DIRECTORS' REPORT TO THE MEMBERS Your Directors present their seventeenth report together with the audited financial statement of your Company for the year ended on 31st March, 2016. DIVIDEND For the Financial Year 2015-16, 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 per cent. The equity dividend (including tax on distributed profits) aggregates Rs. 2,799 lakh (previous year Rs. 5,475 lakh, aggregate of Special Dividend by way of an Interim Dividend and Final Dividend). The Dividend shall be paid out of the profits of the current year. RESERVES Out of the profits available for appropriation, an amount of Rs. 3,135 lakh has been transferred to the Debenture Redemption Reserve and the balance has been carried forward to the Profit & Loss Account. OPERATIONS / STATE OF THE COMPANY'S AFFAIRS In a subdued global economic environment, and the ongoing slowdown in China, India's macroeconomic performance remained stable during financial year 2015-16. According to the advance estimates released by the Central Statistical Organisation (CSO), India's GDP growth is expected to be 7.6 per cent in financial year 2015-16, marginally higher than 7.2 per cent recorded in the previous year. An equally important aspect was the stability in retail inflation around 5 per cent mark, which allowed the RBI to continue with its accommodative policy stance. However, the rate cuts to the tune of 100 basis points during the year did not translate into desired reduction in lending rates. Consequently, the improvements in business and consumer confidence during the year were weak. As far as the real estate industry is concerned, the overall performance continued to be subdued — housing prices, rents and off take of housing loans continued to be sluggish during the year. The Company's performance needs to be evaluated in the context of this Industry Environment. In the residential segment, the Company sold over 1,000 residential units aggregating to 1.16 million square feet of saleable area in 2015-16 across its ongoing and newly launched projects, including projects of its subsidiary companies. The Company launched two new projects — 'Vivante' and 'Windchimes', marking its entry in the Bangalore market with the latter. In addition, fresh inventory in four of its existing projects was also launched during the year. In the large format developments, the Company's subsidiary Mahindra World City Developers Limited (MWCDL) signed a JV Agreement with Sumitomo Corporation, Japan to develop an industrial park in North Chennai on the NH-5 (Chennai – Kolkata highway). The first phase of the project of approximately 300 acres will be implemented by Mahindra Industrial Park Chennai Limited (MIPCL), a 60:40 JV between MWCDL and Sumitomo Corporation, respectively. The consolidated total income of your Company decreased from Rs. 114,757 lakhss in 2014-15 to Rs. 87,743 in 2015-16. The consolidated Profit before tax (PBT) stood at Rs.14,745 lakh in 2015-16 as compared to Rs.42,102 lakhs in 2014-15, whereas the consolidated profit after tax and minority interest (PAT) was Rs. 9,309 lakhs in 2015-16 as compared to Rs.26,620 lakhs during 2014-15. This Performance of the Company over the previous year needs to be looked in the context of the land sale transaction in respect of a delayed project in Mumbai, which contributed Rs.268 crore to the total income and Rs.245 crore to the profit before tax (PBT) during 2014-15. Total income of your Company as a standalone entity was Rs. 60,015 Lakh as compared to Rs.76,003 lakh in 2014-15. PBT was Rs.14,174 as compared to Rs.33,771 lakhs in 2014- 15, whereas PAT was Rs. 10,449 as compared to Rs. 23,330 lakhs in 2014-15. Total income includes dividend income of Rs.629 Lakhs and Rs.178 Lakhs received from its subsidiaries Mahindra World City (Jaipur) Limited and Mahindra World City Developers Limited, respectively, as compared to Rs.727 lakhs received from its subsidiary Mahindra World City Developers Limited, Rs.740 lakhs received from its subsidiary Mahindra World City (Jaipur) Limited and Rs.740 lakhs received from its subsidiary Mahindra Integrated Township Limited in 2014-15. 