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Mahindra Lifespace Developers Directors Report, Mahindra Life Reports by Directors
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Mahindra Lifespace Developers

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Directors Report Year End : Mar '19    Mar 18

Board’s Report to the Members

The Directors present their twentieth report together with the audited financial statement of your Company for the year ended on 31st March, 2019.

FINANCIAL HIGHLIGHTS (STANDALONE)

(Rs. in lakh)

2019

2018

Income from Operations

48,603

47500

Other Income

6,881

8,222

Total Income

55,484

55,722

Profit Before Depreciation, Finance cost and Taxation

9,312

11,830

Less : Depreciation

(306)

(396)

Profit Before Finance cost and Taxation

9,006

11,434

Less : Finance Cost

(548)

(3,541)

Profit Before Taxation

8,458

7,893

Less : Provision for Taxation

- Current Tax

NIL

(2,566)

- Deferred Tax (including MAT Credit)

(2,599)

(15)

Profit After Tax

5,859

5,312

Add: Balance of Retained earnings of earlier years

55,018

53,216

Add: Transfers from Debenture Redemption Reserve

8,375

-

Less: Adjustment relating to cumulative effect of applying Ind-AS 1151

(7,958)

-

Retained earnings available for appropriation

61,294

58,528

Add: Other Comprehensive Income / (Loss)

(77)

(15)

Less: Dividend paid on Equity Shares

(3,080)

(3,079)

Less: Income-tax on Dividend paid***

(163)

(416)

Retained earnings carried forward.

57,974

55,018

* The Ministry of Corporate Affairs vide notification dated 28th March 2018 has mandated Ind AS 115 “Revenue from Contracts with Customers” (Ind AS 115) from 1st April, 2018. 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 1st April 2018 and the cumulative effect of applying this standard is recognised at the date of initial application i.e.1st April, 2018 in accordance with para C7 of Ind AS 115 as an adjustment to the opening balance of Retained Earnings, only to contracts that were not completed as at 1st April, 2018. The transitional adjustment of Rs. 7,958.14 lakhs (net of deferred tax) has been adjusted against opening Retained Earnings based on the requirements of the Ind AS 115 pertaining to recognition of revenue based on satisfaction of performance obligation (at a point in time). For further details, please refer Note no. 30 to the standalone financial statement.

** Re-measurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

*** Pursuant to applicable provisions of Indian Accounting Standards, the amount of dividend paid and income tax thereon mentioned in the columns for 2019 and 2018 represents the dividend amount paid and tax paid thereon for the financial years 2018 and 2017, respectively.

DIVIDEND

For the Financial Year 2018-19, your Directors have recommended a dividend of Rs. 6 per equity share of the face value of Rs. 10 each of the Company, i.e. 60 (sixty) percent, payable to those shareholders whose names appear in the Register of Members as on the Book Closure Date.

The equity dividend outgo for the proposed dividend on equity shares for the financial year 2018-19, inclusive of tax on distributed profits and net of tax on distributed profits on dividend proposed by the subsidiaries during the current financial year, amounts to Rs. 3,335.75 lakh. The dividend shall be paid out of the profits for the financial year 2018-19.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”), the Board of Directors of the Company at its meeting held on 27th October, 2016 has formulated and adopted a ‘Dividend Distribution Policy’. The Policy is attached herewith and marked as Annexure 1 and is also available on the Company’s website athttps://www.mahindralifespaces.com/media/investor/codes-and-policies/Dividend%20Distribution%20Policy.pdf

RESERVES

Out of the profits available for appropriation, no amount has been transferred to any reserves for the year under review.

OPERATIONS / STATE OF THE COMPANY’S AFFAIRS

India experienced an economic slowdown during FY’19, which saw the Gross Domestic Product (GDP) grow at 7.0 per cent, compared to 7.2 per cent in the previous year. This downturn was primarily driven by degrowth in the agriculture and services sectors, even as growth rate of the manufacturing sector accelerated from 5.9 per cent in FY 2017-18 to 7.7 per cent in FY 2018-19.

