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Directors Report of Mahindra Holidays & Resorts India Ltd.

Mar 31, 2023

The Directors of the Company are pleased to present their Twenty Seventh Report together with the Audited Financial Statements of the Company for the year ended March 31, 2023.

1. Operations and Financial Overview

The Company is the largest Vacation Ownership company outside the US and is 6^th largest globally. The Company has created a unique and sustainable vacation ownership business and the Company is the No. 1 leisure hospitality player in the country. It has established itself as the market leader in the family holidays space, in India, following a two-pronged growth strategy of providing a diverse range of holidaying options and superlative service to ensure customer delight.

The Company has delivered a strong operational and financial performance during the year under review with high level of resort occupancies, highest resort revenues along with a healthy growth in member additions and room inventory. The creditable performance of the Company brings out the resilience of its business model and at the same time, highlights its ability to move swiftly in tough conditions. It also achieved highest amount of upgrades which shows the trust and confidence its members repose in the Club Mahindra Brand, which is a crucial differentiator and contributes immensely to the Company''s performance.

During the year under review, the Company added 17,477 new members to its vacation ownership business. Addition in the members is a result of continued success of Company''s pull-based digital and referral leads as well as reaching out to prospects by way of engagement through more innovative

technological platforms, alliances and corporate partnerships. During the year under review, the Company has been reinventing its marketing strategy around digital formats and platforms as media consumption has shifted towards mobile devices.

In the FY 2022-23, the Company added 372 rooms, taking the total inventory to 4,940 room units across its 102 resorts as of March 31, 2023. Along with 33 resorts of Holiday Club Resorts Oy (HCR), the Company is offering the Club Mahindra members an access to over 143 resorts in India, Asia, Europe and USA.

The Company''s total income (including other income) was '' 1,305.56 crore in 2022-23 compared to '' 1,070.72 crore in 2021-22. Profit Before Tax (PBT) grew to '' 214.06 crore in 2022-23 from '' 203.53 crore in 2021-22. PBT (excluding translation forex gain on ICDs to subsidiaries and gain on fair valuation of investment in unlisted company) also grew to '' 183.31 crore in 2022-23 from PBT (excluding profit on sale of investment in Nreach Online Services Private Limited, lease rent waiver and interest on income tax) of '' 160.40 crore in 2021-22. Profit After Tax (PAT) grew to '' 158.57 crore in 2022-23 from '' 151.30 crore in 2021-22. Diluted Earnings Per Share (EPS) for 2022-23 stood at '' 7.89 compared to '' 7.55 in 2021-22.

Further, the Company''s Consolidated total income (including other income) was '' 2,623.90 crore in 2022-23 compared to '' 2,178.85 crore in 2021-22. Consolidated PBT was '' 170.65 crore in 2022-23 compared to '' 110.56 crore in 2021-22. Consolidated PAT was '' 113.82 crore in 2022-23 compared to '' 67.64 crore in 2021-22. Consolidated Diluted EPS for 2022-23 stood at '' 5.73 compared to '' 3.37 in 2021-22.

2. Financial Highlights (Standalone)		('' in crore)
	2022 - 2023	2021 - 2022
Income:
Income from sale of Vacation Ownership and other services	1,196.18	960.68
Other Income	109.38	110.04
Total Income	1,305.56	1,070.72
Expenditure:
Less: Employee Cost and Other Expenses	923.29	726.15
Profit before Depreciation, Interest and Taxation	382.27	344.57
Less: Depreciation	139.09	119.89
Interest	29.13	21.16
Profit for the year before Tax	214.05	203.52
Less: Provision for Tax - Current Tax	67.88	26.66
- Deferred Tax (net)	(12.40)	25.56
Net Profit for the year after Tax	158.57	151.30
Other Comprehensive Income - Net of Tax	6.38	70.29
Total Comprehensive Income for the year	164.95	221.59

3. Share Capital

During the year under review, the Company has allotted 6,58,464 Equity Shares of '' 10 each to the eligible employees/ directors, pursuant to exercise of stock options granted under the Company''s Employee Stock Option Schemes.

Consequent to the aforesaid allotments, the Issued, Subscribed and Paid up Share Capital of the Company as on March 31, 2023 was '' 2,01,25,66,400 (Rupees Two Hundred and One Crore Twenty Five Lakhs Sixty Six Thousand and Four Hundred Only) dividend into 20,12,56,640 (Twenty Crore Twelve Lakh Fifty Six Thousand Six Hundred and Forty) Equity Shares of '' 10 (Rupees Ten) each.

During the year under review, the Company did not issue shares with differential voting rights. Details of the Directors'' shareholding as on March 31, 2023, are mentioned in the Corporate Governance Report, which forms part of this Annual Report.

4. Dividend

In compliance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulations"),

the Dividend Distribution Policy of the Company is annexed herewith as Annexure I and is also available at the Company''s website at: https://www.clubmahindra.com/investors/investor-information.

The Company had changed its revenue recognition policy in accordance with Ind AS 115 during financial year 2018-19. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and has been stated as Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year from 2006 till 2018. The Company has sought clarification from Ministry of Corporate Affairs (MCA) that, this Transition Difference should not be considered for the purpose of declaration of dividend under the provisions of Section 123(1) of the Companies Act, 2013 (âthe Act"). The declaration of dividend, if any, shall be subject to receipt of clarification from MCA.

5. Transfer to Reserve

The Directors of the Company do not propose to transfer any amount to reserves.

6. Related Party Transactions

The Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review were on arm''s length basis and in the ordinary course of business. The Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions (âRPT Policy"). Accordingly, Form AOC-2 is not applicable to the Company. Further, transactions entered by the Company with

related parties in the normal course of business were placed before the Audit Committee and the Board and the same were approved.

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

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

The Directors of the Company draw attention of the Members to Note No. 51 to the Standalone Financial Statements which sets out related party disclosure.

7. Particulars of Loans and Advances, Guarantees, Investments and Securities

As the Company is engaged in the activity covered under Schedule VI of the Act, the provisions of Section 186 of the Act relating to loans given, guarantees granted or securities provided are not applicable to the Company. However, the details of such loans given and guarantees given to / on behalf of subsidiary companies are provided in Note Nos. 9, 10 and 21 to the Standalone Financial Statements. These loans and guarantees provided are proposed to be utilized by the respective recipients for their business purposes. Particulars of investments made by the Company are provided in the Standalone Financial Statements at Note Nos. 7 and 16.

During the year under review, the Company has granted additional corporate guarantees on behalf of MHR Holdings (Mauritius) Limited, Mauritius (âMHR Holdings"), subsidiary company of the Company, as a collateral security towards financial facilities amounting to â¬ 3 million (Total Guarantee â¬ 33 million) availed by MHR Holdings from Axis Bank Limited. The aforesaid financial facility was an additional guarantee availed by MHR Holdings to finance the existing loan amounting to â¬ 29 million availed from Axis Bank Limited for providing financial assistance to the subsidiary companies.

During the year under review, the Company has subscribed to additional 4,88,321 Equity Shares of Great Rocksport Private Limited (âRocksport") in two installments for a total cash consideration of '' 12 crore. With completion of this second tranche investment, the Company''s shareholding in Rocksport has gone up from 6.67% to 23.42% and it became an associate of the Company with effect from April 16, 2022 in accordance with IND AS 28. Rocksport is engaged inter-alia, in the business of undertaking and providing outdoor entertainment, adventure programs, educational adventure tours and retailing of branded adventure products in India. The investment in Rocksport will increase customer engagement avenues for the Company, whereby the Company and Rocksport can engage in multiple formats for its members within and outside the resorts of the Company.

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

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

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

The Company has received an order (''the Order'') from National Financial Reporting Authority (''NFRA'') on March 29, 2023. As per the Order, the Company is required to review its accounting policies and practices in respect of disclosure of operating segments and timing of recognition of revenue from customers and take necessary measures to address the observations made in the Order. Further, such documentation is also required to be verified by the Company''s statutory auditor. The process review as per the Order is in progress.

For the year ended March 31, 2023, the management has assessed the application of its accounting policies relating to segment disclosures and revenue recognition. Basis the current assessment by the Company, the existing accounting policies, practices and disclosures are in compliance with the respective Ind AS and accordingly, have been applied by the Company in the preparation of financial results.

Further, the Shareholders'', based on the approval of Board of Directors of the Company, through Postal Ballot Notice dated November 30, 2022, has approved the shifting of registered office of the Company from the State of Tamil Nadu to the State of Maharashtra, subject to the approval of regulatory authorities. The Regional Director, Southern Region, Ministry of Corporate Affairs vide its Order dated April 12, 2023 has approved the Company''s application for the aforesaid shifting of Registered Office of the Company.

9. Corporate Social Responsibility

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

10. Sustainability

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

11. Business Responsibility and Sustainability Report (BRSR)

The Business Responsibility and Sustainability Report (BRSR) of the Company for the financial year 2022-23, as required under Regulation 34(2)(f) of the SEBI Listing Regulations, is a part of this Annual Report and also available on the website of the Company: https://www.clubmahindra.com/investors/ financials.

The BRSR provides insights on the initiatives taken by the Company from an environmental, social and governance perspective.

The Company regularly carries out several initiatives that contribute to the sustainability and well-being of the environment and the communities in which it operates. The Company also recognises the importance of sustainability and is committed to conserve the ecological integrity of its locations through responsible business practices. Sustainability is thus a core agenda for the Company.

12. Corporate Governance Report

A Report on Corporate Governance along with a certificate from the Statutory Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations, forms a part of this Annual Report.

13. Management Discussion and Analysis Report

A detailed analysis of the Company''s operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Resort Operations, Member Experience, Business Excellence, Human Resources and Information Technology are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

14. Whistle Blower Policy & Vigil Mechanism

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

15. Employees'' Stock Options

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

Accordingly, the Company formulated the Employees'' Stock Option Schemes namely - ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2006'' (âMHRIL ESOS 2006"), ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2014'' (âMHRIL ESOS 2014") and ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2020'' (MHRIL ESOS 2020") after obtaining requisite approvals from the Shareholders. All the balance shares available under MHRIL ESOS 2006 together with any other shares represented by Options that may lapse for any reason thereat, was/will be considered for issuing/ granting Options to the Employees pursuant to the provisions under MHRIL ESOS 2014.

During the year under review, pursuant to the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (âSEBI SBEB and SE Regulations") (as amended from time to time), a total of 1,56,701 Options were granted under the MHRIL ESOS 2020 by the Nomination and Remuneration Committee to the eligible employees and noted by the Board.

Details required to be provided under Regulation 14 of the SEBI SBEB and SE Regulations and Rule 12(9) of the Companies (Share Capital & Debentures) Rules, 2014 are available on the Company''s website at: http://www.clubmahindra.com/ about-us/investor-relations/financials.

A certificate from the Secretarial Auditor of the Company confirming that the MHRIL ESOS 2006, MHRIL ESOS 2014 and MHRIL ESOS 2020, have been implemented in accordance with the SEBI SBEB and SE Regulations and the resolutions passed by the Shareholders, will be available for inspection by Members at the ensuing AGM.

16. Subsidiaries, Joint Venture and Associate companies

During the year under review, the Company has incorporated an entity named âMahindra Holidays & Resorts Harihareshwar Limited" (MHRHL) in Mumbai, Maharashtra on August 23, 2022 as a wholly owned subsidiary of the Company. MHRHL has been incorporated as a Special Purpose Vehicle company for upgradation, operation and maintenance of the Maharashtra Tourism Development Corporation (MTDC) Resort at Harihareshwar under Public Private Partnership (âPPP") model.

During the year under review, pursuant to the conversion of 25,000 7% Non- cumulative redeemable participating optionally convertible preference shares of '' 10 each of Guestline Hospitality Management and Developement Services Limited (âGuestline") into 25,000 equity shares of '' 10 each on December 2, 2022, Guestline has become a subsidiary of the Company with effect from December 3, 2022 with 98.39% stake as on March 31, 2023.

The Company has increased its equity stake in Rocksport and consequently, Rocksport has become an Associate of the Company with effect from April 16, 2022.

HCR Management Oy (âHCRM") is a wholly owned subsidiary of Covington S.a.r.l., Luxembourg (âCovington") and in turn subsidiary of the Company. During the year under review, HCRM has been merged with Holiday Club Resorts Oy (âHCR") and consequently, HCRM has ceased to be a subsidiary of Covington and of the Company with effect from February 28, 2023.

As of March 31, 2023, the Company had 21 subsidiaries (including 12 indirect subsidiaries), 2 joint venture companies (indirect) and 2 associate companies (1 indirect).

17. Performance of Subsidiaries

Domestic Subsidiaries

Gables Promoters Private Limited (âGables"), is a wholly owned subsidiary of the Company. Gables operates a resort property of 115 rooms at Naldehra, Himachal Pradesh. The Company avails rooms in the resort property of Gables for usage of its guests and vacation ownership members. Gables had also entered into a Public-Private Partnership (PPP) contract with Himachal Pradesh Government to renovate and operate a resort in Janjehli (Mandi District). During the year under review, Gables has acquired a resort in Ooty named âDanish Villa" which was earlier managed under a lease arrangement.

Mahindra Hotels and Residences India Limited (âMHARIL") is a wholly owned subsidiary of the Company. During the year under review, MHARIL has acquired a resort situated at Rajasthan. Improvement Plan along with acquisition of adjacent land of the resort is underway.

Guestline is a non-operative company and generates income from investments.

Rocksport is engaged inter-alia, in the business of undertaking and providing outdoor entertainment, adventure programs, educational adventure tours and retailing of branded adventure products in India.

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd, Malaysia (âHeritage Bird") is a wholly owned subsidiary of the Company. Heritage Bird''s principal activities are holding of investments and leasing of properties. Heritage Bird has rooms/units in apartment properties in a well-known location in Kuala Lumpur, Malaysia.

MH Boutique Hospitality Limited, Thailand (âMH Boutique"), in which the Company holds 49% of equity stake, is a subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand (âInfinity").

Infinity is the subsidiary company of MH Boutique and by virtue of the same is also subsidiary of the Company. Infinity owns and operates a hotel/apartment property at Bangkok, Thailand. The Company avails rooms in the hotel property of Infinity for usage of its guests and vacation ownership members.

MHR Holdings is a wholly owned subsidiary of the Company. The principal activity of MHR Holdings is to hold investments. Currently, it holds investments in Covington.

Covington is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of the Company. The principal activity of Covington is to hold investments. During the previous year, it held investments in HCR and HCR Management Oy (âHCRM"), Finland. However, during the year under review, HCR Management Oy (âHCRM") was merged with Holiday Club Resorts Oy (âHCR"). As on March 31, 2023, Covington holds 100% stake in HCR.