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 The Company and its subsidiaries received several awards and recognitions during 2015-16. Some of the prestigious awards are: • Mahindra Lifespaces rated as one of the Top 5 Great Places to Work in the real estate industry by the Great Places to Work Institute; • Mahindra Lifespaces won the Mint-Institute for Competitiveness - 'Strategy Award' in the Construction, Real Estate and Steel Segment ; • Mahindra Lifespaces has been ranked Regional Sector Leader for Listed -Asia - Industrial category by Global Real Estate Sustainability Benchmark (GRESB) Survey, 2015 for second year in a row; • Mahindra Lifespaces won the "Investor Relations Society Awards 2015" for Best Environment, Social & Governance (ESG) Disclosures in Small Cap category; • Mahindra Lifespaces bagged the runner up trophy for Best Safety Practices Competition 2015 in the Construction Category which was jointly organized by National Safety Council -Maharashtra Chapter & Directorate of Industrial Safety and Health, Government of Maharashtra; • Splendour by Mahindra Lifespaces rated "Platinum" on completion by the Indian Green Building Council (IGBC); • Mahindra Lifespaces won the "Best Developer -Residential Project" award for Splendour at the ACETECH Alpha Awards 2015; • Luminare by Mahindra Lifespaces was conferred with the "CIDC Vishwakarma Award" for Construction, Health, Safety and Environment; • Iris Court by Mahindra Lifespaces received the award for the 'Best Residential Project' in Chennai under the Affordable Housing Segment at the 10th CNBC AWAAZ Real Estate Awards 2015-16; • Mahindra World City Jaipur became the first project in Asia to receive Stage 2 Climate Positive Development certification from C40 Cities Climate Leadership Group; • Mahindra World City Chennai declared "Best Township" (more than 200 acres in size) at NDTV Parryware Property Awards 2015-16. SHARE CAPITAL During the year, the Company allotted 2,500 equity shares of Rs.10 each at an exercise price of Rs. 428 per share to the eligible grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2006 (ESOS - 2006). The Company has also allotted 18,450 equity shares of Rs.10 each at an exercise price of Rs. 10 per share to the eligible grantees pursuant to exercise of stock options granted under Employee Stock Option Scheme - 2012 (ESOS - 2012). Consequently, issued equity share capital has increased from Rs. 41,05,30,510 to Rs. 41,07,40,010 and the subscribed and paid up equity share capital of the Company has increased from Rs. 41,01,22,000 to Rs. 41,03,31,500. The allotment of 40,851 equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956, till such time the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of offenses relating to transactions in Securities). During the year, Company has not issued any equity shares with differential rights or any sweat equity shares. ISSUE & ALLOTMENT OF NON-CONVERTIBLE DEBENTURES On 4th April, 2013, the Company had issued and allotted 5,000 - Secured Listed Rated Redeemable 10.78 per cent YTM, Non-Convertible Debentures (NCDs) with a face value of Rs. 10,00,000 (Rupees Ten Lakh Only) each for cash at par, aggregating Rs. 500 crore (Rupees Five Hundred Crore Only) vide Series I, Series II, and Series III on Private Placement basis. The proceeds of the NCDs issue have been fully utilised for the purposes of the issue. Series I of Secured Listed Rated Redeemable 10.78 per cent YTM, 1,250 Non-Convertible Debentures (NCDs) with a face value of Rs. 10,00,000 (Rupees Ten Lakh only) each aggregating Rs. 125 crore (Rupees One Hundred Twenty-Five Crore Only) were redeemed on 4th April, 2016 along with redemption premium. EMPLOYEE STOCK OPTIONS SCHEME As of 31st March, 2016, 2,500 Stock Options were exercised under Employee Stock Option Scheme - 2006 (ESOS - 2006) and 18,450 Stock Options were exercised under Employee Stock Option Scheme - 2012 (ESOS - 2012). In accordance with the Employee Stock Option Scheme (ESOS-2012), the Nomination and Remuneration Committee had on 30th April, 2015 and 28th January, 2016, approved grant of total 34,000 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. The Information that the Company is required to disclose in relation to ESOS-2006 and ESOS-2012 under the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, is uploaded on the website of the Company at <http://www.mahindralifespaces.com/investors/disclosures-sebi>. The Shares arising out of exercise of Employee Stock Options are directly allotted to the eligible employees and therefore, the requirement of disclosure in respect of voting rights not exercised directly by the employees does not apply to the Company. The Existing Schemes, Employee Stock Option Scheme-2006 (ESOS - 2006) and Employee Stock Option Scheme-2012 (ESOS - 2012) are implemented in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the "Regulations") and other applicable Regulations and Circulars in force from time to time. HOLDING COMPANY The promoters of the Company i.e. Mahindra & Mahindra Limited (M&M) hold 20,846,126 equity shares which represents 50.80 per cent of the paid-up equity share capital of the Company. 