The real estate industry saw signs of revival during the year, where the construction sector grew at 8.9 per cent in FY 2018-19 after an average growth of 4.4% in the previous five years. The uptick in the sectoral growth was evident in the Company’s performance during the year, which saw higher completion of construction works, sales, collections, new launches and land acquisition. The Company sold 1,678 residential units aggregating to 1.69 million square feet of saleable area in FY 2018-19 compared to 1,357 units aggregating 1.16 million square feet in the previous year. In value terms, this represents a growth of 67% in sales from Rs. 61,100 lakh in FY 2017-18 to Rs. 102,300 lakh in FY 2018-19. The Company’s collections saw a significant growth from Rs. 60,308 lakh in FY 2017-18 to Rs. 96,321 lakh in FY 2018-19. The Company’s focus on execution was strongly reflected in the completion of 1.84 million square feet in FY 2018-19 compared to 0.68 million square feet in FY 2017-18. The Company handed over 1,225 units to its customer in FY 2018-19.

The consolidated total income of your Company stood at Rs. 65,387 lakh in FY 2018-19 as compared to Rs. 64,413 lakh in FY 2017-18. The consolidated Profit before tax (PBT) stood at Rs. 14,326 lakh in FY 2018-19 as compared to Rs. 13,454 lakh in FY 2017-18, whereas the consolidated profit after tax (PAT) and minority interest was Rs. 11,971 lakh in FY 2018-19 as compared to Rs. 10,100 lakh in FY 2017-18.

The total income of your Company as a standalone entity in FY 2018-19 was Rs. 55,484 lakh as compared to Rs. 55,722 lakh in FY 2017-18. PBT in FY 2018-19 was Rs. 8,458 lakh as compared to Rs. 7,893 lakh in FY 2017-18, whereas PAT was Rs. 5,859 lakh as compared to Rs. 5,312 lakh in FY 2017-18. Total income in FY 2018-19 includes dividend income of Rs. 1,665 lakh from Mahindra World City (Jaipur) Limited and Rs. 425 lakh from Mahindra Integrated Township Limited, subsidiaries of the Company. In FY 2017-18, the Company had received dividend income of Rs. 666 lakh from Mahindra World City (Jaipur) Limited, and Rs. 370 lakhs from Mahindra Integrated Township Limited subsidiaries of the Company.

During FY 2018-19, the Company launched three new projects — ‘Roots’ in Kandivali, Mumbai Metropolitan Region (MMR), ‘Lakewoods’ in Mahindra World City (MWC), Chennai, and ‘Centralis’ in Pimpri, Pune. Additionally, it launched fresh inventory in two of its existing projects ‘Antheia’ (Pune), ‘Bloomdale’ (Nagpur).

In the affordable housing segment, the Company launched fresh inventory in two of its existing projects - ‘Happinest Avadi’ (Chennai) and ‘Happinest Palghar’ (MMR).

The Company is currently developing 3.68 million square feet with another 5.16 million square feet available in the form of forthcoming projects, which includes new phases of ongoing projects and new projects that are to be launched.

In the Integrated Cities and Industrial Clusters (IC & IC) business, the company continued to focus on deals through new clients & existing customer base. It executed land leases of around 93 acres in FY 2018-19 at MWCs Chennai, Jaipur & Origins, Chennai, compared to 62 acres in the previous year. The IC & IC business has leased entire industrial land inventory at Mahindra World City, Chennai. ‘Origins, Chennai’, the first industrial cluster project launched in FY 2018-19 in partnership with Sumitomo Corporation, signed its anchor customer. ‘Origins, Ahmedabad’, the second industrial cluster project has obtained all key approvals for the first phase of the project and the initial development work has already started. It is being developed by the Company’s subsidiary, Mahindra Industrial Park Private Limited (MIPPL), in a strategic partnership with International Finance Corporation.

The IC & IC business will continue to offer a wide choice of industrial land leasing to its clients through the national footprint across Northern, Western & Southern India. The multi-product SEZ notification in FY 2018-19 at MWC Jaipur has enabled the business to engage in new industrial segments.

No material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.

AWARDS AND RECOGNITION

Your Company and its subsidiaries received several awards and recognitions during the financial year 2018-19. Some of the prestigious awards are:

- The Company was recognized as one of India’s Top Builders 2018 at the Construction World Architect and Builder Awards.

- The Company was ranked 22nd in the list of Great Places to Work in India, in the ‘Mid-size Companies’ Category.

- The Company was ranked among the ‘Top 100 Best Companies for Women in India’ by Working Mother and AVTAR.

- The Company received Digital Marketing Effectiveness (Gold) at Asian Customer Engagement Forum for Social media campaign #18Daychallenge.

