Mahindra Holidays & Resorts India Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present their Twenty Fourth Report together with the Audited Financial Statements of your Company for the year ended March 31, 2020.

1. Operations and Financial Overview

During the financial year 2019-20, your Company has registered a creditable performance given the subdued macroeconomic environment and relatively poor consumer sentiment towards discretionary purchases which was evident in the first three quarters of the year. The outbreak of Coronavirus (COVID-19) pandemic has caused significant slowdown of economic activity in March 2020. Traditionally, March is a peak month for your Company, but due to COVID-19, the business operations of your Company have been adversely affected specially, new Member Additions and Resort Operations. During the latter part of March 2020, the Management took the decision for phased closing of resorts considering the safety of members and employees of your Company, which affected the resort occupancies. Resort income declined due to cancellation of bookings in March 2020.

During the year under review, your Company added 15,697 new members to its vacation ownership business, taking the total membership to over 2.58 lakhs at the end of the year. Addition in the members is a result of continued success of Companys pull-based digital and referral leads as well as reaching out to prospects by way of engagement through innovative platforms, alliances and corporate partnerships. During the year under review, your Company has been reinventing its marketing strategy around digital formats and platforms as media consumption has shifted towards mobile devices. Marketing and brand building activities are focused on bringing alive the Club Mahindra experience to generate a pull for the brand by making it aspirational for the target consumer segments.

Your Company added 9 resorts and 224 room units during the year under review. The total inventory stands at 3,732 room units across its 70 resorts as of March 31, 2020. Along with its Finnish subsidiary Holiday Club Resorts Oys (HCR) 33 resorts, your Company has achieved a significant milestone of offering 100+ resorts to its members during the financial year 2019-20.

During the year under review, your Company through its step- down subsidiary Covington S.a.r.l, Luxembourg (Covington), has increased its stake in HCR from 96.47% to 100% with the acquisition of the balance shares.

The Ministry of Corporate Affairs (MCA) vide its notification dated March 30, 2019 has made Indian Accounting Standard 116 "Leases" (Ind AS 116) applicable effective April 1, 2019. As per Ind AS 116, a lessee recognises a right-of-use ("ROU") asset representing its right to use the underlying asset and

a corresponding lease liability representing its obligation to make lease payments. The nature of expenses related to these leases has changed as Ind AS 116 substitutes the operating lease expense (i.e. rent) with depreciation charge for ROU assets and interest expense on lease liabilities.

In view of the above, the financial statements of your Company for the financial year ended March 31, 2020, 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.

Your Company has applied the modified retrospective approach as per para C5(b) of Ind AS 116 to existing Leases as on April 1, 2019 and the cumulative effect of applying this standard is recognised at the date of initial application i.e. April 1, 2019 in accordance with para C7 of Ind AS 116 as an adjustment to the Transition Difference under other equity. This has resulted in recognising a ROU asset of Rs. 19,736.60 lakhs and a corresponding lease liability of Rs. 21,183.10 lakhs by adjusting Transition Difference (other equity) net of taxes of Rs. 1,670.15 lakhs in standalone books and ROU asset of Rs. 1,39,084.89 lakhs and a corresponding lease liability of Rs. 1,54,988.18 lakhs by adjusting Transition Difference (other equity) net of taxes of Rs. 12,078.67 lakhs in consolidated books as at April 1, 2019. The financial information presented for the year ended March 31, 2019 have not been restated and hence the figures are not comparable to that extent. However, this change in the applicable Ind AS does not impact the business or cashflows.

