations during the year under review.
Kiinteist Oy Seniori-Saimaa is an associate of HCR and consequently associate of your Company.
Joint Venture Company
Tropiikin Rantasauna Oy is a Joint Venture company (JV) of HCR and consequently JV of your Company.
A report on the performance and financial position of the subsidiaries, associate and joint venture company whose financial statements are considered for preparation of Consolidated Financial Statements of the Company as per the Act (in the prescribed format i.e. "Form AOC-1") is provided as Annexure to the Consolidated Financial Statements. The policy for determining material subsidiaries as approved by the Board may be accessed on the Companys website at: http://www.clubmahindra.com/about-us/policies In accordance with the third proviso to Section 136(1) of the Act, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements are available on the Companys website www.clubmahindra. com. Further, as per fourth proviso to the said Section, the Audited Annual Accounts of each of the said subsidiaries of the Company are also available on the Companys website www.clubmahindra.com. Any Shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Companys Corporate Office. Further, the said documents will be available for examination by the Shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon upto the date of the ensuing Annual General Meeting.
As on March 31, 2019, your Company had 8 Directors, which includes 5 Independent Directors, 2 Non-Executive Directors and 1 Managing Director.
As informed in the previous Annual Report, Mr. Vineet Nayyar, Non-Executive Director of the Company did not seek re-appointment at the 22nd Annual General Meeting held on
August 2, 2018 and consequently ceased to be a Director of the Company with effect from August 2, 2018. The Board places on record its sincere appreciation for the contributions made by Mr. Vineet Nayyar during his association with the Company.
In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Mr. Arun Nanda, being longest in the Office, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Based on the recommendation of the Nomination and Remuneration Committee ("NRC") and subject to the approval of the Shareholders, the Board of Directors 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 approved remuneration payable to Mr. Kavinder Singh.
Further, NRC at its Meeting held on May 15, 2019 and vide circular resolution passed on June 22, 2019 on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Rohit Khattar, Mr. Sanjeev Aga, Mr. Sridar Iyengar and Mr. Cyrus Guzder during their tenure, has recommended to the Board that continued association of Mr. Rohit Khattar, Mr. Sanjeev Aga, Mr. Sridar Iyengar and Mr. Cyrus Guzder as Independent Directors of the Company would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board at its meeting held on May 15, 2019 and vide circular resolution passed on June 24, 2019 has recommended: (a) Re-appointment of Mr. Rohit Khattar and Mr. Sanjeev Aga, as Independent Directors of the Company, not liable to retire by rotation, to hold Office for a second term of five years each commencing from August 27, 2019 to August 26, 2024.
(b) Re-appointment of Mr. Sridar Iyengar, as an Independent Director of the Company, not liable to retire by rotation, to hold Office for a second term commencing from August 27, 2019 to July 31, 2022.
(c) Re-appointment of Mr. Cyrus Guzder, as an Independent Director of the Company, not liable to retire by rotation, to hold Office for a second term commencing from August 27, 2019 to July 31, 2020. The Notice convening forthcoming Annual General Meeting ("AGM") includes the proposal for re-appointment of aforesaid Directors. A brief resume of the Directors seeking re-appointment at the forthcoming AGM and other details as required to be disclosed in terms of Regulation 36(3) of the SEBI Listing Regulations and Secretarial Standard on General
Meetings (SS-2) forms part of the Corporate Governance Report and is also annexed to the Notice.
The Company has received notices in writing from the Shareholders of the Company under Section 160(1) of the Act proposing the candidature of Mr. Kavinder Singh, Mr. Rohit Khattar, Mr. Sanjeev Aga, Mr. Sridar Iyengar and Mr. Cyrus Guzder for the Office of Director of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and SEBI Listing Regulations.
19. Key Managerial Personnel (KMPs)
During the year under review, Mr. Nirav Momaya, Deputy Company Secretary was appointed as an Interim Company Secretary and Compliance Officer of the Company on September 28, 2018. Further, the Board of Directors at their meeting held on October 29, 2018, pursuant to the recommendation of NRC, appointed Mr. Dhanraj Mulki as the General Counsel & Company Secretary as well as Compliance Officer and KMP of the Company with effect from the date of the meeting. Consequently, Mr. Nirav Momaya was re-designated as Deputy Company Secretary of the Company with effect from the said 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 provisions of the Act.
20. Policy on Directors appointment and remuneration
The salient features of the following policies of the Company and changes 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 The aforesaid policies (as amended) are also available at the link http://www.clubmahindra.com/about-us/policies The Managing Director & CEO of the Company does not receive remuneration or commission from any of its subsidiaries and draws remuneration only from the Company.