- The Company received Best use of medium length video (Silver) at Lighthouse Insights Digital Marketing Awards 2018 for Social media campaign #Building Together.

- The Company received Best Twitter Case Study at Lighthouse Insights Digital Marketing Awards 2018 for Social media campaign #18Daychallenge.

SHARE CAPITAL

During the year, the Company has allotted 20,950 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible employees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2012 (ESOS - 2012). No Stock Options were exercised under Employee Stock Option Scheme - 2006 (ESOS - 2006).

Consequently, during the year, the issued equity share capital has increased from Rs. 5,137.92 lakh to Rs. 5,140.02 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 5,132.81 lakh to Rs. 5,134.91 lakh.

Post closure of Financial Year 2018-19, the Company has allotted 3,300 equity shares of Rs. 10 each at an exercise price of Rs. 10 per share to the eligible employees pursuant to exercise of stock options granted under ESOS - 2012. Consequently, the issued equity share capital has increased from Rs. 5,140.02 lakh to Rs. 5,140.35 lakh and the subscribed and paid up equity share capital of the Company has increased from Rs. 5,134.91 lakh to Rs. 5,135.24 lakh.

The allotment of 51,063 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (now corresponding to Section 126 of the Companies Act, 2013), till such time the title of the bona-fide owners of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of offences relating to transactions in Securities).

During the year, Company has not issued any equity shares with differential rights or any sweat equity shares.

EMPLOYEE STOCK OPTIONS SCHEME

During the year, in accordance with ES0S-2012, the Nomination and Remuneration Committee had on 30th July, 2018 and 14th February, 2019, approved grant of total 25,500 Stock Options to the eligible employees, at an exercise price of Rs. 10 each which is equal to the face value of the equity share of the Company.

During the year, no Stock Options have been granted under ESOS - 2006. Except 5,000 Stock Options granted on 4th August, 2012, all options granted under ES0S-2006 and not exercised have lapsed.

There is no scheme as envisaged under Section 67 of the Companies Act, 2013 (“the Act”) in respect of shares on which voting rights are not directly exercised by the employees.

During the year, no change was made to the existing schemes i.e. ESOS - 2006 and ESOS - 2012. The existing schemes are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and other applicable Regulations and Circulars in force, from time to time.

The disclosure in relation to ESOS-2006 and ESOS-2012 under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is uploaded on the website of the Company at https://www. mahindralifespaces.com/media/investor/stock-exchange-filings/ other-filings-information/2018/2%20Disclosure%20under%20 SEBI%20Share%20Based%20Employee%20Benefits%20 Regulations%202014%202017-18.pdf

HOLDING COMPANY

As on 31st March, 2019, the Promoter and Holding company i.e. Mahindra and Mahindra Limited (M&M) holds 2,64,39,850 equity shares representing 51.49 percent of the total paid-up equity capital of the Company. There was no change in the shareholding of M&M during the year.

The Company continues to be a Subsidiary Company of M&M. All subsidiary companies of the Company are consequently subsidiary companies of M&M.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AS PER COMPANIES ACT, 2013

A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Act, and their contribution to the overall performance of the Company is provided in the consolidated financial statement at note no 44.

SUBSIDIARY AND JOINT VENTURE COMPANIES

Mahindra World City (MWC), Chennai, is being implemented by Mahindra World City Developers Limited (MWCDL), a 89:11 joint venture between the Company and the Tamil Nadu Industrial Development Corporation Limited (TIDCO), respectively. It is the first township in India to receive Green Township Certification (Stage I Gold certification) from IGBC. Mahindra World City, Chennai, was launched in September 2002, and currently has three sector specific Special Economic Zones (SEZs) — IT (services and manufacturing), Apparel and Fashion Accessories, and Auto Ancillaries, and a Domestic Tariff Area (DTA) for businesses catering to the Indian market. Integrated to the business zone is a Residential and Social zone. At the end of FY 2018-19, the project had a total area of 1,524 acres. The company is focusing on clients for social infrastructure, having leased entire industrial land inventory.

Mahindra World City (MWC), Jaipur, is being implemented by Mahindra World City (Jaipur) Limited (MWCJL), a 74:26 joint venture between the Company and Rajasthan State Industrial Development & Investment Corporation Limited (RIICO), a Government of Rajasthan enterprise, respectively. The project is spread across 2,913 acres of land and offers multi product SEZ, along with Domestic Tariff Area (DTA) and Social & Residential Infrastructure. The erstwhile four sector specific zones (IT/ITeS, Engineering and Related Industries, Handicrafts and Gems & Jewellery), have now been merged into a multi-product SEZ vide notification dated 17th April, 2018 issued by the Ministry of Commerce and Industries (Department of Commerce) Government of India.