HCR, subsidiary of Covington and in turn of the Company, is the largest operator of leisure hotels in Finland and the largest vacation ownership company in Europe. As of March 31, 2023, HCR has 33 resorts of which 25 are located in Finland, 2 in Sweden and 6 in Spain. During the year under review, total income of HCR stood at â¬ 144.21 million, compared to â¬ 122.07 million in 2021-22. Earnings before interest, tax, depreciation and amortization (EBITDA) for the year were â¬ 4.96 million, compared to (â¬ 0.32) million in 202122. Overall, HCR recorded a PBT and PAT of (â¬ 0.51) million and (â¬ 0.52) million respectively in 2022-23. During the year under review, the Finish Economy''s growth forecast has been revised downwards on account of the ongoing Russia-Ukraine conflict and rising inflationary pressures. Consumer confidence remained low but gradually improved in the last quarter, with inflation and energy prices coming off from their peak levels. HCR witnessed revenue seasonality on account of summer holidays in Q2 and skiing holidays in Q4. The timeshare demand picked up due to its relatively lower transaction price for the customer. Spa Hotels outperformed the local hospitality market in Finland contributing to 58% of total turnover of HCR.

HCR has implemented several actions to improve its efficiency and adapt the cost base to the changing market conditions. Given the robust business model, improvement in consumer sentiment and buoyancy in leisure travel, the outlook for HCR is positive.

Arabian Dreams, (a Joint Venture company as per the Act and Subsidiary company as per Ind AS) operates a 75-room hotel property in Dubai (UAE) taken on lease basis. The Company avails rooms/apartments in the hotel property of Arabian Dreams for usage of its guests and vacation ownership members.

Associate Companies

Rocksport is an associate of the Company & Kiinteisto Oy Seniori-Saimaa is an associate of HCR and consequently, associate of the Company.

Joint Venture Companies

Tropiikin Rantasauna Oy and Kiinteisto Oy Vierumaen Kaari are Joint Venture companies (JV) of HCR and consequently, JV of the Company.

A report on the performance and financial position of the subsidiaries, associate and joint venture companies whose financial statements are considered for preparation of Consolidated Financial Statements of the Company as per the Act (in the prescribed format i.e. âForm AOC-1") is provided as Annexure to the Consolidated Financial Statements.

The policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website at:https://www.clubmahindra.com/investors/investor-information.

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

18. Directors

As on the date of this report, the Company has Nine Directors, which includes Five Independent Directors, Three NonExecutive Non-Independent Directors and One Managing Director.

As informed in the previous Annual Report, Mr. Sridar Iyengar ceased to hold office as an Independent Director of the Company with effect from August 1, 2022, upon completion of his tenure as approved by the Shareholders. The Board places on record its sincere appreciation for the

valuable contributions made by Mr. Sridar Iyengar during his association with the Company.

Based on the recommendations of the NRC, the Board of Directors at its meeting held on November 2, 2022 had appointed Mr. Rajat Kumar Jain, as an Additional Director in the category of an Independent Director of the Company, not liable to retire by rotation, for a period of 5 (five) consecutive years with effect from November 3, 2022. Subsequently, the Shareholders through Postal Ballot Notice dated November 30, 2022, approved the appointment of Mr. Rajat Kumar Jain as a Non-Executive Independent Director of the Company, not liable to retire by rotation, for a period of 5 years effective from November 3, 2022.

In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Mr. Arun Nanda (DIN: 00010029), being longest in the office, is liable to retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. However, Mr. Arun Nanda has expressed his desire not to seek re-appointment and accordingly, he will hold office as a Non-Executive Director and Chairman of the Company till the conclusion of the ensuing AGM of the Company.

The Board of Directors would like to place on record their sincere appreciation for Mr. Nanda''s contribution to the Company since it''s inception, during which his visionary leadership, mentorship, strategic direction and stewardship contributed immensely to the growth of the Company. The Board also appreciated him for conceptualising Mahindra Holidays vacation ownership model and its success story and wish him many happy and productive years ahead.

Based on the recommendation of the Nomination and Remuneration Committee and subject to approval of Shareholders at the ensuing AGM, the Board of Directors at their meeting held on April 25, 2023 had appointed Mr. C.P. Gurnani as an Additional Director in the category of NonExecutive Non-Independent Director of the Company w.e.f. April 26, 2023, liable to retire by rotation and as Non-Executive Chairman of the Company with effect from July 26, 2023. He shall hold office as an Additional Director upto the date of the ensuing AGM. The Company has received the requisite Notice in writing from a Member under Section 160 of the Act proposing his candidature for the office of Director of the Company.

The Board has recommended to the shareholders Mr. Gurnani''s appointment at the forthcoming Annual General Meeting as a Non-Executive Non-Independent Director of the Company, liable to retire by rotation. Brief resume and other details of Mr. Gurnani, in terms of Companies Act, 2013, SEBI Listing Regulations and Secretarial Standards on General Meeting, are provided in the Notice sent alongwith the Annual Report. None of the Directors of the Company are inter-se related to each other. Further he is not disqualified from being

appointed as Director by virtue of the provisions of Section 164 of the Companies Act, 2013.

Declaration by Independent Directors

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

In terms of Regulation 25(8) of SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties. Based on the declarations received from the independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are Independent of the Management. In the opinion of the Board, there has been no change in the circumstances affecting their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.

Further, the Independent Directors of the Company have also confirmed that they have registered themselves with the Indian Institute of Corporate Affairs, Manesar and have included their name in the databank of Independent Directors within the statutory timeline pursuant to the provisions of Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

19. Key Managerial Personnel (KMPs)

As on March 31, 2023, Mr. Kavinder Singh, Managing Director & CEO, Mr. Sujit Vaidya, Chief Financial Officer and Mr. Dhanraj Mulki, General Counsel & Company Secretary, are the KMPs as per the provisions of the Act.

20. Policy on Directors'' Appointment and Remuneration

The salient features of the following policies of the Company are attached herewith and marked as Annexure IV:

1. Policy on Appointment of Directors and Senior Management;

2. Policy on Remuneration of Directors; and

3. Policy on Remuneration of Key Managerial Personnel and Employees.

The aforesaid policies are also available at the link https:// www.clubmahindra.com/investors/investor-information.

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

21. Board Evaluation

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

22. Number of Board Meetings

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

23. Composition of Audit Committee

The Audit Committee consists of Mr. Diwakar Gupta as its Chairman and Mr. Sanjeev Aga, Mrs. Sangeeta Talwar and Mr. Ruzbeh Irani, as its other members. Further details are provided in the Corporate Governance Report, which forms a part of this Annual Report.

24. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, the Directors of the Company state that:

a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

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

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

25. Internal Financial Controls and their Adequacy

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

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.

26. Consolidated Financial Statements

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

For the purpose of preparation of the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2023 as per Ind AS, the latest audited financial results of all the subsidiaries, two associate companies and two joint venture companies pertaining to HCR were considered and consolidation was done as per the provisions of Section 129 of the Act.

27. Risk Management

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

28. Disclosure requirements

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

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

0 During the year under review, there was no change in the nature of business of the Company.

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

0 During the year under review, no revision was made in the previous financial statements of the Company.

0 During the year under review, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016.

0 The Company has no borrowings as on March 31, 2023 and hence, the requirement of providing details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks / financial institutions along with the reasons thereof is not applicable to the Company.

29. Auditors

A) Statutory Auditors

During the year under review, the Shareholders at their 26^th AGM held on July 30, 2022 had approved the reappointment of B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022), as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years till the conclusion of the 31^st AGM of the Company to be held in the year 2027.

The Auditors'' Report on the financial statements of the Company for the year ending March 31, 2023 is unmodified i.e. it does not contain any qualification, reservation or adverse remark. The Auditors'' Report is enclosed with the financial statements forming part of the annual report.

B) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed M Siroya and Company, Company Secretaries, to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure V.

There are no qualifications, reservations or adverse remarks made by M Siroya and Company, Company Secretaries, Secretarial Auditor of the Company in the Secretarial Audit Report.

30. Deposits

The Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date.

31. Credit Rating

India Ratings and Research Private Limited has re-affirmed Long-Term Issuer Rating at ''IND A '' with a stable outlook to the Company. The ''IND A '' rating indicates adequate degree of safety regarding timely servicing of financial obligations.

32. Material Changes and Commitment affecting Financial Position of the Company

There are no material changes and commitments, affecting financial position of the Company which have occurred between the end of the financial year of the Company i.e. March 31, 2023 and the date of the Directors'' Report.

33. Annual Return

As per the provisions of the Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return as of March 31, 2023, is made available on the website of the Company and can be accessed at https://www.clubmahindra.com/investors/financials.

34. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. Some of these initiatives are discussed in the section on Sustainability in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

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

35. Human Resources

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management, performance management and learning and development initiatives to ensure that the Company consistently develops inspiring, strong and a credible leadership and workforce. Apart from continued investment in skill and leadership development of its people, this year the Company has also focused on

employee engagement initiatives aimed at increasing the culture of innovation and collaboration across all strata of the workforce. During the year under review, the Company has set out on the journey of transformation by blending technology in every step of the employees'' engagement. The Company has also been certified as one of ''India''s Great Places to Work For'' and recognized amongst the Top 50 ''Best companies to work for in India'' by Great Place to Work (GPTW) Institute. The Company had also qualified in the Best Workplaces Asia List - 2022. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

Disclosures pertaining to the Sexual Harassment of Women at the Workplace (Prevention, Prohibition And Redressal) Act, 2013:

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013 (âPOSH Act"). The Company has also complied with provisions relating to the constitution of Internal complaints Committee under the POSH Act and the Committee includes external members from NGO and / or members with relevant experience. There were no complaints pending at the beginning of the year. During the year under review, the Company has received one complaint under the Policy and the same has been closed.

36. Particulars of Employees

The disclosure with respect to the remuneration of Directors, KMPs and employees under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (âthe Rules"), is attached as Annexure VII and forms a part of this report.

The Company had 12 (Twelve) employees who were employed throughout the year and were in receipt of remuneration of more than '' 102 lakhs per annum. There were 3 (Three) employees employed for part of the year by the Company who were in receipt of remuneration of more than '' 8.50 lakhs per month.

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

37. Acknowledgement and Appreciation

The Directors of the Company take this opportunity to thank the Company''s Customers, Shareholders, Suppliers, Bankers, Financial Institutions and the Central and State Governments for their unstinted support. The Directors would like to place on record their appreciation to the employees at all levels for their hard work, dedication, commitment and valuable performance during the challenging times.

For and on behalf of the Board Arun Nanda

Place: Mumbai Chairman

Date: April 25, 2023 DIN: 00010029

Mar 31, 2022

Your Directors are pleased to present their Twenty Sixth Report together with the Audited Financial Statements of your Company for the year ended March 31, 2022.

1. Operations and Financial Overview

Your Company was founded in the year 1996 and during the year under review, it has reached a milestone of completing the journey of 25 years. Your Company has been a leading player in the leisure hospitality industry in India and with its subsidiary Holiday Club Resorts Oy (âHCR"), is the largest vacation ownership company outside the USA. Being the Silver Jubilee year, the year under review was one of the best years in the history of the Company. Though the financial year 2021-22 started amidst strict lock down in India with severe restrictions on travel and economic activity to contain the health emergency posed by the second wave of Covid-19 (Delta wave), your Company registered a creditable performance given the subdued macroeconomic environment and relatively poor consumer sentiment towards discretionary spending.

The Delta wave at beginning of the year under review was more severe than the third wave of Covid-19 (Omicron wave) in January 2022. Your Company was better prepared to deal with the challenges posed by both the waves of Covid-19 and was able to restart and ramp-up operations rapidly once the restrictions were lifted, minimising their impact on performance. Your Company had developed processes and capabilities in the financial year 2020-21 to operate in pandemic conditions for ensuring business continuity under lockdowns. These resulted in a considerable improvement in the performance during the year under review.

The Company has delivered a strong operational and financial performance during the year under review and has surpassed the pre-pandemic levels with high level of resort occupancies, high resort revenues along with a healthy growth in member additions and room inventory. The cash position has further improved during the year under review. The creditable performance of your Company brings out the resilience of its business model and at the same time highlights its ability to move swiftly in tough conditions. It also underscores the trust and confidence its members repose in the Mahindra brand, which is a crucial differentiator and contributes immensely to your Company''s performance in these uncertain times.

During the year under review, your Company added 12,764 new members to its vacation ownership business. Addition in

the members is a result of continued success of Company''s pull-based digital and referral leads as well as reaching out to prospects by way of engagement through more innovative technological platforms, alliances and corporate partnerships. During the year under review, your Company has been reinventing its marketing strategy around digital formats and platforms as media consumption has shifted towards mobile devices.

During the year under review, your Company added 385 rooms on a gross basis, taking the total inventory to 4,568 room units across its 84 resorts as of March 31, 2022. Along with HCR''s 33 resorts, your Company is offering the Club Mahindra members an access to over 100 resorts in India, Asia, Europe and USA.

Your Company''s total income (including other income) was '' 1,070.72 crore in 2021-22 compared to '' 908.76 crore in

2020- 21. During the year under review, your Company sold its entire stake in Nreach Online Services Private Limited (âNreach"), resulting in a gain of '' 26.30 crore, which is reflected in Other Income for the year. Other Income for

2021- 22 also includes an income of '' 12.40 crore ('' 30.75 crore in the previous year) resulting from waiver of lease rents due to the pandemic and interest income from Income Tax refund of '' 4.40 crore.

Profit Before Tax (PBT) grew to '' 203.53 crore in 2021-22 from '' 169.46 crore in 2020-21. PBT (excluding profit on sale of investment in Nreach, lease rent waiver and interest on income tax refund) also grew to '' 160.40 crore in 2021-22 from PBT (excluding lease rent waiver) of '' 138.70 crore in 2020-21. Profit After Tax (PAT) grew to '' 151.30 crore in 2021-22 from '' 125.76 crore in 2020-21. Diluted Earnings Per Share (EPS) for 2021-22 stood at '' 7.55 compared to '' 6.30 in 2020-21.

Further, your Company''s Consolidated total income (including other income) was '' 2,178.85 crore in 2021-22 compared to '' 1,847.26 crore in 2020-21. Consolidated PBT was '' 110.56 crore in 2021-22 compared to '' 2.47 crore in 2020-21. Consolidated PAT was '' 67.64 crore in 2021-22 compared to Consolidated Loss After Tax of '' 14.00 crore in 2020-21. Consolidated Diluted EPS for 2021-22 stood at '' 3.37 compared to ('' 0.66) in 2020-21.

During the year under review, your Company has issued Bonus Shares in the proportion of 1:2 i.e. 1 (one) Bonus Equity Share of '' 10 each for every 2 (two) fully paid-up Equity Shares of '' 10 each held, by capitalizing '' 66.82 crore from the Securities Premium account to Equity Share Capital of the Company and allotted 6,68,16,892 Bonus Equity Shares to the Shareholders of the Company holding shares as on September 9, 2021 (Record Date).

3. Share Capital Authorised Share Capital

During the year under review, the Board of Directors had approved the increase in Authorized Share Capital of the Company and the same was approved by the Shareholders at the 25^th Annual General Meeting (âAGM") held on September 1, 2021. Consequently, the Authorised Share Capital of the Company was increased from '' 150 crore (Rupees One Hundred and Fifty crore only) divided into 15,00,00,000 (Fifteen crore) Equity Shares of '' 10 (Rupees Ten) each to '' 300 crore (Rupees Three Hundred crore only) divided into 30,00,00,000 (Thirty crore) Equity Shares of '' 10 (Rupees Ten) each.