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 A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided in Annexure A to the Consolidated Financial Statement and hence not repeated here for sake of brevity. The policy, as modified on 28th January, 2016, for determining material subsidiaries is available on the Company's website at the link: <http://www.mahindralifespaces>. com/media/newsevents_file/policyford-4d82fc3b9f7733c.pdf SUBSIDIARY COMPANIES Mahindra World City (MWC), Chennai, is implemented by Mahindra World City Developers Limited (MWCDL), currently an 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 Infrastructure zone. At the end of 2015-16, the project had a total area of 1,524 acres. With greater stabilisation in the business zone, the focus is now on developing the residential and social infrastructure. Mahindra World City, Chennai, has allocated 289 acres for the development of residential and social infrastructure. Mahindra World City, 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. Mahindra World City, Jaipur is being developed as a Multi-Product Special Economic Zone and a Domestic Tariff Area across 3,000 acres, of which 2,949 acres have already been acquired. Currently, the project has five zones, IT/ITES SEZ, Handicrafts SEZ, Engineering & Related Industries SEZ, Gems & Jewellery SEZ and a Domestic Tariff Area. Going forward, the near term focus will continue to be on sale of industrial land in the project. Mahindra Integrated Township Limited ("MITL") is engaged as a co-developer in developing residential township area at Mahindra World City, New Chennai. Its current developments include 'Iris Court' and 'Nova'. MITL has a balance of approximately 140 acres to be developed in phases for offering products in different formats and segments. MITL is 96.30 per cent owned by the Company. Mahindra Residential Developers Limited (MRDL), which is a wholly owned subsidiary of Mahindra Integrated Township Limited (MITL), and a co-developer in developing residential township area in MWC is developing a gated residential community in approximately 55 acres within Mahindra World City, New Chennai, under the name 'Aqualily'. Mahindra Bebanco Developers Limited (MBDL) is a 70:30 joint venture between the Company and B.E. Billimoria & Co. Limited, one of the leading construction companies in India, respectively. This company is developing a residential complex across approximately 25 acres at Multi-modal International Hub Airport at Nagpur (MIHAN). The details of the current developments in each of these companies are given in the Management Discussion and Analysis Report. 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. During the period 2003 to 2009, the company was engaged in operating a solid waste treatment plant at Tirupati. For more details about the investment of the Company into MIDL, please refer Note no. 12(a) to the standalone financial statement. Mahindra World City (Maharashtra) Limited ("MWCML"), is a wholly owned subsidiary of the Company, which was set up to undertake large format development. The Company is looking out for an appropriate business opportunity to take up projects in real estate development. Knowledge Township Limited ("KTL"), a wholly owned subsidiary of the Company will be developing an industrial park in Maharashtra. The company is in the process of procuring the targeted land area. Industrial Township (Maharashtra) Limited ("ITML"), a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development. Raigad Industrial & Business Park Limited ("RIBPL"), a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development. Anthurium Developers Limited ("ADL") a wholly owned subsidiary of the Company is exploring the possibility of taking up real estate development projects. Industrial Cluster Private Limited ("ICPL") (formerly known as Mahindra Housing Private Limited) a wholly owned subsidiary of the Company is exploring the possibility of taking up the development of an industrial park in Gujarat. Mahindra Industrial Park Chennai Limited was a wholly owned subsidiary of Mahindra World City Developers Limited. During the financial year 2015-16, Mahindra World City Developers Limited entered into a Joint Venture Agreement with Sumitomo Corporation, Japan to set up an Industrial Park in North Chennai (the NH-5 corridor) on approximately 300 acres. In terms of the Joint Venture Agreement, Mahindra Industrial Park Chennai Limited which was a wholly owned subsidiary of Mahindra World City Developers Limited is now a joint venture between Mahindra World City Developers Limited and Sumitomo Corporation in the ratio of 60:40 respectively. Accordingly, Mahindra Industrial Park Chennai Limited is a subsidiary of Mahindra World City Developers Limited and consequently, a subsidiary of the Company. Mahindra Water Utilities Limited (MWUL) is engaged in the business of operation and maintenance service for water and sewerage facilities at Tirupur, India. During the year under review, Mahindra Infrastructure Developers Limited, a wholly owned subsidiary of the Company acquired additional 48,999 equity shares in MWUL, as