During the year, the Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of MWC, Jaipur. IFC has invested Rs. 194 Crore in MWCJL and is entitled to economic rights to the extent of 50% on 500 acres of gross land comprising first 250 acres of SEZ and first 250 acres of DTA.

Mahindra Integrated Township Limited (MITL) is a codeveloper in developing the residential township area at Mahindra World City, Chennai. Its current developments include ‘Iris Court’, ‘Nova’ and ‘Lakewoods’. Project ‘Lakewoods’ was launched during the year with a total saleable area of 0.90 million square feet. Additionally, MITL is in the process of obtaining approvals for its next project at MWC, Chennai. After excluding the area under the above projects, MITL still has approximately 135 acres to be developed in phases for offering products in different formats and segments. The Company owns 96.40 percent of MITL.

Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and a co-developer is developing a gated residential community in approximately 54 acres within Mahindra World City, Chennai, under the name ‘Aqualily’.

Mahindra Bloomdale Developers Limited (MBDL) [formerly known as Mahindra Bebanco Developers Limited] is wholly owned subsidiary of the Company. MBDL was a 70:30 joint venture company between the Company and B. E. Billimoria & Co Limited (BEBL) respectively. The Company, BEBL and MBDL had entered into a Shareholders Agreement governing the terms of the joint venture. MLDL and BEBL agreed on the transfer of BEBL’s shareholding in MBDL to MLDL. Accordingly, MLDL acquired 15,000 equity shares held by BEBL, and MBDL ceased to be a joint venture cum partially owned subsidiary and became a wholly owned subsidiary of the Company effective 28th May, 2018. MBDL is developing a gated residential community ‘Bloomdale’ across approximately 25.2 acres at Multi-modal International Hub Airport at Nagpur (MIHAN).

Mahindra Homes Private Limited (MHPL), is a 74.98 : 25.02 joint venture between the Company and Actis Mahi Holding (Singapore) Private Limited (‘Actis’), [Actis acquired the stake held by SCM Real Estate (Singapore) Private Limited (SCM) held in MHPL], respectively and is developing in collaboration with a developer and land owning companies, a group housing project “Luminare” at NCR on approximately 6.80 acres and a residential project “Windchimes” at Bengaluru on approximately 5.90 acres.

Mahindra Happinest Developers Limited (MHDL) is a 51:49 joint venture between the Company and HDFC Capital Affordable Real Estate Fund - I, respectively. MHDL launched first phase of its first affordable housing project in Palghar, Maharashtra, on approximately 8.35 acres, under the brand ‘Happinest’.

Mahindra Industrial Park Chennai Limited (MIPCL), is a 60:40 joint venture between MWCDL and Sumitomo Corporation, Japan, respectively. MIPCL is setting up an industrial cluster in North Chennai (the NH-16 corridor) on approximately 264 acres under the brand ‘Origins by Mahindra World City’.

Mahindra Industrial Park Private Limited (MIPPL) [formerly known as Industrial Cluster Private Limited (ICPL)] a wholly owned subsidiary of the Company has acquired 339.92 acres of contiguous land at Jansali near Ahmedabad for setting up an industrial cluster. The Company has partnered with International Finance Corporation (IFC), a member of the World Bank Group for the development of upcoming project at Jansali. The project will be marketed under the brand ‘Origins by Mahindra World City’.

Mahindra Infrastructure Developers Limited (MIDL), a wholly owned subsidiary of the Company, is an equity participant in the project company namely, New Tirupur Area Development Corporation Limited (NTADCL) implementing the Tirupur Water Supply and Sewerage project.

Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance services for water and sewerage facilities at Tirupur, India and is a 98.99 percent subsidiary of Mahindra Infrastructure Developers Limited and consequently, a subsidiary of the Company.

Mahindra World City (Maharashtra) Limited (MWCML), is a wholly owned subsidiary of the Company, which was set up to undertake large format development. MWCML is looking for an appropriate business opportunity to take up projects in large format development.