Paid-up Share Capital

The Board of Directors of the Company had recommended, subject to the approval of the Shareholders, issue of Bonus Shares in the proportion of 1:2 i.e. one Bonus Equity Share of '' 10 each for every two fully paid-up Equity Shares of '' 10 each held, and consequently, the same was approved by the Shareholders at the 25^th AGM held on September 1, 2021. Accordingly, the Securities Allotment Committee of the Board of Directors of the Company on September 13, 2021, had allotted 6,68,16,892 Bonus Equity Shares to the Shareholders of the Company holding shares as on September 9, 2021, being the record date fixed for this purpose.

During the year under review, the Company has also allotted 2,27,500 Equity Shares of '' 10 each to the eligible employees/ directors, pursuant to exercise of stock options granted under the Company''s Employee Stock Option Scheme 2014.

2. Financial Highlights (Standalone)		('' in crore)
	2021 - 2022	2020 - 2021
Income:
Income from sale of Vacation Ownership and other services	960.68	822.24
Other Income	110.04	86.52
Total Income	1,070.72	908.76
Expenditure:
Less: Employee Cost & Other Expenses	726.15	622.60
Profit before Depreciation, Interest and Taxation	344.57	286.16
Less: Depreciation	119.89	103.74
Interest	21.16	12.96
Profit for the year before Tax	203.52	169.46
Less: Provision for Tax - Current Tax	26.66	-
- Deferred Tax (net)	25.56	43.70
Net Profit for the year after Tax	151.30	125.76
Other Comprehensive Income - Net of Tax	70.29	31.51
Total Comprehensive Income for the year	221.59	157.27

Consequent to the aforesaid allotments, the Issued, Subscribed and Paid up Share Capital of the Company as on March 31, 2022 was '' 2,00,59,81,760 (Rupees Two Hundred Crore Fifty Nine Lakhs Eighty One Thousand Seven Hundred and Sixty only) divided into 20,05,98,176 (Twenty Crore Five Lakh Ninety Eight Thousand One Hundred and Seventy Six) Equity Shares of '' 10 (Rupees Ten) each.

During the year under review, your Company did not issue shares with differential voting rights / sweat equity. Details of the Directors'' shareholding as on March 31, 2022, are mentioned in the Corporate Governance Report, which forms part of this Annual Report.

4. Dividend

In compliance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulations"), the Dividend Distribution Policy of the Company is annexed herewith as Annexure I and is also available at the Company''s website at: https://www.clubmahindra.com/ corporate-governance/investor-information.

The Company had changed its revenue recognition policy in accordance with Ind AS 115 during financial year 201819. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and has been stated as Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year from 2006 till 2018. The Company has sought clarification from Ministry of Corporate Affairs (MCA) that, this Transition Difference should not be considered for the purpose of declaration of dividend under the provisions of Section 123(1) of the Companies Act, 2013 (âthe Act"). The declaration of dividend, if any, shall be subject to receipt of clarification from MCA.

5. Transfer to Reserve

Your Directors do not propose to transfer any amount to reserves.

6. Related Party Transactions

Your Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review were on arm''s length basis and in the ordinary course of business. Your Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions (âRPT Policy"). Accordingly, Form AOC-2 is not applicable to the Company. Further, transactions entered by the Company with related parties in the normal course of business were placed before the Audit Committee and the Board.

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

Your Directors draw attention of the Members to Note No. 50 to the Standalone Financial Statements which sets out related party disclosure.

7. Particulars of Loans and Advances, Guarantees, Investments and Securities

As your Company is engaged in the activity covered under Schedule VI of the Act, the provisions of Section 186 of the Act relating to loans given, guarantees granted or securities provided are not applicable to the Company. However, the details of such loans given and guarantees given to / on behalf of subsidiary companies are provided in Note Nos. 9 and 19 to the Standalone Financial Statements. These loans and guarantees provided are proposed to be utilised by the respective recipients for their business purposes. Particulars of investments made by your Company are provided in the Standalone Financial Statements at Note Nos. 7 and 15.

Your Company had made a strategic investment of '' 3 crore in the Equity Shares of Nreach during the financial year 201617. During the year under review, your Company has sold its entire stake consisting of 5,738 Equity Shares (10.76% stake) in Nreach for a consideration of '' 29.31 crore.

During the year under review, your Company has granted corporate guarantees on behalf of MHR Holdings (Mauritius)

Limited, Mauritius (âMHR Holdings"), subsidiary company of the Company, as a collateral security towards financial facilities amounting to â¬ 40 million and â¬ 30 million (including â¬ 15 million as revolving credit) availed by MHR Holdings from HSBC Bank Limited and Axis Bank Limited respectively. The aforesaid financial facilities were availed by MHR Holdings to refinance the existing loan amounting to â¬ 50.07 million availed from ICICI Bank Limited and for providing the financial assistance to the subsidiary companies. Consequent to the repayment of loan by MHR Holdings, the corporate guarantee amounting to â¬ 53.27 million provided by the Company to ICICI Bank Limited was released by the bank.

During the financial year 2020-21, your Company made a strategic investment amounting to '' 3.05 crore by acquiring 6.67% stake in Great Rocksport Private Limited (âRocksport"). In April 2022, your Company has agreed to subscribe to second tranche for an additional 4,88,321 Equity Shares of Rocksport in three installments for a total cash consideration of '' 12 crore. After completion of the second tranche investment, the Company''s shareholding in Rocksport will go up from 6.67% to 23.42%. Rocksport is engaged inter alia, in the business of undertaking and providing outdoor entertainment, adventure programs, educational adventure tours and retailing of branded adventure products in India. The investment in Rocksport will increase customer engagement avenues for the Company, whereby the Company and Rocksport can engage in multiple formats for its members within and outside resorts of the Company.

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

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

9. Corporate Social Responsibility

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

10. Sustainability

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

11. Business Responsibility Report

The Business Responsibility Report (âBRR") of your Company for the financial year 2021-22, as required under Regulation 34(2)(f) of the SEBI Listing Regulations, forms part of this Annual Report.

Your Company believes that the sustainable development aims at achieving economic growth and improvement in wellbeing while preserving the natural resources and ecosystem for future generations. Your Company also recognises the importance of sustainability and is committed to conserve the ecological integrity of its locations through responsible business practices.

12. Corporate Governance Report

13. Management Discussion and Analysis Report

14. Whistle Blower Policy & Vigil Mechanism

15. Employees'' Stock Options

Accordingly, your Company formulated the Employees'' Stock Option Schemes namely - ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2006'' (âMHRIL ESOS 2006"), ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2014'' (âMHRIL ESOS 2014") and ''Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2020'' ("MHRIL ESOS 2020") after obtaining requisite approvals from the Shareholders. All the balance shares available under MHRIL ESOS 2006 together with any other shares represented by Options that may lapse for any reason thereat, was/will be considered for issuing/ granting Options to the Employees pursuant to the provisions under MHRIL ESOS 2014.

During the year under review, as per the terms of the Company''s Employees'' Stock Option Schemes (MHRIL ESOS 2006, MHRIL ESOS 2014 and MHRIL ESOS 2020) and consequent to the allotment of Bonus Shares, the appropriate adjustments were made to all the stock options (vested, unvested and unexercised) and the exercise prices of the respective grants under the Employees'' Stock Option Schemes of the Company. Further, the Company has also obtained the in-principle approval from the Stock Exchanges for listing of additional shares to be issued under MHRIL ESOS 2014 and MHRIL ESOS 2020 based on the adjustment made pursuant to the allotment of Bonus Shares.

During the year under review, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 (as amended from time to time), a total of 1,19,761 Options were granted under MHRIL ESOS 2020 by the Nomination and Remuneration Committee to the eligible employees and noted by the Board.

Details required to be provided under Regulation 13 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (âSEBI SBEB and SE Regulations") are available on the Company''s website at: http://www. clubmahindra.com/about-us/investor-relations/financials.

16. Subsidiaries, Joint Venture and Associate companies

During the year under review, Suomen Vapaa-aikakiinteistot Oy LKV ("Suomen"), a step down subsidiary of the Company has been voluntarily liquidated and has ceased to be a subsidiary of HCR and in turn of the Company.

During the year under review, HCR has acquired 100% stake in Kiinteisto Oy Vierumaen Kaari (âVierumaen"). Further, as per agreement entered by HCR with Vierumaen Hotellikiinteisto Ky, both the parties have equal voting rights as well as right to

appoint equal number of members on the Board of Directors of Vierumaen. Accordingly, Vierumaen is considered as a Joint Venture company of HCR and in turn of the Company.

During the year under review, HCR has approved the merger of its 12 wholly owned subsidiaries in Finland with it. Consequently, Kiinteisto Oy Rauhan Ranta 1, Kiinteisto Oy Rauhan Ranta 2, Kiinteisto Oy Kylpylantorni 1, Kiinteisto Oy Spa Lofts 2, Kiinteisto Oy Spa Lofts 3, Kiinteisto Oy Tiurunniemi, Kiinteisto Oy Vanha Ykkostii, Kiinteisto Oy Katinnurkka, Kiinteisto Oy Tenetinlahti, Kiinteisto Oy Himos Gardens, Kiinteisto Oy Kuusamon Pulkkajarvi 1 and Kiinteisto Oy Mallosniemi, wholly owned subsidiaries of HCR have been merged with HCR with effect from April 1, 2022 and consequently, the above-mentioned companies have ceased to be the subsidiaries of HCR and in turn of the Company with effect from April 1, 2022.

Kiinteisto Oy Rauhan Liikekiinteistot 1 (âKiinteisto"), incorporated in Finland, has been merged with Supermarket Capri Oy (âSupermarket"), with effect from April 8, 2022. Kiinteisto and Supermarket are wholly owned subsidiaries of HCR and in turn of the Company. Consequent to the merger, Kiinteisto has ceased to be a subsidiary of HCR and in turn of the Company with effect from April 8, 2022. Further, the name of Supermarket has been changed to Kiinteisto Oy Rauhan Liikekiinteistot 1 with effect from April 8, 2022.

Arabian Dreams Hotel Apartments LLC, Dubai (âArabian Dreams"), a Joint Venture company of the Company, has been considered as a subsidiary company in accordance with the provisions of Ind AS (effective from the financial year 2016-17). As of March 31, 2022, your Company had 33 subsidiaries (including 27 indirect subsidiaries), 2 joint venture companies (indirect) and 1 associate company (indirect).

After considering the cessation of subsidiaries at Finland, as on the date of this report, your Company has 20 subsidiaries (including 14 indirect subsidiaries), 2 joint venture companies (indirect) and 1 associate company (indirect).

17. Performance of Subsidiaries

Domestic Subsidiaries

Gables Promoters Private Limited (âGables"), is a wholly owned subsidiary of the Company. Gables operates a resort property of 115 rooms at Naldehra, Himachal Pradesh. Your Company avails rooms in the resort property of Gables for usage of its guests and vacation ownership members. During the year under review, Gables has entered into a Public-Private Partnership (PPP) contract with Himachal Pradesh Government to renovate and operate a resort in Janjehli (Mandi District).

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

Foreign Subsidiaries

MH Boutique Hospitality Limited, Thailand (âMH Boutique"), in which your Company holds forty-nine per cent of equity stake, is a subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand (âInfinity").

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

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

Covington is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of your Company. The principal activity of Covington is to hold investments. Currently, it holds investments in HCR and HCR Management Oy (âHCRM"), Finland. As on March 31, 2022, Covington holds 100% stake in HCR and HCRM.

HCR, subsidiary of Covington and in turn of the Company, is the largest operator of leisure hotels in Finland and the largest vacation ownership company in Europe. As of March 31, 2022, HCR has 33 resorts of which 25 are located in Finland, 2 in Sweden and 6 in Spain. During the year under review, total income of HCR stood at â¬ 122.07 million, compared to â¬ 99.46 million in 2020-21. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the year were (â¬ 0.32) million, compared to (â¬ 8.88) million in 2020-21. Overall, HCR recorded a PBT and PAT of (â¬ 5.88) million and (â¬ 5.31) million respectively in 2021-22. HCR''s turnover was significantly impacted by the prolonged Covid-19 pandemic. The situation was most challenging in Spa Hotel business and related services. On the other hand, renting of holiday apartments remained on strong level and sales of timeshare weeks and fractionals remained at reasonable levels considering the circumstances. HCR has taken several actions to improve its efficiency and adapt the cost base to the changing market conditions. Variable costs were effectively adapted to improve operational efficiency, but high fixed costs especially in the Spa Hotel business put significant pressure on profitability.

HCRM is a wholly owned subsidiary of Covington and in turn subsidiary of your Company. HCRM is primarily engaged in the sale and trade of real estates, property management,

investment activities and dealing in securities. Currently, HCRM holds investment in the share capital of HCR.

Arabian Dreams, (a Joint Venture company as per the Act and Subsidiary company as per Ind AS) operates a 75-room hotel property in Dubai (UAE) taken on lease basis. Your Company avails rooms/apartments in the hotel property of Arabian Dreams for usage of its guests and vacation ownership members.

Associate Company

Kiinteisto Oy Seniori-Saimaa is an associate of HCR and consequently, associate of your Company.

Joint Venture companies

Tropiikin Rantasauna Oy and Kiinteisto Oy Vierumaen Kaari are Joint Venture companies (JV) of HCR and consequently, JV of your Company.

The policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website at: https://www.clubmahindra.com/corporate-governance/ investor-information.

18. Directors

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

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on January 25, 2021 had appointed Mr. Ruzbeh Irani as an Additional Director in the category of Non-Executive Non-Independent Director of the Company w.e.f. January 26, 2021, liable to retire by rotation. The Shareholders of the Company at their 25^th AGM held on September 1, 2021 have approved the appointment of Mr. Ruzbeh Irani as a Non-Executive Non-Independent Director of the Company.

Further, Shareholders of the Company at their 25^th AGM held on September 1, 2021, have approved the appointment of Mr. Diwakar Gupta as an Independent Director of the Company, not liable to retire by rotation, for a period of 5 (five) consecutive years with effect from December 1, 2020 to November 30, 2025.

The Shareholders at the 23^rd AGM held on July 31, 2019 had re-appointed Mr. Sridar Iyengar as an Independent Director of the Company for a second term commencing from August 27, 2019 to July 31, 2022. Accordingly, Mr. Sridar Iyengar will cease to hold office as an Independent Director of the Company from August 1, 2022 upon completion of his tenure as approved by the Shareholders.

In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Dr. Anish Shah is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Notice convening the forthcoming AGM will include the proposal for the re-appointment of Dr. Anish Shah. A brief resume of Dr. Anish Shah seeking re-appointment at the forthcoming AGM and other details as required to be disclosed in terms of Regulation 36(3) of the SEBI Listing Regulations and Secretarial Standard on General Meetings (SS-2) forms part of the Corporate Governance Report and will also be annexed to the Notice of AGM.