a result MWUL has become a 98.99% subsidiary of Mahindra Infrastructure Developers Limited and consequently a subsidiary of the Company. Total consideration paid for 48,999 equity shares was Rs 48,999. The difference between proportionate Net asset of MWUL as on the date of acquisition (27th July, 2015) and purchase consideration so paid, of Rs. 2,364.10 lakhs, has been transferred to Capital Reserve in consolidated financial statement. JOINT VENTURE COMPANIES Mahindra Homes Private Limited (MHPL) (earlier known as Watsonia Developers Private Limited and prior to that Watsonia Developers Limited), a 50:50 joint venture between the Company and SCM Real Estate (Singapore) Private Limited, is developing in collaboration with a developer, and land owning companies, a group housing project "Luminare" at NCR on approximately 6.79 acres and a residential project "Windchimes" at Bangalore on approximately 5.85 acres. The company is exploring the possibility of undertaking additional projects in residential development segment in India. Mahindra Inframan Water Utilities Private Limited (MIWUPL) is a 50 percent joint venture company and is exploring the possibility of undertaking suitable business propositions. ASSOCIATE COMPANIES Topical Developers Private Limited and Kismat Developers Private Limited, the associate companies of the Company are looking out for appropriate business opportunities in the space of real estate development. During the year, Mahindra Water Utilities Limited, which was a Joint Venture company, became a subsidiary of the Company. No other company has become 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 relevant Accounting Standards (AS) viz. AS 21 on consolidated financial statement read with AS 23 on accounting for investments in Associates and AS 27 on financial reporting of interest in joint ventures issued by the Institute of Chartered Accountants of India form part of this Annual Report. The financial statements of Subsidiaries, Associates and Joint Venture companies 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 weblink: <http://www.mahindralifespaces>. com/investors/financial-information. The Company Secretary will make these documents available upon receipt of a request from any member of the Company interested in obtaining the same. These documents 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 Company's operations forms a 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 of conditions of corporate governance as stipulated under Para E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") forms a part of this Annual Report. SUSTAINABLE DEVELOPMENT Your Company has been at the forefront of the real estate industry in India to achieve the mission of 'Transforming urban landscapes by creating sustainable communities'. The Company has done this by putting sustainability as a core agenda for the Company. The details of Company's approach to sustainability are covered in the Sustainability Report at page 169 of the Annual Report. The Business Responsibility Reporting (BRR) as part of the Annual Report as required by Regulation 34 (2) (f) of SEBI LODR is not applicable to your Company for the financial year ended on 31st March, 2016. 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 new Companies Act, 2013, pledges to spend, two per cent of the average net profits made during the three immediately preceding financial years specifically towards CSR initiatives. The Company has constituted Corporate Social Responsibility Committee comprising Mr. Arun Nanda — Non Executive Non-Independent Director, Mr. Shailesh Haribhakti — Non Executive Independent Director and Ms. Anita Arjundas — Managing Director & CEO. The Role of the Committee is to formulate and recommend a CSR policy to the Board, to recommend amount of 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 implementation of the CSR projects or programs or activities undertaken by the Company. The Company's CSR Policy lays out the vision, objectives and implementation mechanisms. The Company's CSR policy is available on the Company's web link at <http://www>. mahindralifespaces.com/pdf/mldl%20csr%20policy-final-cln.pdf The Company's CSR activities have traditionally focussed 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 Esops. 