Deep Mangal Developers Private Limited (DMDPL) is a subsidiary of MWCML and consequently a subsidiary of the Company. DMDPL intends to develop its land at Murud on southern coast of Maharashtra as a one-of-its-kind tourist destination catering to globally growing need of holistic healthcare and wellness tourism, besides promoting adventure and heritage tourism. The State Government will support the project by facilitating necessary infrastructure in the region.

Knowledge Township Limited (KTL), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra under the brand ‘Origins by Mahindra World City’ for which the company is in the process of procuring the required land area.

Industrial Township (Maharashtra) Limited (ITML) and Anthurium Developers Limited (ADL), wholly owned subsidiaries of the Company are exploring the possibility of taking up real estate development projects.

During the year, consequent to coming in to force of the Companies Amendment Act, 2017, effective 7th May, 2018, Mahindra Knowledge Park (Mohali) Limited which was an associate company of the Company became a subsidiary of MWCML and consequently, the subsidiary of the Company. Similarly, Mahindra Construction Company Limited, which was an indirect subsidiary of the Company ceased to be a subsidiary of the Company.

ASSOCIATE COMPANIES

As of 31st March, 2019, no company is an associate of the Company.

Except as aforesaid, during the year, no other company became or ceased to be a Subsidiary / Associate / Joint Venture company of the Company.

CONSOLIDATED FINANCIAL STATEMENT

The audited consolidated financial statement of the Company prepared in accordance with the applicable Accounting Standards along with all relevant documents and the Auditors’ Report forms part of this Annual Report.

The financial statements of Subsidiary companies as per the Companies Act, 2013 are not attached along with the financial statements of the Company. Separate audited financial statement of each of the subsidiaries is placed on the website of the Company at web link:https://www.mahindralifespaces.com/ investors/annual-reports/fy-18-19

The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries will also be available for inspection at the Registered Office of your Company during working hours up to the date of the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report, which gives a detailed account of state of affairs of the operations of the Company and its subsidiaries forms part of this Annual Report.

CORPORATE GOVERNANCE

A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under Para E of Schedule V of the SEBI LODR forms part of this Annual Report.

SUSTAINABLE DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT

Your Company has been at the forefront of the real estate industry in India to achieve mission of ‘Transforming urban landscapes by creating sustainable communities’. Sustainability is thus a core agenda for the Company. The details of the Company’s approach to sustainability are covered in the Business Responsibility Report.

Presently, the requirement of publishing Business Responsibility Report (BRR) under Regulation 34(2)(f) of SEBI LODR is not applicable to the Company. However, the Company has voluntarily provided the BRR for the financial year 2018-19 which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company’s guiding principle for CSR is to build its relationship with stakeholders and the community at large and contribute to their long term social good and welfare. The Company, in every financial year, in line with the Companies Act, 2013, pledges to spend two percent of the average net profits made during the three immediately preceding financial years towards CSR initiatives.

The Company has constituted a Corporate Social Responsibility (CSR) Committee comprising Non-Executive Non-Independent Director - Mr. Arun Nanda, Independent Director - Mr. Shailesh Haribhakti and the Managing Director & CEO, Ms. Sangeeta Prasad. Mr. Arun Nanda is the Chairman of the Committee. During the year, Ms. Anita Arjundas ceased to be a member of the Committee consequent to her resignation as Managing Director and as a Director of the Company effective 30th September, 2018. The Board at its meeting held on 28th September, 2018 has appointed Ms. Sangeeta Prasad, the Managing Director & CEO as a member of the Committee effective 1st October, 2018. The role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend expenditure to be incurred on CSR activities, to monitor the CSR policy of the Company, from time to time, and to institute a transparent monitoring mechanism for the CSR projects or programs or activities undertaken by the Company.

The Company’s CSR Policy lays out the vision, objectives and implementation mechanism. The Company’s CSR policy is available on the Company’s web link athttps:// www.mahindralifespaces.com/wp-content/uploads/2019/04/ corporate social responsibility csr policy.pdf

The Company’s CSR activities have traditionally focused on education, skill development, health, environment and promoting sustainable practices.

The objective of the CSR policy is to:

- Promote a unified approach to CSR to incorporate under one umbrella the diverse range of the Company’s philanthropic activities, thus enabling maximum impact of the CSR initiatives;

- Ensure an increased commitment at all levels in the organisation, to operate in an economically, socially and environmentally responsible manner while recognising the interests of all its stakeholders;

- Encourage employees to participate actively in the Company’s CSR and give back to the society in an organised manner through the employee volunteering programme called Employee Social Options.