19. Key Managerial Personnel (KMPs)

As informed in the previous Annual Report, Mrs. Akhila Balachandar had resigned as the Chief Financial Officer of the Company with effect from May 31, 2021 and based on the recommendation of the Audit Committee and Nomination and Remuneration Committee, the Board of Directors at its meeting held on May 25, 2021 had approved the appointment of Mr. Sujit Vaidya as the Chief Financial Officer of the Company and designated him as the KMP of the Company with effect from June 1, 2021.

As on March 31, 2022, Mr. Kavinder Singh, Managing Director & CEO, Mr. Sujit Vaidya, Chief Financial Officer and Mr. Dhanraj Mulki, General Counsel & Company Secretary, are the KMPs as per the provisions of the Act.

20. Policy on Directors'' Appointment and Remuneration

The salient features of the following policies of the Company are attached herewith and marked as Annexure IV:

1. Policy on Appointment of Directors and Senior Management

2. Policy on Remuneration of Directors and

3. Policy on Remuneration of Key Managerial Personnel and Employees

The aforesaid policies are also available at the link https:// www.clubmahindra.com/corporate-governance/investor-information.

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

21. Board Evaluation

22. Number of Board Meetings

During the year under review, the Board of Directors met 8 (eight) times. The details of the Board Meetings and attendance of Directors are provided in the Corporate Governance Report, which forms a part of this Annual Report.

23. Composition of Audit Committee

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

24. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2022, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year ended on that date;

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

25. Internal Financial Controls and their Adequacy

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

26. Consolidated Financial Statements

For the purpose of preparation of the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2022 as per Ind AS, the latest audited financial results of all the subsidiaries, one associate company and two joint venture companies pertaining to HCR were considered and consolidation was done as per the provisions of Section 129 of the Act.

27. Risk Management

Your Company has a well-defined risk management framework to identify and evaluate elements of business risk. The Board of Directors have constituted the Risk Management Committee pursuant to the provisions of Regulation 21 of the SEBI Listing Regulations and its prime responsibility is to

oversee the implementation of the risk management policy of the Company. The Audit Committee has an oversight in the area of financial risk and controls. Other details including details pertaining to various risks faced by your Company and also development and implementation of risk management framework are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.

28. Disclosure requirements

> Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, details of transactions with persons or entities belonging to the promoter/ promoter group which holds 10% or more shareholding in the Company, are furnished under Note No. 50 to the Standalone Financial Statements which sets out related party disclosure.

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

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

> During the year under review, no revision was made in the previous financial statements of the Company.

> During the year under review, the Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016.

> The Company has no borrowings as on March 31, 2022 and hence, the requirement of providing details of difference between amout of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks / financials institutions along with the reasons thereof is not applicable to the Company.

29. Auditors

A) Statutory Auditors

The Shareholders at their 21^st AGM held on August 2, 2017, approved the appointment of B S R & Co. LLP, Chartered Accountants, Mumbai (ICAI membership No:101248W/W-100022) as the Statutory Auditors of the Company for a period of 5 (five) years commencing from the conclusion of the 21^st AGM till the conclusion of 26^th AGM, subject to ratification of their appointment by the Members at every AGM of the Company. Further, the Shareholders at their 22^nd AGM held on August 2, 2018 approved the ratification of the appointment of B S R & Co. LLP, Chartered Accountants as

the Statutory Auditors of the Company, from the conclusion of the 22^nd AGM to hold office until the conclusion of the 26^thAGM of the Company to be held in this year 2022.

The Auditors'' Report on the financial statements of the Company for the year ending March 31, 2022 is unmodified i.e. it does not contain any qualification, reservation or adverse remark. The Auditors'' Report is enclosed with the financial statements forming part of the annual report.

Subject to the approval of the Shareholders, the Board of Directors of the Company, based on the recommendations received from Audit Committee, has recommended the re-appointment of B S R & Co. LLP as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years commencing from the conclusion of the forthcoming AGM till the conclusion of 31^st AGM of the Company to be held in the year 2027. The Notice convening the forthcoming AGM will include the proposal for the re-appointment of Statutory Auditors of the Company for a second term of 5 (five) consecutive years.

B) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed M Siroya and Company, Practicing Company Secretaries, to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure V.

There are no qualifications, reservations or adverse remarks made by M Siroya and Company, Practicing Company Secretaries, Secretarial Auditor of the Company in the Secretarial Audit Report.

30. Deposits

Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date.

31. Credit Rating

India Ratings and Research Private Limited (âIndia Ratings") has re-affirmed Long-Term Issuer Rating at ''IND A '' with a stable outlook to your Company. The ''IND A '' rating indicates adequate degree of safety regarding timely servicing of financial obligations.

32. Material Changes and Commitment affecting Financial Position of the Company

33. Annual Return

As per the provisions of the Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return as of March 31, 2022 has been placed on the website of the Company and can be accessed at https://www.clubmahindra.com/corporate-governance/ financials

34. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. Some of these initiatives are discussed in the section on Sustainability in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

35. Human Resources

Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, this year your Company has also focused on employee engagement initiatives aimed at increasing the culture of innovation and collaboration across all strata of the workforce. During the year under review, your Company has set out on the journey of transformation by blending technology in every step of the employees'' engagement. Your Company has also been certified as one of India''s Great Places to Work For and recognised amongst the Top 50 ''Best companies to work for in India'' by Great Place To Work (GPTW) Institute. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

Act, 2013 (âPOSH Act"). The Company has also complied with provisions relating to the constitution of Internal Complaints Committee under the POSH Act and the Committee includes external members from NGO and / or members with relevant experience. There were no complaints pending at the beginning of the year. During the year under review, the Company has not received any complaint under the Policy.

36. Particulars of Employees

The Company had 9 (Nine) employees who were employed throughout the year and were in receipt of remuneration of more than '' 102 lakhs per annum. There were 5 (Five) employees employed for part of the year by the Company who were in receipt of remuneration of more than '' 8.50 lakhs per month.

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

37. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company''s Customers, Shareholders, Suppliers, Bankers, Financial Institutions and the Central and State Governments for their unstinted support. The Directors would like to place on record their appreciation to employees at all levels for their hard work, dedication, commitment and valuable performance during the challenging times.

For and on behalf of the Board Arun Nanda

Place: Mumbai Chairman

Date: May 2, 2022 DIN: 00010029

Mar 31, 2018

Dear Shareholders,

The Directors are pleased to present their Twenty Second Report together with the Audited Financial Statements of your Company for the year ended March 31, 2018.

1. Operations and Financial Overview

During the Financial Year 2017-18, your Company has registered a steady performance in spite of a continued subdued consumer sentiment, especially towards high-value discretionary spend categories. Your Company added 18,225 new members to its vacation ownership business, taking the total membership to over 2.35 lakh at the end of the year. The growth in the member addition is a result of concerted efforts in tapping high quality leads, better lead management and conversion. The Company also continued to do advertising and brand building campaigns during the year under review. Your Company added 320 new room units during the year under review, taking the total inventory to 3,472 units as of March 31, 2018.

During the year under review, your Company has increased its stake in Holiday Club Resorts Oy, Finland (HCR) from 91.94% to 95.16% on account of acquisition of additional shares in line with the agreements executed with the shareholders of HCR.

Your Companyâs total income (including other income) remained stable at Rs.1,09,419 lakh in 2017-18 compared to Rs.1,09,039 lakh in 2016-17. Profit After Tax (PAT) grew to Rs.13,436 lakh in 2017-18 from Rs.13,065 lakh in 2016-17. Diluted earnings per share (EPS) for 2017-18 stood at Rs.10.10 up from Rs.9.85 in 2016-17.

Your Companyâs consolidated total income (including other income) grew to Rs.2,35,058 lakh in 2017-18 from Rs.2,29,444 lakh in 2016-17. The consolidated PAT stood at Rs.13,237 lakh in 2017-18 and the Diluted EPS for 2017-18 stood at Rs.9.95.

There are no audit qualifications in the Standalone or Consolidated Financial Statements by the Statutory Auditors for the year under review.

2. Financial Highlights â Standalone

(Rs. in lakh)

Â	2018	2017
Income:	Â	Â
Income from sale of Vacation Ownership and other services	1,06,419	1,07,318
Other Income	3,000	1,721
Total Income	1,09,419	1,09,039
Expenditure:	Â	Â
Less: Employee Cost & other expenses	83,219	82,889
Profit before Depreciation, Interest and Taxation	26,200	26,150
Less: Depreciation	5,480	6,053
Interest	5	2
Profit for the year before Tax	20,715	20,095
Less: Provision for Tax - Current Tax	6,559	7,535
- Deferred tax (net)	720	(505)
Net Profit for the year after tax	13,436	13,065
Other Comprehensive Income (Net of Tax)	(72)	(3)
Total Comprehensive Income	13,364	13,062

3. Share Capital

Authorised Share Capital

During the year under review, the Authorised Share capital of the Company was increased from Rs.100,00,00,000 (Rupees One Hundred Crore only) divided into 10,00,00,000 (Ten Crore) Equity Shares of Rs.10 each (Rupees Ten only) to Rs.150,00,00,000 (Rupees One Hundred and Fifty Crore only) divided into 15,00,00,000 (Fifteen Crore) Equity Shares of Rs.10 each (Rupees Ten Only).

Paid up Share Capital

During the year under review and as mentioned in the previous yearâs Directorsâ Report, the Board of Directors of the Company had recommended, subject to the approval of the shareholders, issue of Bonus Shares in proportion of 1:2 i.e. 1 (one) bonus equity share of Rs.10 each for every 2 (Two) fully paid-up equity shares of Rs.10 each held, and consequently the same was approved by the Shareholders vide resolution passed through Postal Ballot on June 30, 2017. Accordingly, the Securities Allotment Committee of the Board of Directors of the Company on July 12, 2017, allotted 4,44,17,928 Bonus Equity Shares to the Shareholders of the Company holding shares as on July 11, 2017 (Record Date).

During the year under review, the Company has also allotted 2,45,000 equity shares of Rs.10 each to the eligible employees/ directors pursuant to exercise of stock options granted under the Companyâs Employee Stock Option Scheme - 2014.

Consequent to the aforesaid allotments, the Issued, Subscribed and Paid up Share Capital of the Company as on March 31, 2018 was Rs.133,44,37,840 (Rupees One Hundred Thirty Three Crore Forty Four Lakh Thirty Seven Thousand Eight Hundred and Forty only) divided into 13,34,43,784 (Thirteen Crore Thirty Four Lakh Forty Three Thousand Seven Hundred and Eighty Four) equity shares of Rs.10 each (Rupees Ten only).

During the year under review, your Company did not issue shares with differential voting rights / sweat equity. Details of Directorsâ shareholding as on March 31, 2018, are mentioned in the Corporate Governance Report, which forms a part of this Annual Report.

4. Dividend

In compliance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ), the Dividend Distribution Policy of the Company is annexed herewith as Annexure I and is also available at the Companyâs website at: http://www.clubmahindra.com/sites/default/files/ uploaded%20documents/Dividend-Distribution-Policy.pdf.

In line with the financial performance for the year ended March 31, 2018 and Companyâs Dividend Distribution Policy, your Directors are pleased to recommend a dividend of Rs.4 (i.e. 40%) per equity share of face value of Rs.10 each for the financial year ended March 31, 2018. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the shareholders whose names appear in the Register of Members of the Company as on the Book Closure Date. The equity dividend outgo for 2017-18, inclusive of tax on distributed profits would absorb a sum of Rs.6,435 lakh (as compared to Rs.5,346 lakh in the previous financial year).

5. Transfer to Reserve

The Board of Directors proposes to transfer Rs.1,500 lakh to the General Reserve from the current yearâs distributable profits of the Company.

6. Related Party Transactions

Your Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review are on armâs length basis and in the ordinary course of business. Your Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions (âRPT Policyâ). Accordingly, AOC-2 is not applicable to the Company. Further, transactions entered by the Company with related parties in the normal course of business were placed before the Audit Committee of the Board.

The RPT Policy as approved by the Audit Committee and the Board is available on the website of the Company at: http:// www.clubmahindra.com/sites/default/files/Policy_on_RPT.pdf. Your Directors draw attention of the members to Note No. 46 to the Standalone Financial Statements which sets out related party disclosure.

7. Particulars of Loans and Advances, Guarantees or Investments

As your Company is engaged in the activity covered under Schedule VI of the Companies Act, 2013 (âActâ), the provisions of Section 186 of the Act related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans made, and guarantees given to / on behalf of subsidiary companies / JV company are provided in the Note Nos. 8, 9 and 17 to the Standalone Financial Statements. These loans and guarantees for which loans are provided are proposed to be utilised by the respective recipients for their business purposes.

During the year under review, your Company has provided Corporate Guarantee of Euro 4.75 million on behalf of its subsidiary, MHR Holdings (Mauritius) Limited, Mauritius (âMHR Holdingsâ), as a collateral security towards the financial facilities (funded / non-funded) availed by MHR Holdings from a Bank.

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

Particulars of investments made by your Company are provided in the Standalone Financial Statements at Note Nos 6 and 13.

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

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

9. Corporate Social Responsibility

Corporate Social Responsibility (âCSRâ) activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. These are discussed in detail in the Management Discussion and Analysis Report, which forms a part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this Report and is annexed herewith as Annexure III.

10. Sustainability

11. Business Responsibility Report

The Business Responsibility Report (âBRRâ) of your Company for the year 2017-18 forms part of this Annual Report, as required under Regulation 34(2)(f) of the SEBI Listing Regulations.

Your Company believes that the sustainable development aims at achieving economic growth and improvement in well-being while preserving the natural resources and ecosystem for future generations. Your Company also recognises the importance of sustainability and is committed to conserve the ecological integrity of its locations through responsible business practices.

12. Corporate Governance Report

13. Management Discussion and Analysis Report

A detailed analysis of the Companyâs operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Resort Operations, Member Relations, Business Excellence, Human Resources and Information Technology are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

14. Whistle Blower Policy & Vigil Mechanism

As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for Directors, employees and other stakeholders to report genuine concerns. The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Corporate Governance Report, which forms a part of this Annual Report.

15. Employeesâ Stock Options

Employeesâ Stock Options represent a reward system based on overall performance of the individual employee and the Company. It helps companies to attract, retain and motivate the best available talent. This also provides an opportunity to employees to participate in the growth of the Company and also encourages employees to align individual performances with the Company and promotes increased participation by the employees in the growth of the Company. Accordingly, your Company formulated the Employeesâ Stock Option Scheme in 2006 (2006 Scheme) and subsequently in 2014 (2014 Scheme) after obtaining requisite approvals from the shareholders. All the balance shares available under 2006 Scheme together with any other shares represented by Options that may lapse for any reason thereat, was/will be considered for issuing/ granting Options to the Employees pursuant to the provisions under the 2014 Scheme.

During the year under review, as per the terms of the Companyâs Employeesâ Stock Option Schemes (2006 and 2014) and consequent to the allotment of Bonus Shares, the appropriate adjustments were made to all the stock options (vested, unvested and unexercised) and the exercise prices of the respective grants under the Employeesâ Stock Option Schemes (2006 and 2014) of the Company. Further, the Company has also obtained the in-principle approval from the Stock Exchanges for listing of additional shares to be issued under 2014 Scheme based on the adjustment made pursuant to the allotment of Bonus Shares.