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. Of the total budget of Rs. 377.26 lakh for FY 2015-16, the Company had earmarked an amount of Rs. 132.73 lakh towards contribution as corpus by the Company to support the establishment of a Centre of Excellence (CoE) for Sustainable Habitats by TERI with the objective of improving energy efficiency in India's residential buildings sector. The discussion and requisite documentation with TERI, although was at an advanced stage, could not be completed by 31st March, 2016. As a result, the amount of Rs. 132.73 lakh which was earmarked for aforesaid contribution remained unspent as on 31st March, 2016. The Board has approved that any unspent amount, out of the minimum required CSR expenditure of the FY 2015-16 be carried forward to the next year provided that the carried forward amount shall be over and above the next year's CSR allocation equivalent to atleast 2% of the average net profit of the Company of the immediately preceding three years. The annual report on the CSR activities in the prescribed format is at Annexure 1 to this Report. Details of the Company's approach towards CSR including overview of projects or programmes undertaken / proposed to be undertaken are covered in the Sustainability Report at page 169 of this Annual Report. DIRECTORS Pursuant to Section 152 of the Companies Act, 2013 and Article 116 read with 118 of the Article of Association of the Company, Ms. Anita Arjundas (DIN: 00243215) a Executive Non-Independent Director retires by rotation at the 17th Annual General Meeting of the Company and being eligible has offered herself for re-appointment. Pursuant to Section 152, 160, 161 and all other applicable provisions of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Dr. Anish Shah (DIN : 02719429), a Non-executive and Non-independent Director who was appointed as an Additional Director on 28th August, 2015, ceases to hold office as per the provisions of Section 161 of the Companies Act, 2013, at the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160 (1) of the Companies Act, 2013 from a Member in writing proposing his candidature for the office of Director alongwith requisite deposit. Brief resume of Ms. Anita Arjundas and Dr. Anish Shah, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees and shareholding as stipulated under Regulation 36(3) of SEBI LODR, 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 the above Directors i.e. Ms. Anita Arjundas and Dr. Anish Shah are not disqualified from being re-appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013. Pursuant to the provisions of the Companies Act, 2013 and Part D of Schedule II of SEBI LODR, evaluation of every Director's performance was done by Nomination and Remuneration Committee. The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by the Independent Directors. Evaluation of Independent Directors was carried out by the entire Board of Directors, excluding the Director being evaluated. 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. The Directors expressed their satisfaction with the evaluation process. The Company has received declarations from each of the Independent Directors confirming that they meet the criteria of Independence as provided in sub-section 6 of Section 149 of the Companies Act, 2013 and in Regulation 16(1) (b) of SEBI LODR. The details of familiarisation programme for Independent Directors have been disclosed on website of the Company and is available at the link: <http://www.mahindralifespaces.com/media/> newsevents_file/detailsofd-0f2f1bb18e3bb62.pdf The following policies of the Company are attached herewith and marked as Annexure 2, Annexure 3 and Annexure 4; 1. Policy on appointment of Directors and Senior Management (Annexure 2) 2. Policy, as modified on 10th June, 2016, on Remuneration of Directors (Annexure 3) and 3. Policy, as modified on 10th June, 2016, on Remuneration of Key Managerial Personnel and Employees (Annexure 4) 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. MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards - 1 (SS-1) issued by ICSI and SEBI LODR. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(3)(c) 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, 2016 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 this Act 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 were 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 with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function and significant internal audit findings. COMPOSITION OF AUDIT COMMITTEE The Audit Committee of the Company as on 31st March, 2016 comprised of three independent Directors, namely Mr. Sanjiv Kapoor, Mr. Shailesh Haribhakti, Dr. Prakash Hebalkar and one Non-Executive Non-Independent Director, Dr. Anish Shah. Mr. Sanjiv Kapoor is the Chairman of the Committee. During the year, Mr. Anil Harish, Non-executive Independent Director resigned from the Board of the Company and consequently ceased to be a member of the Audit Committee effective 16th June, 2015. Mr. Uday Phadke, Non-executive Non-Independent Director retired by rotation at the 16th Annual General Meeting and consequently ceased to be a member of the Audit Committee effective 31st July, 2015. The Board at its Meeting held on 28th August, 2015 appointed Dr. Prakash Hebalkar Non-executive Independent Director and Dr. Anish Shah Non-executive Non-Independent Director, as members of the Audit Committee. 