The Company’s commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the Companies Act, 2013. The Company gives preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities.

The Company had committed CSR expenditure of Rs. 289.77 Lakh for the financial year 2018-19, which included an unspent amount of Rs. 97.20 Lakh pertaining to financial year 2017-18. As against the committed CSR expenditure of Rs. 289.77 Lakh, the Company has spent Rs. 291.21 Lakh during the financial year 2018-19.

The annual report on the CSR activities is at Annexure 2 to this Report.

DIRECTORS

Pursuant to Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. Arun Nanda (DIN: 00010029) Non-Executive Non-Independent Director retires by rotation at the 20th Annual General Meeting of the Company and being eligible has offered himself for reappointment.

Ms. Anita Arjundas, resigned as the Managing Director and as a Director of the Company effective 30th September, 2018. She resigned to pursue her interests in the development / social sector. The Board expressed its sincere appreciation for the valuable contribution made by Ms. Anita Arjundas during her tenure as the Managing Director & CEO. The Board appreciated

Ms. Anita Arjundas for her remarkable contribution in putting in place systems, processes and best practices which are comparable to the best-in-class in the Real Estate industry. Under her stewardship, the Company continued to be a leader in the integrated cities business, expanded its presence in the midpremium residential segment across geographies and embarked on a journey to become a dominant player in the affordable housing sector.

Consequent thereto and on recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 28th September, 2018, appointed Ms. Sangeeta Prasad, then CEO of the Company, as an Additional Director and as the Managing Director designated as “Managing Director & Chief Executive Officer” (MD & CEO) with effect from 1st October, 2018. Pursuant to Section 161 of the Act and Article 128 of the Articles of Association of the Company, Ms. Prasad holds office upto the date of forthcoming Annual General Meeting. Further, in terms of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Board has proposed to the Shareholders appointment of Ms. Sangeeta Prasad as a Director of the Company, not liable to retire by rotation. Also, her appointment as Managing Director designated as MD & CEO effective 1st October, 2018 and her remuneration is being put up for the approval of the shareholders at the forthcoming Annual General Meeting of the Company.

Brief resume and other details of Mr. Arun Nanda and Ms. Sangeeta Prasad, in terms of Regulation 36(3) of SEBI LODR and Secretarial Standards on General Meeting, are provided in the Corporate Governance Report forming part of the Annual Report. None of the Directors of the Company are inter-se related to each other. Both Directors i.e. Mr. Arun Nanda and Ms. Sangeeta Prasad are not disqualified from being reappointed / appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.

The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by Independent Directors. Pursuant to the provisions of the Act, the Nomination & Remuneration Committee (NRC) specified the manner of effective evaluation of the performance of the Board, its Committees and individual Directors. In terms of manner of performance evaluation specified by the NRC, the performance evaluation of the Board, its Committees and individual Directors was carried out by NRC and the Board of Directors. Further, pursuant to Schedule IV of the Act and Regulation 17(10) of the SEBI LODR, the evaluation of Independent Directors was done by the Board of Directors. For performance evaluation, structured questionnaires, covering various aspects of the evaluation such as adequacy of the size and composition of the Board and Committee thereof with regard to skill, experience, independence, diversity, attendance and adequacy of time given by the Directors to discharge their duties, Corporate Governance practices, etc. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflected high level of engagement of the Board of Directors and its Committees amongst its members with the Company and its management and that they are fully satisfied with the same.

The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of independence as provided in the Companies Act, 2013 and SEBI LODR.

The details of familiarization programme for Independent Directors have been disclosed on website of the Company and is available at the linkhttps://www.mahindralifespaces. com/wp-content/uploads/2019/04/details of familiarisation programmes for independent directors 2018-19.pdf

The salient features of the following policies of the Company and changes therein made during the year are attached herewith and marked as Annexure 3:

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 linkhttps://www.mahindralifespaces.com/investors/codes-and-policies

The Managing Director & CEO draws remuneration only from the Company and does not receive any remuneration or commission from any of its subsidiary companies / holding company.

KEY MANAGERIAL PERSONNEL (KMP)

As on 31st March, 2019, details of Key Managerial Personnel under the Companies Act, 2013 are given below :

Sr.

No.