During the year under review, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 (âSEBI ESOP Regulationsâ) a total of 60,000 new options were granted (Grant V) under 2014 Scheme by the Nomination and Remuneration Committee to the eligible employees and noted by the Board.

Details required to be provided under Regulation 14 of SEBI ESOP Regulations is available on the Companyâs website at: http://www.clubmahindra.com/about-us/investor-relations/financials

The details of Employeesâ Stock Options forms part of the Notes to accounts of the Financial Statements in this Annual Report.

A certificate from the Statutory Auditors of the Company confirming that the 2006 Scheme and 2014 Scheme have been implemented in accordance with the SEBI ESOP Regulations, and the resolution passed by the Shareholders, will be placed at the ensuing Annual General Meeting for inspection by members.

16. Subsidiaries, Joint Venture and Associate Companies

During the year under review, your Company has increased its equity investment in Gables Promoters Private Limited (Gables), a wholly owned subsidiary, by investing Rs.1,532 lakh in and subscribing to 1,53,21,400 Equity Shares of Rs.10 each of Gables. Accordingly, the total investment in the equity share capital of Gables has been increased to Rs.6,500 lakh.

Your Company through its subsidiary Covington S.a.r.l, Luxembourg, increased its equity stake in Holiday Club Resorts Oy, Finland from 91.94% to 95.16% in April 2017.

During the year under review, Holiday Club Sweden AB, step down subsidiary of the Company, acquired 100% stake in Are Villa 3 AB (earlier known as Visionsbolaget 12191 AB), accordingly Are Villa 3 AB has become a step-down subsidiary of the Company. Further, Are Villa 3 AB has acquired 100% stake in Are Villa 4 AB (earlier known as Visionsbolaget 12192 AB) and accordingly, Are Villa 4 AB has also become a step-down subsidiary of the Company. Further, Are Villa 3 AB has disinvested its entire stake in Are Villa 4 AB and consequently Are Villa 4 AB ceased to be step-down subsidiary of the Company.

Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams), Joint Venture company of the Company, is considered as subsidiary company from Financial Year 2016-17 in compliance with the provisions of Indian Accounting Standards (Ind AS). Accordingly, as of March 31, 2018, your Company has 36 subsidiaries (including 31 indirect subsidiaries), 1 Joint Venture company (indirect) and 3 associate companies (including 2 indirect associates).

17. Performance of Subsidiaries Domestic Subsidiaries

Gables Promoters Private Limited (Gables) is a wholly owned subsidiary company of the Company. During the year under review, Gables has completed its greenfield project of construction of resort property of 115 rooms at Naldehra, Himachal Pradesh and the resort property has become fully operational.

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

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd, Malaysia (Heritage Bird) is a wholly owned subsidiary company of the Company. Heritage Birdâs principal activities are holding of investments and leasing of properties. Heritage Bird has rooms/units in apartment properties in a well-known location in Kuala Lumpur, Malaysia.

MH Boutique Hospitality Limited, Thailand (MH Boutique), in which your Company holds forty nine per cent of equity stake, is a subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand.

Infinity Hospitality Group Company Limited, Thailand (Infinity) is the subsidiary company of MH Boutique and by virtue of the same is also subsidiary of the Company. Infinity owns and operates a hotel/apartment property at Bangkok, Thailand. Your Company avails rooms in the hotel property of Infinity for usage of its guests and vacation ownership members.

MHR Holdings (Mauritius) Limited, Mauritius (MHR Holdings), is a wholly owned subsidiary company of the Company. The principal activity of MHR Holdings is to hold investments. Currently, it holds investments in Covington S.a.r.l, Luxembourg.

Covington S.a.r.l, Luxembourg (Covington) is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of your Company. The principal activity of Covington is to hold investments. Currently, it holds investments in Holiday Club Resorts Oy (HCR) and HCR Management Oy (HCRM), Finland. As on March 31, 2018, Covington holds 95.16% stake in HCR and 100% stake in HCRM.

HCR Management Oy, Finland (HCRM) is a wholly owned subsidiary of Covington and in turn subsidiary of your Company. HCRM is primarily engaged in the sale and trade of real estates, property management, investment activities and dealing in securities. Currently, HCRM holds investment in HCR.

Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams), (Joint Venture company as per the Act and subsidiary company as per Ind AS) operates 75 room hotel property in Dubai (UAE) taken on lease basis. Your Company avails rooms/ apartments in the hotel property of Arabian Dreams for usage of its guests and vacation ownership members.

Associate Companies

Guestline Hospitality Management & Development Services Limited (Guestline) is an associate company of your Company pursuant to the provisions of the Act, as the Company is holding more than 20 per cent of total share capital which includes preference share capital. Guestline did not have any operations during the year under review.

Kiinteisto Oy Seniori-Saimaa and Kiinteisto Oy Sallan Kylpyla are associate companies of HCR and consequently associates of your Company.

Joint Venture Company

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

A report on the performance and financial position of each of the subsidiaries, associates and joint venture company as per the Act (in the prescribed format i.e. âForm AOC-1â) is provided as Annexure to the Consolidated Financial Statements and hence not repeated here for the sake of brevity.

The policy for determining material subsidiaries as approved by the Board may be accessed on the Companyâs website at:Â http://www.clubmahindra.com/sites/default/files/Policy_For_Determining_Material_Subsidiaries.pdf

In accordance with the third proviso to Section 136(1) of the Act, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements are available on the Companyâs website www.clubmahindra.com. Further, as per fourth proviso to the said Section, the Audited Annual Accounts of each of the said subsidiary companies of the Company are also available on the Companyâs website at www.clubmahindra.com. Any Shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Chief Financial Officer at the Companyâs Registered/ Corporate Office. Further, the said documents will be available for examination by the Shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon.

18. Directors

As on March 31, 2018, your Company had 9 Directors, which includes 5 Independent Directors (IDs), 3 Non-Executive Directors (NEDs) and 1 Executive Director (ED).

During the year under review, the Board of Directors at their meeting held on May 19, 2017 pursuant to the recommendation of the Nomination and Remuneration Committee approved the remuneration payable to Mr. Kavinder Singh (DIN 06994031) for the period of 2 (two) years i.e. from November 3, 2017 to November 2, 2019 (both days inclusive) and subsequently, the same was approved by the Shareholders at the Annual General Meeting of the Company held on August 2, 2017.

Mr. S Krishnan (DIN 00212875), who was appointed as an Executive Director of the Company with effect from January 22, 2015 for a period of three years by the Shareholders of the Company, had expressed his desire not to be re-appointed and hence, ceased to be an Executive Director of the Company upon completion of his tenure on January 21, 2018 and consequently, he also ceased to be a Director of the Company with effect from January 22, 2018. Mr. Krishnan joined the Company as Chief Financial Officer (CFO) with effect from April 1, 2014 and was further elevated as CFO & Executive Director of the Company with effect from January 22, 2015. Mr. Krishnan played an important role in strengthening the systems & processes and in the acquisition of Finland subsidiary, HCR. The Board placed on record its sincere appreciation for the contributions made by Mr. Krishnan during his association with the Company.

19. Retirement by Rotation

In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Mr. Vineet Nayyar (DIN 00018243), being longest in the office, is liable to retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. However, Mr. Vineet Nayyar has expressed his desire not to seek re-appointment. It is proposed not to fill up the vacancy thereby caused.

Mr. Vineet Nayyar was appointed as a Director on the Board of the Company with effect from January 23, 2007 and has made notable contributions towards the effective functioning of the Board of the Company. The Board placed on record its sincere appreciation for the contributions made by Mr. Vineet Nayyar during his association with the Company.

20. Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Act that he / she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations.

21. Key Managerial Personnel (KMPs)

Mrs. Akhila Balachandar was appointed as the Chief Financial Officer (CFO) of the Company and was designated as a KMP w.e.f. May 20, 2017 and consequently, Mr. S Krishnan was re-designated from âCFO & Executive Directorâ to âExecutive Directorâ of the Company with effect from the said date.

Further, as informed earlier, Mr. S Krishnan ceased to be an Executive Director and KMP of the Company upon completion of his tenure on January 21, 2018.

During the year under review, Mr. Dinesh Shetty ceased to be General Counsel & Company Secretary and KMP (including the Compliance Officer under the SEBI Listing Regulations) of the Company with effect from the closure of business hours of March 31, 2018. The Board placed on record its sincere appreciation for the contributions made by Mr. Dinesh Shetty during his association with the Company.

As on March 31, 2018, Mr. Kavinder Singh, Managing Director & CEO and Mrs. Akhila Balachandar, CFO, are the KMPs as per the provisions of the Act.

22. Board Evaluation

The Board has conducted an annual evaluation of the performance of all its Directors, Committees of the Board and that of its Non-Executive Chairman, in terms of the relevant provisions of the Act, Rules made thereunder and SEBI Listing Regulations. The manner in which the evaluation was conducted by the Company has been explained in the Corporate Governance Report, which forms a part of this Annual Report.

The Policy on appointment of Directors and Senior Management, Policy on Remuneration of Directors and Policy on Remuneration of Key Managerial Personnel and Employees are attached herewith and marked as Annexure IV, Annexure V-A and Annexure V-B respectively.

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

23. Number of Board Meetings

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

24. Composition of Audit Committee

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

25. Directorsâ Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018, and of the profit of the Company for the year ended on that date;

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

26. Internal Financial Controls and Their Adequacy

The Company has an adequate internal control system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency. Further details are provided in the Management Discussion and Analysis Report, which forms a part of this Annual Report. During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.

27. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with the Act and applicable Accounting Standards forms part of this Annual Report.

The Consolidated Financial Statements presented by the Company includes the Financial Results of its subsidiary companies, associates and joint venture company.

28. Risk Management

Your Company has a well-defined risk management framework to identify and evaluate elements of business risk. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

29. Disclosure requirements:

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

- Effective July 1, 2017 with initiation of the Goods and Service Tax (GST) regime, India introduced the landmark tax reform. Your Company made a timely and seamless transition to the new GST system.

30. Auditors

A) Statutory Auditors

The Shareholders at their 21^st Annual General Meeting (âAGMâ) held on August 2, 2017, approved the appointment of M/s B S R & Co. LLP, Mumbai (ICAI membership No:101248W/W-100022) as the Statutory Auditors of the Company for a period of 5 (five) years commencing from the conclusion of the 21^st AGM till the conclusion of 26^th AGM, subject to ratification of their appointment by the Members at every AGM of the Company.

As required under the provisions of Section 139 of the Act, your Company has obtained a written consent from the above Auditors, whose appointment is proposed to be ratified, to the effect that they are eligible to continue as Statutory Auditor of the Company.

The Shareholders are requested to ratify the appointment of Auditors at the forthcoming AGM and fix their remuneration. Accordingly, the appointment of M/s B S R & Co. LLP is being placed before the Shareholders for ratification.

Pursuant to Notification issued by the Ministry of Corporate Affairs on May 7, 2018 amending Section 139 of the Act, the mandatory requirement for ratification of appointment of Auditors by the Shareholders at every AGM has been omitted. Accordingly, the yearly ratification of appointment of the Auditors would not be done at every intervening AGM held after the ensuing AGM i.e. 22^nd AGM as the requirement had been done away in the Act.

The Auditorsâ Report on the financial statements of the Company for the year ending March 31, 2018 is unmodified i.e. it does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements forming part of the annual report.

B) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed M Siroya and Company, Company Secretaries to undertake the secretarial audit of the Company. The Report of the Secretarial Auditors is annexed herewith as Annexure VI.

There are no qualifications, reservations or adverse remarks made by M Siroya and Company, Company Secretaries, Secretarial Auditors of the Company in their Secretarial Audit Report.

31. Deposits

The Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date.

32. Credit Rating

India Ratings and Research Private Limited (âIndia Ratingsâ) has re-affirmed Long-Term Issuer Rating of âIND Aâ with a stable outlook to your Company. The âIND Aâ rating indicates adequate degree of safety regarding timely servicing of financial obligations. India Ratings continues to take a consolidated view of the Company and its subsidiaries, including HCR, Finland, to arrive at the ratings.

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

34. Extract of Annual Return

An extract of the Annual Return as of March 31, 2018, pursuant to sub section (3) of Section 92 of the Act, in form MGT 9 is annexed herewith as Annexure VII.

35. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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

36. Human Resources

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, this year your Company has also focused on Employee Engagement Initiatives aimed at increasing the Culture of Innovation & Collaboration across all strata of the workforce. This year the Employee Engagement Scores as reflected through MCARES survey (an internal benchmarking exercise within the Mahindra Group) has been the highest ever for your Company. Your Company has also been certified as one of Indiaâs Great Places to Work For and recognised amongst the 100 best companies to work for by Great Place To Work (GPTW) Organization. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There was one complaint pending at the beginning of the year. During the year under review, the Company received four complaints under the Policy. While four complaints were disposed and appropriate actions were taken in all cases within the statutory timelines, one compliant was pending at the end of the year, which was also investigated and resolved prior to the date of this Report. Further, there were no complaints pending for more than 90 days during the year.

37. Particulars of Employees

The Company had 6 (six) employees who were employed throughout the year and were in receipt of remuneration more than Rs.102 lakh per annum and 1 (one) employee was employed for part of the year and was in receipt of remuneration of more than Rs.8.50 lakh per month.

In terms of Section 136 of the Act, the copy of the Financial Statements of the Company, including the Consolidated Financial Statements, the Auditorâs Report and relevant Annexures to the said Financial Statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Companyâs Registered Office during all working days except on Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Chief Financial Officer of the Company at its Registered/Corporate Office.

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

38. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Companyâs Customers, Shareholders, Suppliers, Bankers, Financial Institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

Arun Nanda

Mumbai Chairman

May 8, 2018 DIN: 00010029

Mar 31, 2017

Dear Shareholders,

The Directors are pleased to present their Twenty First Report together with the Audited Financial Statements of your Company for the year ended March 31, 2017.

1. Operations and Financial Overview

During 2016-17, your Company has registered an impressive performance in spite of a subdued consumer sentiments, especially towards high-value discretionary spend categories and weakened further in the immediate aftermath of currency demonetization. Your Company added 18,557 new members to its vacation ownership business, a growth of 15% over the last year, taking the total membership to 2.18 lakh at the end of the year. The growth in the member addition reflects the successful execution of its marketing strategy and brand building initiatives implemented during the year under review. During the year, your Company added 273 new room units, taking the total inventory to 3,152 units as of March 31, 2017.

Your Company, during the year, has increased its stake in Holiday Club Resorts Oy, Finland (HCR) from 85.61% to 91.94% on account of acquisition of additional shares in line with the agreements executed with the shareholders of HCR. Subsequently, during the month of April 2017, the stake was further increased to 95.16%.

During the year under review, your Company made a strategic investment by acquiring 12% stake in Nreach Online Services Private Limited (Nreach). Nreach is a leading tech-enabled marketplace which provides widest range of experiences and activities including travel & adventure, gourmet dining, health & wellness, art & learning and other interesting things to do in and around city or in travel destinations under its flagship brand name Xoxoday (earlier known as "Giftxoxo").