On September 20, 2019, the Government of India, vide the Taxation laws (Amendment) Ordinance 2019, inserted Section 115BAA in the Income Tax Act, 1961, which provides domestic Companies an option to pay Corporate Tax at a reduced rate effective April 1, 2019, subject to certain conditions. During the financial year under review, your Company has decided to exercise the option of lower tax rate available under Section 115BAA of the Income Tax Act, 1961. Accordingly, the Company has recognised the provision for income tax for the year ended March 31, 2020 and remeasured the accumulated deferred tax asset at March 31, 2020 based on the rate prescribed under Section 115BAA. The resultant impact has been taken through the statement of profit and loss as a separate line item. The re-measurement of accumulated deferred tax and current tax asset has resulted in a one-time impact amounting to Rs. 19,972.94 lakhs which has been debited to the profit and loss account in standalone and consolidated financial statements for the year ended March 31, 2020. Out of this, Rs. 17,775.94 lakhs has been transferred to the Transition Difference (other equity) in standalone and consolidated financial statements for the year ended March 31, 2020.

Your Companys total income (including other income) was Rs. 1,03,711.78 lakhs in 2019-20 compared to Rs. 96,343.85 lakhs in 2018-19. Profit Before Tax (PBT) grew to Rs. 12,394.74 lakhs in 2019-20 from Rs. 10,017.24 lakhs in 2018-19. Profit After Tax

(PAT) (excluding one-time impact of change in tax rate) grew to Rs. 9,151.49 lakhs in 2019-20 from Rs. 6,386.23 lakhs in 2018-19. As a result of one-time impact of change in the tax rate, which augurs well for future cashflows of your Company, loss after tax (including one-time impact of change in tax rate) amounting to Rs. 10,821.45 lakhs in 2019-20. Diluted earnings per share (EPS) for 2019-20 stood at ( 8.14) from Rs. 4.80 in 2018-19.

Further, your Companys consolidated total income (including other income) grew to Rs. 2,43,114.56 lakhs in 2019-20 from

2,29,566.05 lakhs in 2018-19. Consolidated Profit Before Tax (PBT) grew to Rs. 10,132.62 lakhs in 2019-20 from Rs. 9,804.70 lakhs in 2018-19. Consolidated Profit After Tax (excluding onetime impact of change in tax rate) grew to Rs. 6,546.69 lakhs in 2019-20 from Rs. 5,957.19 lakhs in 2018-19. Your Company has accounted consolidated loss after tax (including one-time impact of change in tax rate) amounting to Rs. 13,426.25 lakhs in 2019-20. Consolidated Diluted earnings per share (EPS) for 2019-20 stood at ( 9.94) from Rs. 4.54 in 2018-19.

2. Financial Highlights (Standalone)

(Rs. in lakhs)

2019 - 2020 2018 - 2019
Income:
Income from sale of Vacation Ownership and other services 97,700.53 91,829.15
Other Income 6,011.25 4,514.70
Total Income 1,03,711.78 96,343.85
Expenditure:
Less: Employee Cost & Other Expenses 79,550.94 81,183.92
Profit before Depreciation, Interest and Taxation 24,160.84 15,159.93
Less: Depreciation 10,166.79 5,140.50
Interest 1,599.31 2.19
Profit for the year before Tax 12,394.74 10,017.24
Less: Provision for Tax - Current Tax 2,520.37 2,201.66
- Deferred Tax (net) 722.88 1,429.35
Net Profit for the year after Tax excluding impact of change in tax rate 9,151.49 6,386.23
One-time impact on Tax Expense due to change in tax rate 19,972.94 -
Net Profit / (Loss) for the year after Tax (10,821.45) 6,386.23
Other Comprehensive Income (Net of Tax) (54.61) 73,921.20
Total Comprehensive Income / (Loss) for the year (10,876.06) 80,307.43

3. Share Capital

The Issued, Subscribed and Paid up Share Capital of the Company as on March 31, 2020 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 the Directors shareholding as on March 31, 2020, are 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 ("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: https://www.clubmahindra.com/about-us/policies

The Company had changed its revenue recognition policy in accordance with Ind AS 115 during financial year 2018-19. 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 from 2006 till 2018. The Company has sought 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: https:// www.clubmahindra.com/about-us/policies

Your Directors draw attention of the Members to Note No. 51 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 Note Nos. 9, 10 and 20 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. 7 and 16.

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: https://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.