Name of the Person

Designation

1

Ms. Sangeeta Prasad

Managing Director & CEO

2

Mr. Suhas Kulkarni

Company Secretary

3

Mr. Jayant Manmadkar

Chief Financial Officer

Effective 30th September, 2018, Ms. Anita Arjundas resigned as the Managing Director and as Director. Ms. Sangeeta Prasad who was holding position of the CEO, effective 1st April, 2018, was later appointed as the Managing Director designated as the ‘Managing Director & CEO’ effective 1st October, 2018.

Mr. Jayant Manmadkar, Chief Financial Officer (CFO) of the Company resigned w.e.f. 30th April, 2019 to pursue professional opportunities outside the real estate sector. The Board puts on record its sincere appreciation for the services rendered by Mr. Manmadkar during his tenure as the CFO.

MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards-I on Board Meetings and SEBI LODR.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31st March, 2019 and of the profit of the Company for that period;

(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared the annual accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the Financial Statements. The Audit Committee of the Board reviews the internal control systems, the adequacy of internal audit function and significant internal audit findings with the management, Internal Auditors and Statutory Auditors.

AUDIT COMMITTEE

As on 31st March, 2019, the Audit Committee comprised of three Independent Directors, namely Mr. Ameet Hariani, Mr. Shailesh Haribhakti, Mr. Bharat Shah, and one Non-Executive NonIndependent Director, Dr. Anish Shah. Mr. Shailesh Haribhakti resigned as the Chairman of the Audit Committee from the close of business hours of meeting of the Audit Committee held on 27th April, 2018 but continued as a member of the Audit Committee. Mr. Ameet Hariani, Independent Director was appointed as a member of the Audit Committee in the Board Meeting held on 27th April, 2018 and was appointed as the Chairman of the Audit Committee at the meeting of Audit Committee held on 30th July, 2018.

All members of the Audit Committee possess strong knowledge of accounting and financial management. The Chairman of the Company, the Managing Director, Chief Executive Officer, Chief Financial Officer, the Internal Auditors and Statutory Auditors are regularly invited to attend the Audit Committee Meetings.

The Company Secretary is the Secretary to the Committee. The Internal Auditor reports to the Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.

VIGIL MECHANISM / WHISTLE BLOWER MECHANISM

The Company has established a vigil mechanism by adopting a Whistle Blower Policy for stakeholders including directors and employees of the Company and their representative bodies to report genuine concerns in the prescribed manner to freely communicate their concerns / grievances about illegal or unethical practices in the Company, actual or suspected, fraud or violation of the Company’s Code or Policies. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimisation of stakeholders who use such mechanism. It provides a mechanism for stakeholders to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell consisting of Chief Legal Officer & Company Secretary, Chief Financial Officer and Chief Ethics Officer (Chief People Officer). During the year, no person was denied access to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web link https://www.mahindralifespaces.com/media/ investor/codes-and-policies/Whistle%20Blower%20Policy.pdf

RISK MANAGEMENT

The Company has in place a process to inform the Board about the risk assessment and minimisation procedures. It has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Presently, Regulation 21 of the SEBI LODR with respect to Risk Management Committee is not applicable to your Company. However, the Board has constituted Risk Management Committee for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. As on 31st March, 2019, the Committee comprised of Independent Director, Mr. Shailesh Haribhakti, Managing Director & CEO, Ms. Sangeeta Prasad and Chief Financial Officer, Mr. Jayantt Manmadkar (resigned w.e.f. 30th April, 2019). During the year, Ms. Anita Arjundas ceased to be a member of the Committee consequent to her resignation as the Managing Director and Director of the Company effective 30th September, 2018. The Board at its meeting held on 28th September, 2018 appointed Ms. Sangeeta Prasad as a member of the Committee effective 1st October, 2018.

AUDITORS

The Shareholders of the Company at the 18th Annual General Meeting of the Company held on 25th July, 2017, had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (ICAI Registration Number 117366W/W-100018), as Statutory Auditors of the Company to hold office until the conclusion of the 23rd Annual General Meeting to be held in the calendar year 2022 to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.

Pursuant to amendment to Section 139 (1) of the Companies Act, 2013, ratification of appointment of Statutory Auditor at every Annual General Meeting is not required.

As required under the provisions of Section 139(1) and 141 of the Companies Act, 2013 read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the auditors to the effect that they are eligible to continue as Statutory Auditor of the Company.