Your Company''s total income (including other income) grew from Rs, 96,394 lakh in 2015-16 to Rs, 1,10,593 lakh in 2016-17. Profit After Taxes (PAT) grew from Rs, 11,359 lakh in 2015-16 to Rs, 13,065 lakh in 2016-17. Diluted earnings per share (EPS) for 2016-17 stood at Rs, 14.75, up from Rs, 12.87 in the previous year.

Your Company''s consolidated total income (including other income) grew from Rs, 1,61,297 lakh in 2015-16 to Rs, 2,30,999 lakh in 2016-17. The consolidated PAT grew from Rs, 8,681 lakh in 2015-16 to Rs, 14,858 lakh in 2016-17 and the Diluted EPS for 2016-17 stood at Rs, 16.78 from Rs, 9.83 in the previous year.

There are no audit qualifications in the Standalone or Consolidated Financial Statements by the Statutory Auditors for the year under review.

2. Financial Highlights â Standalone

(Rs, Lakh)

	2017	2016
Income:
Income from sale of Vacation Ownership and other services	1,08,873	95,153
Other Income	1,720	1,241
Total Income	1,10,593	96,394
Expenditure:
Less: Employee Cost & other expenses	84,443	72,444
Profit before Depreciation, Interest and Taxation	26,150	23,950
Less: Depreciation	6,053	7,133
Interest	2	8
Profit for the year before Tax	20,095	16,809
Less: Provision for Tax - Current Tax	7,535	4,990
- Deferred tax (net)	(505)	460
Net Profit for the year after tax	13,065	11,359
Other Comprehensive Income (Net of Tax)	(3)	(10)
Total Comprehensive Income	13,062	11,349

3. Indian Accounting Standards (Ind AS)

The Ministry of Corporate Affairs ("MCA"), vide its notification dated February 16, 2015, notified the Indian Accounting Standards ("Ind AS") applicable to certain classes of companies. Ind AS has replaced the existing Indian Generally Accepted Accounting Policies ("GAAP") prescribed under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014. In compliance with the aforesaid notification, your Company has adopted Ind AS with effect from April 1, 2016 and the Financial Statements have been prepared in accordance with the principles laid down therein. Further, the corresponding figures for the period ending March 31, 2016 have also been presented in compliance with the provisions of Ind AS and accordingly, a reconciliation of equity and net profit/loss have been provided along with the Audited Financial Statements for the financial year ended March 31, 2017, which forms a part of this Annual Report.

4. Share Capital

The Paid up Equity Share Capital as on March 31, 2017 was Rs, 8,878 lakh. During the year under review, your Company did not issue shares with differential voting rights / sweat equity except fresh grants issued under the Company''s Employees'' Stock Option Scheme 2014 discussed later in this report. Details of Directors'' shareholding as on March 31, 2017, are mentioned in the Corporate Governance Report, which forms a part of this Annual Report.

During the year under review, Mahindra & Mahindra Limited (M&M), holding company of the Company has sold 66,58,565 Equity Shares in the open market representing 7.5% of the share capital of the Company and consequently, the shareholding of M&M in the Company has come down from 75% to 67.5% of the total share capital of the Company as of March 31, 2017. The Company continues to be a subsidiary company of M&M and accordingly, all subsidiary companies of the Company are consequently subsidiary companies of M&M.

Subsequent to the end of financial year 2016-17, the Board of Directors at their meeting held on May 19, 2017 has approved issue and allotment of 55,000 fully paid equity shares of '' 10/each pursuant to the exercise of Options granted under the Company''s Employees'' Stock Option Scheme 2014. Pursuant to this allotment, the issued and paid up share capital of the Company has increased from '' 8,878 lakh to '' 8,883 lakh.

5. Dividend

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the top 500 listed entities based on market capitalization are required to formulate Dividend Distribution Policy.

During the year under review, your Company, in compliance with the said provisions, has formulated and adopted the Dividend Distribution Policy of the Company and the same is annexed herewith as Annexure

I and is also available at the Company''s website at: http://www.clubmahindra.com/sites/default/files/ uploaded%20documents/Dividend-Distribution-Policy.pdf

In line with the financial performance for the year ended March 31, 2017 and Company''s Dividend Distribution Policy, your Directors are pleased to recommend a dividend of Rs, 5/per equity share of face value Rs, 10/- each for the financial year ended March 31, 2017. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the shareholders whose names appear in the Register of Members of the Company as on the Book Closure Date. The equity dividend outgo for 2016-17, exclusive of tax on distributed profits would absorb a sum of Rs, 4,442 lakh (as compared to Rs, 4,439 lakh in the previous financial year).

6. Transfer to Reserve

The Board of Directors proposes to transfer Rs, 1,500 lakh to the General Reserve from the current year''s distributable profits of the Company.

7. Bonus Issue

The Board of Directors at their meeting held on May 19, 2017 has approved issue of Bonus Shares, in the proportion of 1 (One) Bonus Equity Share of Rs, 10/- each for every 2 (Two) fully Paid-up Equity Shares held as on the Record Date, subject to approval by the Members of the Company. The Bonus Issue of Equity Shares would, inter alia, require appropriate adjustments with respect to all the stock options of the Company under its Employees'' Stock Option Schemes.

In view of the above, the Board of Directors have recommended for the approval of the Shareholders increase in Authorized Share Capital of the Company from Rs, 10,000 lakh (Rupees Ten Thousand lakh only) to Rs, 15,000 lakh (Rupees Fifteen Thousand lakh only) and consequent amendment to Clause V of the Memorandum of Association of the Company.

Accordingly, the Company is seeking approval of the Shareholders through Postal Ballot Notice dated May 19, 2017 for increase in the Authorized Share Capital and consequential alteration to the Memorandum of Association of the Company and issuance of Bonus Shares. The Postal Ballot Notice can be viewed on the Company''s website at: http://www.clubmahindra.com/sites/default/files/Postal-Ballot-Notice-dated-May192017.pdf

8. Related Party Transactions

Your Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review are on arm''s length basis and in the ordinary course of business. Your Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions ("RPT Policy"). Accordingly, AOC-2 is not applicable to the Company. Further, transactions entered by the Company with related parties in the normal course of business were placed before the Audit Committee of the Board.

The RPT Policy as approved by the Audit Committee and the Board is available on the website of the Company at: http://www.clubmahindra.com/sites/default/files/Policy on RPT.pdf.

Your Directors draw attention of the members to Note No. 51 to the Standalone Financial Statements which sets out related party disclosure.

9. Particulars of Loans and Advances, Guarantees or Investments

As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Act related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans made, and guarantees given to / on behalf of subsidiary companies / JV company are provided in the Standalone Financial Statements at Note Nos. 8, 9 and 17 to the Standalone Financial Statements. These loans and guarantees for which loans are provided are proposed to be utilized by the respective recipients for their business purposes.

During the year under review, your Company has provided corporate guarantee of Thai Baht 162 million on behalf of Infinity Hospitality Group Company Limited, Thailand (Infinity), subsidiary company of the Company, as a collateral security towards financial facility availed by Infinity from a bank.

Particulars of investments made by your Company are provided in the Standalone Financial Statements at Note Nos. 6 and 13.

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

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

11. Corporate Social Responsibility

Corporate Social Responsibility ("CSR") activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. These are discussed in detail in the Management Discussion and Analysis Report, which forms a part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this Report and is annexed herewith as Annexure III.

12. Sustainability

13. Business Responsibility Report

Regulation 34(2) of SEBI Listing Regulations, inter alia, provides that the Annual Report of the top 500 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall include a Business Responsibility Report ("BRR").

Your Company, being one of such top 500 listed entities, has included BRR, as part of the Annual Report, describing initiatives taken by the Company from an environmental, social and governance perspective.

As a green initiative, the BRR for the FY 2016-17 has been hosted on the website of the Company, which can be accessed at http://www.clubmahindra.com/about-us/investor-relations/ financials.

Any Member interested in obtaining a copy of BRR may write to the Company Secretary.

14. Corporate Governance Report

15. Management Discussion and Analysis Report

A detailed analysis of the Company''s operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Resort Operations, Member Relations, Quality and Information Technology are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

16. Whistle Blower Policy & Vigil Mechanism

17. Employees'' Stock Options

Employees'' Stock Options represent a reward system based on overall performance of the individual employee and the Company. It helps companies attract, retain and motivate the best available talent. This also provides an opportunity to employees to participate in the growth of the Company and also encourages employees to align individual performances with the Company and promotes increased participation by the employees in the growth of the Company. Accordingly, the Company formulated the Employees'' Stock Option Scheme in 2006 (2006 Scheme) and subsequently in 2014 (2014 Scheme) after obtaining requisite approvals from the Shareholders. All the balance shares available under 2006 Scheme together with any other shares represented by Options that may lapse for any reason thereat, was/will be considered for issuing/ granting Options to the Employees pursuant to the provisions under 2014 Scheme.

During the year under review, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI ESOP Regulations"), a total of 80,000 new options were granted (Grant IV) under the 2014 Scheme by the Nomination and Remuneration Committee to the eligible employees and noted by the Board.

Details required to be provided under Regulation 14 of SEBI ESOP Regulations is available on the Company''s website at: http://www.clubmahindra.com/about-us/investor-relations/ financials.

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

18. Subsidiaries, Joint Venture and Associate Companies

During the year under review, Holiday Club Resorts Oy, Finland (HCR), step-down subsidiary of the Company, had entered into a Joint Venture (JV) Agreement with City of Kuusamo (JV partner) for establishment of Tropiikin Rantasauna Oy (Tropiikin). Consequently Tropiikin became Joint Venture company of HCR with effect from August 31, 2016.

Further, Are Semesterby A AB, Are Semesterby B AB, Are Semesterby C AB, Are Semesterby D AB, Caribia Service Oy, Kiinteisto Oy Tunturinrivi and Saimaa Gardens Arena Oy, ceased to be subsidiaries of your Company and Saimaa Adventures Oy, ceased to be Associate company of your Company during the year under review.

As of March 31, 2017 your Company has 35 subsidiaries (including 29 indirect subsidiaries), 1 Joint Venture company and 3 associate companies (including 2 indirect associates).

19. Performance of Subsidiaries Domestic Subsidiaries

Gables Promoters Private Limited (GPPL), is a wholly owned subsidiary company of the Company and is yet to commence its operations. GPPL is currently developing a resort property of 116 rooms at Naldhera, Himachal Pradesh which is expected to open shortly.

Mahindra Hotels and Residences India Limited is a wholly owned subsidiary company of the Company and did not have any operations during the year under review.

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd, Malaysia (Heritage Bird) is a wholly owned subsidiary company of the Company. Heritage Bird''s principal activities are holding of investments and leasing of properties. Heritage Bird has rooms/units in apartment properties in a well-known location in Kuala Lumpur, Malaysia.

Covington S.a.r.l, Luxemburg (Covington) is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of your Company. The principal activity of Covington is to hold investments. Currently, it holds investments in Holiday Club Resorts Oy (HCR), Finland. In January 2017, Covington has increased its stake in HCR by acquiring additional 6.33% stake in the share capital of HCR and consequently, its stake in HCR has increased from 85.61% to 91.94%. Further, in April 2017, Covington has acquired 3.22% stake in the share capital of HCR and consequently, its stake in HCR has been further increased to 95.16%.

HCR, subsidiary of Covington in turn of the Company, is the leading vacation ownership company in Europe and a significant operator in the fields of holiday housing and tourism. As of March 31, 2017, HCR has 32 resorts of which 24 are located in Finland, 2 in Sweden and 6 in Spain. Further, out of these, 7 resorts in Finland and 1 resort in Sweden have a spa hotel attached. HCR operates 1,059 hotel rooms and 2,172 holiday homes (Time share units and villa units).

HCR Management Oy, Finland (HCRM) is a wholly owned subsidiary of Covington in turn subsidiary of your Company. HCRM is primarily engaged in the sale and trade of real estates, property management, investment activities and dealing in securities. Currently, HCRM hold investment in the share capital of HCR

Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams) subsidiary of the Company operates 75 room hotel property in Dubai (UAE) taken on lease basis. Your Company avails rooms/apartments in the hotel property of Arabian Dreams for usage of its guests and vacation ownership members. Arabian Dreams, Joint Venture company of the Company, is considered as subsidiary company from FY 2016-17 in compliance with the provisions of Ind AS.

Associate Companies

Kiinteisto Oy Seniori-Saimaa and Kiinteisto Oy Sallan Kylpyla, associate companies of HCR and consequently associates of your Company.

Joint Venture company

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

A report on the performance and financial position of each of the subsidiaries, associates and joint venture company as per the Act (in the prescribed format i.e. "Form AOC-1") is provided as Annexure to the Consolidated Financial Statements and hence not repeated here for the sake of brevity.

The policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website at: http://www.clubmahindra.com/sites/default/files/Policy For Determining Material Subsidiaries.pdf.

In accordance with the third proviso to Section 136(1) of the Act, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements are available on the Company''s website www.clubmahindra.com. Further, as per fourth proviso to the said Section, the Audited Annual Accounts of each of the said subsidiary companies of the Company are also available on the Company''s website www.clubmahindra.com. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Company''s Registered Office. Further, the said documents will be available for examination by the shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon.

20. Directors

As on March 31, 2017, your Company had 10 Directors, which includes 5 Independent Directors (IDs), 3 Non-Executive Directors (NEDs) and 2 Executive Directors (EDs).

Mr. Kavinder Singh (DIN 06994031) was appointed as Managing Director & CEO for a period of 5 (five) years with effect from November 3, 2014 to November 2, 2019 (both days inclusive) and remuneration payable to Mr. Kavinder Singh was approved by the Members for a period of 3 (three) years with effect from November 3, 2014 to November 2, 2017 (both days inclusive) in accordance with the provisions of Schedule V of the Act.

The Board of Directors at their meeting held on May 19, 2017 pursuant to the recommendation of the Nomination and Remuneration Committee approved the remuneration payable to Mr. Kavinder Singh for the balance period of 2 (two) years of the tenure of his appointment i.e. with effect from November 3, 2017 to November 2, 2019 (both days inclusive), subject to the approval of the Members to be obtained at the ensuing Annual General Meeting of the Company.

21. Retirement by Rotation

In terms of the Articles of Association of the Company and as per Section 152(6) of the Act, Mr. V S Parthasarathy (DIN 00125299), being longest in the office, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

22. Declaration by Independent Directors

23. Key Managerial Personnel (KMPs)

The Board of Directors at their meeting held on May 19, 2017, on the recommendation of Audit Committee and Nomination and Remuneration Committee, approved the appointment of Mrs. Akhila Balachandar as the Chief Financial Officer of the Company and designated her as a KMP of the Company with effect from May 20, 2017. Further, consequent to this, the Board of Directors re-designated Mr. S Krishnan as "Executive Director" of the Company with effect from May 20, 2017.

Mr. Kavinder Singh, Managing Director & CEO, Mr. S Krishnan, CFO & Executive Director and Mr. Dinesh Shetty, General Counsel & Company Secretary, are the other KMPs as per the provisions of the Act. None of the KMPs resigned during the year.