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 In terms of provisions of Regulation 22 read with Regulation 4(2)(d)(iv) of SEBI LODR and sub-section 9 of section 177 of Companies Act, 2013, the Company has modified its Whistle Blower Policy w.e.f. 28th January, 2016. The Policy is for stakeholders including directors and employees of the Company and their representative bodies 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 employees and Directors. 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 Head - Legal & Secretarial, Chief Financial Officer and Chief Ethics Officer (Head-Human Resources). During the year, no such incidence was reported and no personnel were denied access to the Chairman of the Audit Committee or to the Chairman of the Company or to the Corporate Governance Cell. The modified Whistle Blower Policy of the Company is available at web link: <http://www.mahindralifespaces.com/media/> newsevents_file/whistleblo-9e83538439d221f.pdf RISK MANAGEMENT The Company already has in place the process to inform the Board about the risk assessment and minimisation procedures. The Company 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 w.r.t. Risk Management Committee is not applicable to your Company. However, the Company has constituted a "Risk Management Committee" consisting of Mr. Shailesh Haribhakti, Non-Executive Independent Director and Ms. Anita Arjundas, MD & CEO of the Company and the Chief Financial Officer, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. The Board reviews implementation and monitoring of the risk management plan for the Company including identification therein of elements of risks, if any, which in the opinion of the Board may threaten the existence of the Company. AUDITORS M/s. B. K. Khare & Co., Chartered Accountants, Mumbai (Registration Number- 105102W), retire as Auditors at the 17th Annual General Meeting. As required under the provisions of Section 139 and 141 of the Companies Act, 2013, the Company has received a written consent and certificate from M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, proposed to be re-appointed as Auditors for one year i.e. from the conclusion of the ensuing Annual General Meeting up to the conclusion of the 18th Annual General Meeting of the Company, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section and that they are not disqualified to be appointed as Auditors of the Company. The Board has recommended to the shareholders for approval re-appointment of M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, as the Statutory Auditors to hold office from the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration. The notes of the financial statements referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation, disclaimer or adverse remark. COST AUDITOR The Board of Directors, on recommendation of the Audit Committee and subject to approval of the members on the remuneration to be paid to the Cost Auditor, has appointed CMA Vaibhav Prabhakar Joshi, Practising Cost Accountant, Mumbai, as Cost Auditor of the Company, for the Financial Year 2015-16, for conducting the audit of the cost records maintained by the Company for the various products as mandated by the Central Government, pursuant to its order dated 30th June, 2014 and any amendments thereof. SECRETARIAL AUDITOR The Board has appointed M/s. Martinho Ferrao & Associates, practising Company Secretaries, to conduct the secretarial audit of the Company for the financial year(s) commencing on and from 1st April, 2014. The Secretarial Audit report for the financial year ended on 31st March, 2016 is annexed herewith and marked as Annexure 5 to this Report. The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 As the Company is engaged in the business of providing Infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of the same are provided in the standalone financial statement at Note no.13 and 19 Particulars of investment made under Section 186 of the Companies Act, 2013 are provided in the standalone financial statement at it's Note no. 12. CONTRACTS AND ARRANGEMENTS WITH RELATED D A DTIPQ 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 accordance with the policy of the Company on materiality of related party transactions. 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 related party transactions and also on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link:<http://www.mahindralifespaces.com/media/newsevents_file/> policyonma-20883dd2bb48c0f.pdf The Directors draw attention of the members to Note 39 to the standalone financial statement which sets out related party disclosures. DEPOSITS, LOANS AND ADVANCES The Company has not accepted any deposits from the public or its employees during the year under review. 