The notes of the financial statements referred to in the Auditors’ Report issued by M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai for the financial year ended on 31st March, 2019 are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

The Board of Directors, on recommendation of the Audit Committee, has appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai, as Cost Auditor of the Company to conduct audit of the cost records maintained by the Company for the financial year 2018-19. CMA Vaibhav Prabhakar Joshi has confirmed that his appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and has also certified that he is free from any disqualification specified under Section 141 and proviso to Section 148(3) of the Act.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, a resolution seeking Shareholders’ ratification for remuneration payable to CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant is included in the Notice convening the Annual General Meeting.

The Company is required to maintain cost records as specified under Section 148 (1) of the Companies Act, 2013 and such accounts and records are made and maintained by the Company for the financial year 2018-19.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Martinho Ferrao & Associates, Practising Company Secretaries, to conduct the secretarial audit of the Company.

The Secretarial Audit Report for the financial year ended 31st March, 2019, is annexed herewith and marked as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company being formed for and engaged in real estate development (Infrastructural facilities) is exempt from the provisions of Section 186 of the Companies Act, 2013 related to any loans made or any guarantees given or any securities provided or any investments made by the Company. However, the details of the investments made and loans given are provided in the standalone financial statement at Note nos. 7 and 8.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. In view of the above, the requirement of giving particulars of contracts / arrangements / transactions made with related parties, in Form AOC-2 are not applicable for the year under review.

The “Policy on materiality of and on dealing with related party transactions” (as amended) as approved by the Board may be accessed on the Company’s website at the linkhttps://www. mahindralifespaces.com/wp-content/uploads/2019/04/policy-on-materiality-of-and-dealing-with-related-party-transactions.pdf

The Directors draw attention of the members to Note no. 36 to the standalone financial statement which sets out related party disclosures.

DEPOSITS, LOANS, ADVANCES AND OTHER TRANSACTIONS

During the year, the Company has not accepted any deposits from the public or its employees. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Regulation 34(3) and 53 (f) read with Schedule V of the SEBI LODR are provided in the standalone financial statement at Note no. 40.

Further, in terms of Regulation 34(3) and 53 (f) read with Schedule V of the SEBI LODR, details of the transactions of the Company, with the promoter and holding company Mahindra & Mahindra Limited holding 51.49 percent in the paid up equity capital of the Company as on 31st March, 2019, in the format prescribed in the relevant accounting standards for annual results, are given in Note No. 36 to the Standalone Financial Statement.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as per Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 5 to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure 6 to this Report.

Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours up to the date of the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company’s website at:https://www.mahindralifespaces. com/investors/stock-exchange-filings/other-filing-information

EXTRACT OF ANNUAL RETURN

The Annual Return in Form MGT-7 and its extract in Form MGT-9 for the financial year ended 31st March, 2019, are available on the website of the Company athttps://www.mahindralifespaces. com/investors/stock-exchange-filings/other-filing-information

GENERAL

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

- No fraud has been reported during the audit conducted by the Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.

- During the year, no revision was made in the previous financial statement of the Company.

- For the financial year ended on 31st March, 2019, the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CAUTIONARY STATEMENT

Certain statements in the Directors’ Report describing the Company’s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include labour and material availability, and prices, cyclical demand and pricing in the Company’s principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.

DISCLAIMER

The Company shall be registering its forthcoming projects at an appropriate time in the applicable jurisdictions / States under the Real Estate (Regulation and Development) Act, 2016 (RERA) and Rules thereunder. Till such time, the forthcoming projects are registered under RERA, none of the images, material, projections, details, descriptions and other information that are mentioned in the Annual Report for the year 2018-19, should be deemed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer, or invitation to acquire within the purview of the RERA. The Company uses carpet areas as per RERA in its customer communication. However, the data in saleable area terms has been presented in the Annual Report for the year 2018-19 to enable continuity of information to investors and shall not be construed to be of any relevance to home buyers / customers.

ACKNOWLEDGMENT

The Directors would like to thank all shareholders, customers, bankers, contractors, suppliers, joint venture partners and associates of your Company for the support received from them during the year. The Directors would also like to place on record their appreciation of the dedicated efforts put in by employees of the Company.

For and on behalf of the Board

Arun Nanda

Chairman

DIN:00010029

Date: 12th June, 2019

Place: Mumbai

Source : Dion Global Solutions Limited
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