24. Board Evaluation

The Board has conducted an annual evaluation of the performance of all its Directors, Committees of the Board and that of its Non-Executive Chairman, in terms of the relevant provisions of the Act, Rules made there under and SEBI Listing Regulations. The manner in which the evaluation was conducted by the Company has been explained in the Corporate Governance Report, which forms a part of this Annual Report.

The Managing Director & CEO and CFO & Executive Director do not receive remuneration or commission from any of its subsidiaries and draw remuneration only from the Company.

25. Number of Board Meetings

During the year under review, the Board of Directors met 5 (five) (5) times. The details of the Board Meetings and attendance of Directors are provided in the Report on Corporate Governance, which forms a part of this Annual Report.

26. Composition of Audit Committee

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

27. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made 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 as at March 31, 2017 and of the profit of the Company for the year ended on that date;

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

28. Internal Financial Controls and Their Adequacy

Your Company has an adequate internal control system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency. Further details are provided in the Management Discussion and Analysis Report, which forms a part of this Annual Report. During the year under review, the Statutory Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.

29. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries prepared in accordance with the Act and applicable Accounting Standards forms part of this Annual Report.

The Consolidated Financial Statements presented by the Company includes the Financial Results of its subsidiary companies, associates and joint venture company.

30. Risk Management

Your Company has a well-defined risk management framework to identify and evaluate elements of business risks. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

31. Auditors

A) Statutory Auditors

Under Section 139 of the Act and Rules made there under, it is mandatory to rotate the Statutory Auditors on completion of the maximum term permitted under the said Section subject to the transitional period prescribed therein.

M/s Deloitte Haskins & Sells, Chartered Accountants, Chennai (ICAI Firm Registration Number 00807S) have been Auditors of the Company from the conclusion of the 12^th Annual General Meeting (âAGM") and accordingly, they had completed the tenure of 10 years (after considering terms of the prior Audit firm) under the provisions of the Act and Rules made hereunder. Further, the incumbent Auditors, M/s Deloitte Haskins & Sells, will be completing the maximum number of transition period (3 years) as Auditors on the conclusion of the forthcoming AGM.

The Board placed on record their appreciation for the professional services rendered by M/s Deloitte Hakins & Sells during their association with the Company as its Auditors.

Subject to the approval of the Members, the Board of Directors of the Company, based on the recommendations received from Audit Committee of the Board of Directors, has recommended the appointment of M/s. B S R & Co., LLP, Mumbai (ICAI membership No:101248W/W-100022) as Statutory Auditors of the Company for a period of 5 (five) years commencing from the conclusion of the 21^st AGM till the conclusion of 26^th AGM, subject to ratification of their appointment by the Members at every AGM of the Company. M/s. B S R & Co., LLP, Mumbai have consented to the said appointment, and confirmed that their appointment if made, would be within the limits mentioned under Section 143 of the Act and Rules thereon. Members'' attention is drawn to a Resolution proposing the appointment of M/s. B S R & Co., LLP, Mumbai as Statutory Auditors of the Company which is included at Item No. 4 of the Notice convening the Annual General Meeting.

B) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and Rules hereunder, the Company has appointed M Siroya and Company, Practicing Company Secretaries to undertake the secretarial audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure VI.

There are no qualifications, reservations or adverse remarks made by M Siroya and Company, Practicing Company Secretaries, Secretarial Auditor of the Company in their secretarial audit report.

32. Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividend and the application money received by Company for allotment of any securities & due for refund are required to be transferred by the companies to IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Shareholders for seven consecutive years or more shall be transferred to the demat account created by the IEPF Authority. Accordingly, during the year under review, the Company has transferred the application money received by Company under Initial Public Offer for allotment of Equity Shares of the Company and were due for refund to IEPF. Further, the unclaimed or unpaid dividend for consecutive seven years and corresponding shares will be transferred as per the requirements of IEPF rules, details of which are provided at the Company''s website at: http://www.clubmahindra.com/ about-us/investor-relations/financials.

33. Deposits

Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date.

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

35. Extract of Annual Return

An extract of the Annual Return as of March 31, 2017 pursuant to the sub section (3) of Section 92 of the Act, in form MGT 9 is annexed herewith as Annexure VII.

36. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

37. Human Resources

Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, this year your Company has also focused on Employee Engagement Initiatives and drives aimed at increasing the Culture of Innovation & Collaboration across all strata of the workforce. This year the Employee Engagement Scores as reflected through MCARES survey has been the highest ever for your Company. Your Company has also been certified as one of India''s Great Places to Work For by Great Place To Work (GPTW) Organization which also is testimony to the great work it has done and is continuously doing for its people. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There was one complaint pending at the beginning of the year. During the year under review, the Company received three complaints under the Policy. While three complaints were disposed and appropriate actions were taken in all cases within the statutory timelines, one compliant was pending at the end of the year, which was also investigated and resolved prior to the date of this Report. Further, there were no complaints pending for more than 90 days during the year.

38. Particulars of Employees

Disclosures with respect to the remuneration of Directors, KMPs and employees under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the Rules"), is given in Annexure IX to this report.

The Company had 4 (four) employees who were employed throughout the year and were in receipt of remuneration more than Rs, 102 lakh per annum and 2 (two) employees were employed for part of the year and were in receipt of remuneration of more than Rs, 8.50 lakh per month.

In terms of Section 136 of the Act, the copy of the Financial Statements of the Company, including the Consolidated Financial Statements, the Auditor''s Report and relevant Annexure to the said Financial Statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Company''s Registered Office during all working days except on Saturday, Sunday, Public Holidays and National Holidays, between 10.00 AM to 12.00 Noon up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Company at its Registered Office.

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

39. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company''s Customers, Shareholders, Suppliers, Bankers, Financial Institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

Arun Nanda

Mumbai Chairman

May 19, 2017 DIN: 00010029

Mar 31, 2016

Dear Shareholders,

The Directors are pleased to present their Twentieth Report together with the audited financial statements of your Company for the year ended March 31, 2016.

1. Operations and Financial Overview

During 2015-16, your Company performed creditably in spite of a subdued consumer sentiment, especially towards high-value discretionary spend categories. It added around 16,200 new members to its vacation ownership business, taking the total membership to close to two lakh at the end of the year. The new member addition was higher as compared to the previous year, and reflects the successful execution of Company''s strategy to focus on high quality leads from pull-based channels such as referrals and digital. During the year, the Company added 87 new room units, taking the total inventory to 2,879 units as of March 31, 2016.

The Company, during the month of September 2015, had increased its stake in Holiday Club Resorts Oy, Finland (HCR) from 23.3 per cent to 85.6 per cent resulting in HCR becoming a subsidiary company of the Company.

Your Company''s total income (including other income) grew from Rs. 80,756 lakh in 2014-15 to Rs. 96,261 lakh in 2015-16. Profit after taxes (PAT) grew from Rs. 7,902 lakh in 2014-15 to Rs. 11,735 lakh in 2015-16. Diluted earnings per share (EPS) for 2015-16 stood at Rs. 13.29, up from Rs. 8.98 in the previous year.

Your Company''s consolidated total income (including other income) during 2015-16 was Rs. 1,60,382 lakh. The consolidated PAT was Rs. 9,906 lakh and the diluted EPS was Rs. 11.22. The consolidated numbers include results of HCR subsequent to its becoming a subsidiary of your Company.

There are no audit qualifications in the standalone or in the consolidated financial statements by the Statutory Auditors for the year under review.

2. Financial Highlights (Standalone)

(Rs. Lakh)

2016 2015

Income:

Income from sale of Vacation Ownership and other services 95,153 79,485

Other Income 1,108 1,271

Total Income 96,261 80,756

Expenditure:

Less: Employee Cost & other expenses (71,911) (61,506)

Profit before Depreciation, Interest and Taxation 24,350 19,250

Less: Depreciation (7,133) (6,541)

Interest (8) (25)

Profit for the year before Exceptional Item and Tax 17,209 12,684

Less: Exceptional Item (pre-tax) - (2,188)

Profit for the year before Tax 17,209 10,496

Less: Provision for Tax - Current Tax (4,984) (1,920)

- Deferred tax (net) (490) (674)

Net Profit for the year after tax 11,735 7,902

Balance brought forward from earlier years 34,070 37,688

Less: Adjustment on Amalgamation (1,516) (4,560)

Less: Loss of Bell Tower Resorts Private Limited erstwhile wholly owned subsidiary for the year 2013-14 - (870)

Less: Depreciation adjustment consequent to transition to Schedule II of the Companies Act, 2013 net of deferred tax of Rs. 528 lakh - (1,026)

44,289 39,134

Appropriations:

General Reserve (1,170) (790)

Proposed Dividend on Equity Shares (4,439) (3,551)

Income Tax on Proposed Dividend (904) (723)

Surplus carried to Balance Sheet 37,776 34,070

3. Dividend

Your Directors are pleased to recommend a dividend of Rs. 5/- per equity share of face value Rs. 10/- each for the financial year ended March 31, 2016. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the shareholders whose names appear on the register of members of the Company as on the Book Closure Date. The equity dividend outgo for 2015-16, inclusive of tax on distributed profits would absorb a sum of Rs. 5,343 lakh (as compared to Rs. 4,274 lakh comprising the dividend of Rs. 4/- per equity share and tax on distributed profits paid for the previous financial year).

4. Transfer to Reserve

The Board of Directors proposes to transfer Rs. 1,170 lakh to the General Reserve representing around 10 per cent of the proft for the year. The balance is proposed to be retained in the Proft & Loss Account.

5. Share Capital

The paid up equity share capital as on March 31, 2016 was Rs. 8,878 lakh. During the year under review, your Company did not issue shares with differential voting rights / sweat equity except fresh grant issued under the Company''s Employee Stock Option Scheme 2014, discussed later in this report.

Details of Directors''shareholding as on March 31, 2016, are mentioned in the Corporate Governance Report, which forms a part of this Annual Report.

6. Scheme of Amalgamation and Arrangement pertaining to Competent Hotels Private Limited, Divine Heritage Hotels Private Limited and Holiday on Hills Resorts Private Limited, wholly owned subsidiary companies

During the year under review, Competent Hotels Private Limited (CHPL), Divine Heritage Hotels Private Limited (DHHPL) and Holiday on Hills Resorts Private Limited (HHRPL), wholly owned subsidiary companies of the Company, were amalgamated with the Company with effect from March 31, 2016, being the date of fling the Order of Hon''ble High Court of Madras with the Registrar of Companies at Chennai. The Appointed Date fixed for the amalgamation was April 1, 2015 and the respective Schemes of the Amalgamation and Arrangement ("the Scheme") were approved by the Hon''ble High Courts of Chennai, Delhi, Jaipur and Himachal Pradesh on January 29, 2016, February 29, 2016, February 19, 2016 and February 25, 2016 respectively.

Consequent to the above, CHPL, DHHPL and HHRPL ceased to be subsidiaries of the Company and the entire business, all the assets and liabilities, duties and obligations of CHPL, DHHPL and HHRPL have been transferred to and vested in the Company pursuant to the Scheme with effect from April 1, 2015 ("the Appointed Date"). There was no allotment of shares to the equity shareholders of CHPL, DHHPL and HHRPL since they were wholly owned subsidiaries of the Company. The amalgamation has been accounted under the ''pooling of interest method''referred in Accounting Standard 14 and the assets and liabilities transferred have been recorded at their book values as on the Appointed Date. Further, difference of Rs. 9,317 lakh between value of assets and liabilities acquired at their book value at the Appointed Date as reduced by carrying value of investment in the books of the Company was adjusted in the "Amalgamation and Reserve Account" and the same was transferred to "Securities Premium Account" on the Appointed Date as per the approved Scheme.

7. Related Party Transactions

Your Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review are on arm''s length basis and in the ordinary course of business and that the provisions of the Section 188 of the Companies Act, 2013 ("the Act") are not attracted.

During the year under review, your Company has provided corporate guarantee on behalf of MHR Holdings (Mauritius) Limited (MHR Holdings), wholly owned subsidiary of the Company, in respect of funds raised by it in Mauritius in order to further invest in Holiday Club Resorts Oy, Finland (HCR). This investment in HCR by MHR Holdings were made through its wholly owned subsidiary Covington S.Ã .r.l, Luxembourg (Covington). Your Directors confirm that this transaction with MHR Holdings is in the ordinary course of business and at arm''s length as per the transfer pricing guidelines.

Apart from the above transaction with MHR Holdings, your Company had not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions (RPT Policy). The details of the above material related party transactions with MHR Holdings at an aggregate level for the year ended March 31, 2016 is annexed to this report as Annexure 1.

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

The RPT Policy as approved by the Audit Committee and the Board is available on the website of the Company at the following link: http://www.clubmahindra.com/sites/default/ files/Policy_on_RPT.pdf.

Your Directors draw attention of the members to Note No. 44 to the standalone financial statements which sets out related party disclosure.

8. Particulars of Loans and Advances, Guarantees or Investments

As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Act related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans made, and guarantees given to / on behalf of subsidiary companies / JV company are provided in the standalone financial statement at Note No.44 to the standalone financial statements. These loans and guarantees for which loans are provided are proposed to be utilised by the respective recipients for their business purposes.

The details of loans and advances which are required to be disclosed in the annual report of the Company pursuant to Regulation 34(3) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") are furnished separately as Annexure 2 to this report.

Particulars of investments made by the Company are provided in the standalone financial statements at Note Nos. 13 and 16.

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

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

10. Corporate Social Responsibility

Corporate Social Responsibility (CSR) activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. These are discussed in detail in the Management Discussion and Analysis Report, which forms a part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this report and is annexed herewith as Annexure 3.

11. Sustainability

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

12. Corporate Governance Report

A Report on Corporate Governance along with a certificate from the statutory auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations forms a part of this Annual Report.

13. Management Discussion and Analysis Report

A detailed analysis of the Company''s operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Resort Operations, Member Relations, Quality and Information Technology are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

14. Whistle Blower Policy & Vigil Mechanism

The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Corporate Governance Report, which forms a part of this Annual Report.

15. Employees''Stock Option

Employees Stock Options represent a reward system based on performance. It helps companies attract retain and motivate the best available talent. This also provides an opportunity to employees to participate in the growth of the Company, besides creating long term wealth in their hands. In line with this, the Company formulated the employees stock option scheme called Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2006 ("MHRIL ESOS 2006") and was approved by the shareholders at the Annual General Meeting of the Company held on May 17, 2006. Further, subsequent to the initial public offer, the MHRIL ESOS 2006 was ratified by the Shareholders by way of postal ballot on December 23, 2009. The MHRIL ESOS 2006 will remain in operation till the exercise of Options granted under this scheme.

In addition to above and continue to reward the employees, the Board of Directors of your Company have introduced new employee stock option scheme namely "Mahindra Holidays & Resorts India Limited Employees''Stock Option Scheme 2014" ("MHRIL ESOS 2014") and approved by the shareholders by way of postal ballot on December 26, 2014, in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (''SEBI ESOP Regulations'').

Further, the balance shares available under MHRIL ESOS 2006 together with any other shares represented by Options that may lapse for any reason thereat, will also be available for issuing/granting Options to the Employees under MHRIL ESOS 2014.