21. Board Evaluation
The Board has conducted an annual evaluation of its own performance, individual Directors, Committees of the Board and that of its Non-Executive Chairman, in terms of the relevant provisions of the Act, Rules made thereunder and SEBI Listing Regulations. The manner in which the evaluation was conducted by the Company has been explained 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 the Corporate 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 and Mr. 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 Corporate Governance 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, the applicable Accounting Standards had been followed and there is no material departure; b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the year ended on that date; c) they have taken proper and sucient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and f) the directors have devised proper systems to ensure compliance with the provisions of all 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, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational eciency. Further details are provided in the
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 not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which need to be mentioned in this Report.
26. Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its subsidiaries, associate and joint venture companies prepared in accordance with the Act and applicable Accounting Standards form part of this Annual Report.
For the purpose of preparation of the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2019 as per Ind AS, the latest audited financial results of all the subsidiaries, one associate company and one Joint Venture company pertaining to HCR were considered and consolidation was done as per the provisions of Section 129 of the Act.
27. Risk Management
Your Company has a well-defined risk management framework to identify and evaluate elements of business risk. The Audit Committee has an oversight in the area of financial risk and controls. Other details including details pertaining to various risks faced by your Company and also development and implementation of risk management framework are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.
28. Disclosure requirements
Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, details of transactions with persons or entities belonging to the promoter/ promoter group which hold 10% or more shareholding in the Company, are furnished under Note No. 46 to the Standalone Financial Statements which sets out related party disclosure.
The provisions in respect of maintenance of cost records as specified under sub-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 provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
During the year under review, no revision was made in the previous financial 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 the Statutory Auditors of the Company for a period of 5 (five) years commencing from the conclusion of the 21st AGM till the conclusion of 26th AGM, subject to ratification of their appointment by the Members at every AGM of the Company. Pursuant to Notification issued by the MCA on May 7, 2018 amending Section 139 of the Act, the mandatory requirement for ratification of appointment of Auditors by the Shareholders at every AGM has been omitted. Accordingly, the Shareholders at their 22nd AGM held 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 22nd AGM to hold Office until the conclusion of the 26th AGM of the Company to be held in the year 2022. The Auditors Report on the financial statements of the Company for the year ending March 31, 2019 is unmodified i.e. it does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with the financial statements forming part of the annual report.
B) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed M Siroya and Company, Practicing Company Secretaries to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure V. There are no qualifications, reservations or adverse remarks made by M Siroya and Company, Practising Company Secretaries, Secretarial Auditor of the Company in the Secretarial Audit Report.
Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of 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 your Company. The IND A rating indicates adequate degree of safety regarding timely servicing of financial obligations. India Ratings continues to take a consolidated view of the Company and its subsidiaries, including HCR, Finland, to arrive at the ratings.
32. Material Changes and Commitment Aecting Financial Position of the Company
There are no material changes and commitments, affecting financial position of the Company which have occurred between the end of the financial year of the Company 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 of the Companies (Management and Administration) Rules, 2014 as amended from time to time, the extract of the Annual Return as of March 31, 2019, in the prescribed form MGT- 9 is annexed herewith as Annexure VI. The Annual Return of the Company has been placed on the website of the Company and can be accessed at http://www.clubmahindra.com/about-us/investor-relations/financials.
34. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more ecient operations. Some of these initiatives are discussed in the section on Sustainability in the Management Discussion and Analysis Report, which forms a part of this Annual Report. The particulars relating to energy conservation, technology absorption and foreign exchange 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 VII to this Report.
35. Human Resources
Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, this year your Company has also focused on employee engagement initiatives aimed at increasing the Culture of Innovation & Collaboration across all strata of the workforce. This year the Employee Engagement Scores as reflected through MCARES survey (an internal benchmarking exercise within the Mahindra Group) has been the highest ever for your Company. Your Company has also been certified as one of Indias Great Places to Work For 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 Analysis Report forming part of this Annual Report.
The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013 ("POSH Act"). The Company has also complied with provisions relating to the constitution of Internal Complaints Committee under the POSH Act and the Committee includes external members from NGO and / or members with relevant experience. There was one complaint pending at the beginning of the year. During the year under review, the Company received four complaints under the Policy. All the complaints were disposed-off and appropriate actions were taken in all cases within the statutory timelines. Further, there were no complaints pending for more than 90 days during the year.
36. Particulars of Employees
The disclosure with respect to the remuneration of Directors, KMPs and employees under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the Rules"), is attached as Annexure VIII and forms a part of this report.
The Company had 9 (Nine) employees who were employed throughout the year and were in receipt of remuneration more than Rs. 102 lakhs per annum. There was no employee 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 Financial Statements of the Company, including the Consolidated Financial Statements, the Auditors Report and relevant Annexures to the said Financial Statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Companys Registered Office during all working days except on Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Company at its Registered/Corporate Office. The Financial Statements, reports etc. of the Company are available on the website of the Company www.clubmahindra. com.
37. Acknowledgement and Appreciation
Your Directors take this opportunity to thank the Companys Customers, Shareholders, Suppliers, Bankers, Financial Institutions and the Central and State Governments for their unstinted support. The Directors would like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.
|For and on behalf of the Board|
|June 24, 2019||DIN: 00010029|