10. Sustainability

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 2019-20, 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 wellbeing 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 LLP, Practicing Company Secretaries, 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 the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI ESOP Regulations"), a total of 8,50,000 new Options were granted under the 2014 Scheme by the Nomination and Remuneration Committee to the eligible employees and noted by the Board.

Details required to be provided under Regulation 14 of the SEBI ESOP Regulations is available on the Companys website at: https://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 resolutions passed by the Shareholders, will be available for inspection by Members at the ensuing Annual General Meeting ("AGM").

16. Subsidiaries, Joint Venture and Associate Companies

During the year under review, Holiday Club Sweden AB, Sweden, step down subsidiary of the Company, disinvested its entire stake in Are Villa 1 AB and Are Villa 2 AB and consequently, Are Villa 1 AB and Are Villa 2 AB ceased to be the step down subsidiaries of the Company.

Further, Covington, a step down subsidiary of the Company, acquired the balance 3.53% stake in HCR and consequently, HCR has become a wholly owned subsidiary of Covington and in turn of the Company.

Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams), a Joint Venture company of the Company, is considered as a subsidiary company from Financial Year 201617 in accordance with the provisions of Ind AS. Accordingly, as of March 31, 2020, your Company has 34 subsidiaries (including 28 indirect subsidiaries), 1 joint venture company (indirect) and 2 associate companies (including 1 indirect associate).

17. Performance of Subsidiaries

Domestic 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.

Foreign Subsidiaries

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.

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, 2020, Covington holds 100% stake in HCR and 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, 2020, HCR has 33 resorts of which 25 are located in Finland, 2 in Sweden and 6 in Spain. Further, out of these, 7 resorts in Finland and 1 resort in Sweden have a spa hotel attached with indoor water parks, 4 resorts have golf course and there are 4 indoor theme parks for children called Angry Bird Activity Parks. Apart from 62,000 families and over 1,300 companies owning HCR timeshare, over 1 million guests visit Holiday Club Spa Hotels annually. During the year under review, total income of HCR, which includes turnover and other operating income, stood at € 157.33 million, compared to € 161.09 million in 2018-19.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the year were € 6.73 million, down from € 7.79 million in 2018-19. Overall, HCR recorded a PBT and PAT of € 0.26 million and € 0.14 million respectively in 2019-20. The performance of HCR was adversely affected due to COVID-19 in March 2020, which is peak holiday season in Finland.

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 a 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.

Associate Companies

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% of total share capital which includes preference share capital. Guestline did not have any operations during the year under review.

Kiinteisto 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: https://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.

18. Directors

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

At the 23rd AGM held on July 31, 2019, the following directors were re-appointed by the Shareholders:

a) Mr. Kavinder Singh was re-appointed as the Managing Director & CEO of the Company for a term of five years commencing from November 3, 2019 to November 2, 2024;

b) Mr. Rohit Khattar and Mr. Sanjeev Aga were re-appointed as Independent Directors of the Company for a second term of five consecutive years each commencing from August 27, 2019 to August 26, 2024;

c) Mr. Sridar Iyengar was re-appointed as an Independent Director of the Company for a second term commencing from August 27, 2019 to July 31, 2022; and

d) Mr. Cyrus Guzder was re-appointed as an Independent Director of the Company for a second term commencing from August 27, 2019 to July 31, 2020.

Accordingly, Mr. Cyrus Guzder would cease to hold office as an Independent Director of the Company from August 1, 2020 upon completion of his tenure as approved by the Shareholders.

Mr. Cyrus Guzder has been on the Board of the Company for around 22 years and has enriched the Board with his immense experience in all aspects of strategy and management, financial reporting and processes. His vast experience in managing Operations, Sales and Marketing, Accounting, Strategy, Human Resources Development was pivotal in steering the growth initiatives of the Company over a period of time.

Mr. Cyrus Guzder has been the Chairman of the Nomination and Remuneration Committee and Risk Management Committee, Member of Audit Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and other Committees of the Board.

Mr. Cyrus Guzder has always brought a solution based approach to issues while remaining committed to the highest standards of governance and excellence. He has made significant contributions as a Director of the Company and as a member of several of its Committees and his inputs have greatly benefited the Board and the Company.