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 with the Company, are furnished separately at Annexure 6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars 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 are given in the Annexure 7 to this report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The Company had 15 employees who were in receipt of remuneration of not less than Rs. 60,00,000 during the year ended 31st March, 2016 or not less than Rs. 5,00,000 per month during any part of the year. Disclosures with respect to the remuneration of Directors, KMPs and employees as required under section 197 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 8 to this Report. Details of employee remuneration as required under provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company 21 days before the Annual General Meeting, during the working hours and shall be made available to any Shareholder on request. Such details are also available on the Company's website at: <http://www.mahindralifespaces.com/> investors/disclosures-sebi. None of the employees listed in the aforesaid details is a relative of any Director of the Company. None of the employees of the Company, employed throughout the financial year or part thereof, was in receipt of remuneration in the year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director and holds by himself / herself or along with his/her spouse and dependent children, 2 % or more of the equity shares of the Company. EXTRACT OF ANNUAL RETURN The details forming part of the Extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure 9 and forms part of this Report. REGISTRAR AND SHARE TRANSFER AGENT The Securities Exchange Board of India (SEBI) had vide its Ex-Parte Ad Interim Order No. WTM/RKA/MIRSD2/41/2016 dated 22nd March, 2016 (SEBI Order) directed clients of Sharepro Services (India) Private Limited (Sharepro) to audit the records and systems of Sharepro with respect to dividend paid and transfer of securities to determine whether dividends have been paid to actual / beneficial holders and whether securities have been transferred as per provisions of law during last least 10 years. SEBI had also advised all the companies who are / were clients of Sharepro to carry out / switchover their activities related to a registrar to an issue and share transfer agent, either in-house or through another registrar to an issue and share transfer agent registered with SEBI. Pursuant to the above order and pursuant to Regulation 30 of SEBI LODR, the Company on 10th June, 2016 has: 1. The Company has appointed Ernst & Young LLP to conduct audit as required in the SEBI order; 2. Issued a notice to Sharepro Services (India) Private Limited (Sharepro), Registrar & Share Transfer Agent (R&T Agent) of the Company, to terminate the Memorandum of Understanding, effective from close of business hours on 17th June, 2016; 3. Decided to appoint Karvy Computershare Private Limited (Karvy) having its Corporate office at Karvy Selenium, Tower- B, Plot No 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500032 and Investor Relation Centre at 24 B, Rajabahadur Mansion, Ground Floor, Ambalal Doshi Marg, Fort, Mumbai - 400 023, as the new Registrar and Share Transfer Agent of the Company in place of Sharepro with effect from 18th June, 2016. Sharepro will however continue to provide its support till such time the database is transferred to Karvy and the electronic connectivity is established between Karvy and the Depositories. The Company is in process of making necessary arrangements in order to ensure smooth transition from Sharepro to Karvy. GENERAL No fraud has been reported during the audit conducted by the Statutory Auditors, Internal Auditors, Secretarial Auditors and Cost Auditors of the Company. During the year under review, no revision was made in the previous financial statement of the Company. During the year ended on 31st March, 2016, there were no cases filed / reported pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013. No penalties/strictures were imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to capital market since the listing of the Company's equity shares. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operation in future. 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. ACKNOWLEDGMENT The Directors would like to thank all shareholders, customers, bankers, contractors, suppliers, joint venture partners and associates of the 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 the employees of the Company. For and on behalf of the Board Anita Arjundas Managing Director & CEO DIN: 00243215 Shailesh Haribhakti Non-Executive Independent Director DIN: 00007347 Place : Mumbai, date : 10th June, 2016 |