During the year under review, Ms. Radhika Shastry ceased to be an Independent Director of the Company with effect from December 26, 2019 upon completion of her tenure. The Board places on record its sincere appreciation for the contributions made by Ms. Radhika Shastry during her association with the Company.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on February 1, 2020 have appointed

Mrs. Sangeeta Talwar as an Additional Director in the category of an Independent Director of the Company not liable to retire by rotation for a period of five years with effect from February 1, 2020. She shall hold office as an Additional Director upto the date of the ensuing AGM. The Company has received the requisite Notice in writing from a Member under Section 160 of the Act proposing her candidature for the office of Director of the Company.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on May 9, 2020 have appointed Dr. Anish Shah as an Additional Director in the category of Non-Executive and Non-Independent Director of the Company, liable to retire by rotation. He shall hold office as an Additional Director upto the date of the ensuing AGM. The Company has received the requisite Notice in writing from a Member under Section 160 of the Act proposing his candidature for the office of Director of the Company.

In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Mr. V S Parthasarathy, being longest in the office, is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Notice convening the forthcoming AGM will include the proposal for the appointment/ re-appointment of the aforesaid Directors. A brief resume of the Directors seeking appointment/ 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 will also be annexed to the Notice of AGM.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and SEBI Listing Regulations. Further, the Independent Directors of the Company have also confirmed that they have registered themselves with the Indian Institute of Corporate Affairs, Manesar and have included their name in the databank of Independent Directors within the statutory timeline pursuant to the provisions of Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

19. Key Managerial Personnel (KMPs)

As on March 31, 2020, 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. Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year

During the year under review, Mrs. Sangeeta Talwar has been appointed as an Independent Director of the Company

with effect from February 1, 2020, subject to the approval of Shareholders. The Board is satisfied with the integrity, expertise and experience (including the proficiency) of Mrs. Sangeeta Talwar who has been appointed as an Independent Director of the Company with effect from February 1, 2020.

Regarding the experience which includes proficiency test, Mrs. Sangeeta Talwar is exempted from 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 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 are also available at the link https://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.

22. 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.

23. Number of Board Meetings

During the year under review, the Board of Directors met 5 (five) 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.

24. Composition of Audit Committee

The Audit Committee consists of Mr. Sridar Iyengar as its Chairman and Mr. Cyrus Guzder, Mr. V S Parthasarathy, Mr. Rohit Khattar and Mr. Sanjeev Aga, as its other members. Further details are provided in the Corporate Governance Report, which forms a part of this Annual Report.

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, 2020, 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, 2020 and of the profit of the Company for the year ended on that date;

c) they have taken proper and sufficient 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.

26. 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 efficiency. 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.

27. 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, 2020 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.

28. 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.

29. 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. 51 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.

30. Auditors

A) Statutory Auditors

The Shareholders at their 21st 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 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, 2020 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, Practicing Company Secretaries, Secretarial Auditor of the Company in the Secretarial Audit Report.

31. Deposits

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.

32. Credit Rating

India Ratings and Research Private Limited ("India Ratings") has re-affirmed 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.

33. Material Changes and Commitment Affecting 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, 2020 and the date of the Directors Report.

34. 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, 2020, 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 https://www.clubmahindra.com/ about-us/investor-relations/financials.

35. 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 efficient 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.

36. 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 Top 100 Best companies to work for in India 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 were no complaint pending at the beginning of the year. During the year under review, the Company received 1 complaint under the Policy which was disposed- off and appropriate actions were taken within the statutory timelines. Further, there were no complaints 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 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 7 (seven) employees who were employed throughout the year and were in receipt of remuneration of more than Rs. 102 lakhs per annum. There were 5 (five) employees 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. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Company at its Corporate Office.

The Financial Statements, reports etc. of the Company are available on the website of the Company www.clubmahindra. com.

38. 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

Arun Nanda
Place: Mumbai Chairman
Date: May 19, 2020 DIN: 00010029