During the year under review, on the recommendation of the Nomination and Remuneration Committee, a total of 3,10,000 new options were granted (Grant II & III) under the MHRIL ESOS 2014.

Details required to be provided under the under Regulation 14 of SEBI ESOP Regulations is available on the Company''s website http://www.clubmahindra.com/about-us/ investor-relations.

A certifcate from the Statutory Auditors of the Company confirming that the MHRIL ESOS 2006 and MHRIL ESOS 2014 have been implemented in accordance with the SEBI ESOP Regulations, and the resolution passed by the shareholders, will be placed at the ensuing Annual General Meeting for inspection by members.

16. Subsidiaries, Joint Venture and Associate Companies

During the year under review and as reported earlier in this report, Competent Hotels Private Limited (CHPL), Divine Heritage Hotels Private Limited (DHHPL) and Holiday on Hills Resorts Private Limited (HHRPL), ceased to be subsidiaries of your Company consequent to amalgamation of CHPL, DHHPL and HHRPL with the Company with effect from March 31, 2016.

Further, the Company has increased its equity investment in Gables Promoters Private Limited (GPPL), a wholly owned subsidiary, by conversion of the unsecured Inter Corporate Deposits amounting to Rs. 36,47,86,000/- given to GPPL into 3,64,78,600 Equity Shares of Rs. 10/- each at par.

As reported earlier in this report, your Company through its subsidiary Covington S.Ã .r.l, Luxemburg (Covington), increased its equity stake from 23.3% to 85.6% in September, 2015, in Holiday Club Resorts Oy, Finland (HCR). Consequently, HCR became subsidiary company of Covington and in turn subsidiary company of the Company with efect from September 2, 2015.

Also, your Company through its subsidiary Covington, increased its equity stake from 18.7% to 100% in HCR Management Oy Finland, (HCRM), with efect from September 2, 2015. Consequently, HCRM became wholly subsidiary company of Covington and in turn subsidiary company of the Company. Covington is the holding company for investments in HCR and HCRM.

In addition to the above, Holiday Club Sweden Ab, Ownership Service Sweden AB, Holiday Club Canarias Investment S.L.U, Holiday Club Canarias Sales & Marketing S.L.U, Holiday Club Canarias Resort Management S.L.U, Holiday Club Rus Resorts LLC, Suomen Vapaa-aikakiinteistÃ¶t Oy, KiinteistÃ¶ Oy Himos Gardens, KiinteistÃ¶ Oy Himoksen TÃ¤hti 2 Oy, KiinteistÃ¶

Oy Tunturinrivi, KiinteistÃ¶ Oy Vanha YkkÃ¶stii, KiinteistÃ¶ Oy Katinnurkka, KiinteistÃ¶ Oy Tenetinlahti, KiinteistÃ¶ Oy MÃ¤llÃ¶sniemi, KiinteistÃ¶ Oy Rauhan Ranta 1, KiinteistÃ¶ Oy Rauhan Ranta 2, KiinteistÃ¶ Oy Tiurunniemi, Saimaa Gardens Arena Oy (associate company till January 18, 2016), KiinteistÃ¶ Oy Rauhan LiikekiinteistÃ¶t 1, Supermarket Capri Oy, KiinteistÃ¶ Oy KylpylÃ¤ntorni 1, KiinteistÃ¶ Oy Spa Lofts 2, KiinteistÃ¶ Oy Spa Lofts 3, KiinteistÃ¶ Oy Kulennoinen, KiinteistÃ¶ Oy Kuusamon PulkkajÃ¤rvi 1, Caribia Service Oy, Holiday Club Sport and Spahotel AB, Are Semesterby A AB, Are Semesterby B AB, Are Semesterby C AB, Are Semesterby D AB, Are Villa 1 AB and Are Villa 2 AB became subsidiary companies of your Company during the year under review.

Further, KiinteistÃ¶ Oy Jalomella, KiinteistÃ¶ Oy Outapalas, KiinteistÃ¶ Oy Ulkuvuoma, KiinteistÃ¶ Oy Lappeenrannan Saimaan Kreivi, Sallan Tunturipalvelut Oy, KiinteistÃ¶ Oy Katinkullan Villas Parkki, Holiday Club Golf Saimaa Oy, Saimaa Action Park Oy, KiinteistÃ¶ Oy Kulennoinen, Kongressi- ja KylpylÃ¤hotelli Caribia Oy, SaariselkÃ¤ Resort Oy, Himos Hillside Golf Oy, KiinteistÃ¶ Oy Pisterinniementie 2, Holiday Club Katinkullan Villas Oy, KiinteistÃ¶ Oy Katinpalsta, KiinteistÃ¶ Oy Rauhan Ranta 6, KiinteistÃ¶ Oy Rauhan Parkki, Saimaan PalvelukiinteistÃ¶t Oy, KiinteistÃ¶ Oy Paviljongin PysÃ¤kÃ¶inti and KiinteistÃ¶ Oy Hakan PerusyhtiÃ¶ 79, which became subsidiary companies of your Company during the year under review, subsequently ceased to be subsidiaries of your Company during the year under review.

As of March 31, 2016, your Company has 41 subsidiaries (including 36 indirect subsidiaries), 1 JV company and 4 associate companies (including 3 indirect associates).

17. Performance of Subsidiaries

Domestic Subsidiaries

Gables Promoters Private Limited (GPPL), is the wholly owned subsidiary company of the Company. GPPL is currently developing a resort property of around 120 rooms at Naldhera, Shimla, Himachal Pradesh and the construction of the same is at an advanced stage. GPPL is yet to commence operation.

Mahindra Hotels and Residences India Limited (MHARIL) is the wholly owned subsidiary company of the Company. MHARIL did not have any operation during the year under review.

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd, Malaysia (Heritage Bird) is the wholly owned subsidiary company of the Company. Heritage Bird''s principal activities are holding of investment and leasing of properties. Heritage Bird has rooms/units in apartment properties in a well-known location at Kuala Lumpur, Malaysia.

MH Boutique Hospitality Limited, Thailand (MH Boutique), in which your Company holds forty nine per cent of equity stake, is the subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand.

Infinity Hospitality Group Company Limited, Thailand (Infinity) is the subsidiary company of MH Boutique and by virtue of the same is also subsidiary of the Company. Infinity own and operate a hotel/apartment property at Bangkok, Thailand. Your Company avails rooms in the hotel property of Infinity for usage of its guests and vacation ownership members.

MHR Holdings (Mauritius) Limited, Mauritius (MHR Holdings), is a wholly owned subsidiary company of the Company. The principal activity of MHR Holdings is to hold investments. Currently, it hold investment in Covington S.Ã .r.l, Luxembourg.

Covington S.Ã .r.l, Luxemburg (Covington) is a wholly owned subsidiary of MHR Holdings and in turn a subsidiary of your Company. Further, as reported earlier in this report, Covington, during the year under review, had increased its stake in Holiday Club Resorts Oy, Finland (HCR) and HCR Management Oy, Finland (HCRM) by acquiring shares from their respective shareholders. Consequent to these investments HCR and HCRM became subsidiaries of Covington and in turn of the Company with effect from September 2, 2015. Further, post increase in its stake, Covington had also made fresh investment in share capital of HCR during September 2015.

HCR, subsidiary of Covington in turn of the Company, is a leading weekly timeshare company in Europe and a significant operator in the fields of holiday housing and tourism. As of March 31, 2016, HCR has 31 resorts of which 23 are located in Finland, 2 in Sweden and 6 in Spain. Further, out of these, 7 resorts in Finland and 1 resort in Sweden have a spa hotel attached. HCR operates 1,159 hotel rooms and 2,173 holiday homes (Time share units and villa units).

HCRM, which became wholly owned subsidiary of Covington in turn of the Company during the year, is primarily engaged in the sale and trade of real estates, property management, investment activities and dealing in securities. HCRM hold investment in the share capital of HCR.

Joint Venture

Arabian Dreams Hotel Apartments LLC, Dubai (Arabian Dreams), a Joint Venture company of the Company operates 75 room hotel property in Dubai (UAE) taken on lease basis. Your Company avails rooms/apartments in the hotel property of Arabian Dreams for usage of its guests and vacation ownership members.

Associate Companies

Guestline Hospitality Management & Development Services Limited (Guestline) is an associate company of your Company pursuant to the provisions of the Act, as the Company is holding more than 20 per cent of total share capital which includes preference share capital. Guestline did not have any operations during the year under review.

During the year under review, KiinteistÃ¶ Oy Seniori-Saimaa, Saimaa Adventures Oy and KiinteistÃ¶ Oy Sallan KylpylÃ¤, associate companies of HCR became associate companies of your Company.

A report on the performance and financial position of each of the subsidiaries, associates and joint venture company as per the Act is provided as Annexure to the consolidated financial statements and hence not repeated here for the sake of brevity.

The policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website at the link: http://www.clubmahindra.com/sites/default/fles/ Policy_For_Determining_Material_Subsidiaries.pdf.

In accordance with the third proviso to Section 136(1) of the Act, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on Company''s website www.clubmahindra.com. Further, as per fourth proviso to the said Section, the audited annual accounts of each of the said subsidiary companies of the Company are also available in the Company''s website www.clubmahindra.com. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Company''s Registered Office. Further, the said documents will be available for examination by the shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 11.00 AM to 1.00 PM.

18. Directors

As on March 31, 2016, your Company had 10 Directors, which include 5 Independent Directors (IDs), 3 Non-Executive Directors (NEDs) and 2 Executive Directors (EDs).

19. Retirement by Rotation

In terms of the Articles of Associations of the Company and as per Section 152(6) of the Act, Mr. Arun Kumar Nanda, being longest in the office, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

20. Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Act that he / she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 16 of SEBI Listing Regulations.

21. Key Managerial Personnel (KMPs)

Mr. Kavinder Singh, Managing Director & Chief Executive Officer, Mr. S Krishnan, Chief Financial Officer & Executive Director and Mr. Dinesh Shetty, General Counsel & Company Secretary, are the KMPs as per the provisions of the Act. None of the KMPs resigned during the year.

22. Board Evaluation

The Board has conducted annual evaluation of the performance of all it''s Directors, Committees of the Board and that of it''s Non-Executive Chairman, in terms of the relevent provisions of the Act, Rules made thereunder and SEBI Listing Regulations. The manner in which the evaluation was conducted by the Company has been explained in the Corporate Governance Report, which forms a part of this Annual Report.

The Policy on appointment of Directors and Senior Management, Policy on Remuneration of Directors and Policy on Remuneration of Key Managerial Personnel and Employees are attached herewith and marked as Annexure 4, Annexure 5A and Annexure 5B respectively.

The Managing Director & CEO and Chief Financial Officer & Executive Director do not receive remuneration or commission from any of its subsidiaries and draw remuneration only from the Company.

23. Number of Board Meetings

During the year under review, the Board of Directors met Six times. The details of Board Meetings and attendance of Directors are provided in the Report on Corporate Governance, which forms a part of this Annual Report.

24. Composition of Audit Committee

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

25. Directors''Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made 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 as at March 31, 2016 and of the profit of the Company for the year ended on that date;

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

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

26. Internal Financial Controls and Their Adequacy

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

27. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and it''s subsidiaries prepared in accordance with the Act and applicable Accounting Standards forms part of this Annual Report.

The Consolidated Financial Statements presented by the Company includes the financial results of it''s subsidiary companies, associates and joint venture company.

28. Risk Management

Your Company has a well-defined risk management framework to identify and evaluate elements of business risk. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

29. Auditors

A) Statutory Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai, statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

As required under the provisions of section 139(1) of the Companies Act, 2013, the Company has received a written consent from Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai to their re-appointment and a Certificate to the effect that their re-appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Act.

B) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed Mr. Mukesh Siroya, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the secretarial auditors is annexed herewith as Annexure 6.

There are no qualifications, reservations or adverse remarks made by Mr. Mukesh Siroya, Practising Company Secretaries, secretarial auditors of the Company in their secretarial audit report.

30. Deposits

Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date.

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

There are no material changes and commitments, affecting financial position of the Company which have occurred between the end of the financial year of the Company i.e. March 31, 2016, and the date of the Directors''Report.

32. Extract of Annual Return

An extract of the Annual Return as of March 31, 2016 pursuant to the sub section (3) of Section 92 of the Act, in form MGT 9 is annexed herewith as Annexure 7.

33. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. Some of these initiatives are discussed in the section on Sustainability in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

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

34. Human Resources

Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Your Company has a structured induction process at all its locations and management development programs to upgrade skills of managers. These are discussed in detail in the

Management Discussion and Analysis Report forming part of this Annual Report.

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. There was no complaint pending at the beginning of the year. During the year under review, the Company received two complaints under the Policy, while one complaint was disposed of during the year and other one was disposed of in the month of April 2016. Further, there were no complaints pending for more than 90 days during the year.

35. Particulars of Employees

The ratio of the remuneration of each director to the median employees''remuneration and other details in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the Rules"), forms a part of this report as Annexure 9. The Company had 8 (Eight) employees who were employed throughout the year and were in receipt of remuneration more than Rs. 60 lakh per annum and 3 (Three) employees were employed for part of the year and were in receipt of remuneration of more than Rs. 5 lakh per month. In terms of Section 136 of the Act, the copy of the financial statements of the Company, including the consolidated financial statements, the auditor''s report and relevant annexures to the said financial statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Company''s Registered Office during all working days except on Saturday, Sunday, Public Holidays and National Holidays, between 11.00 AM to 1.00 PM. up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Company at its Registered Office. The financial statements, reports etc. of the Company are available on the website of the Company www.clubmahindra.com.

36. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company''s customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

ARUN KUMAR NANDA

Place: Mumbai Chairman

Date: May 17, 2016 DIN: 00010029

Mar 31, 2015

Dear Members,

The Directors are pleased to present their Nineteenth Report together with the audited accounts of your Company for the year ended March 31, 2015.

1. Operations / State of the Company''s Affairs

During 2014-15, your Company performed creditably in a challenging macroeconomic environment. It added around 12,800 new members to its vacation ownership business, taking the total membership to around one lakh eighty three thousand at the end of the year. The new member addition was marginally higher as compared to the previous year, and reflects successful execution of Company''s strategy to focus on quality ''pull'' leads from referrals and digital channels. During the year, the pace of room inventory expansion was commendable. It added another 409 units to its inventory, taking the total room inventory to 2,816 units at the end of the year.

In another important development, your Company through its subsidiary Covington S.a.r.l, Luxembourg, acquired 23.32 per cent equity stake of Holiday Club Resorts Oy, Finland, Europe''s leading vacation ownership company with around 50,000 members and 30 resorts Â of which 22 are in Finland, 2 in Sweden and 6 in Spain. Your Company also has a right to increase its ownership within a period of two years. This investment allows your Company to offer member exchange opportunities and opens up growth opportunities in Europe and other international destinations.

Your Company''s total income (including other income) grew marginally from Rs.79,893 lakh in 2013-14 to Rs.80,756 lakh in 2014- 15. Profit after taxes (PAT) declined from Rs.9,453 lakh in 2013-14 to Rs.7,902 lakh in 2014-15 mainly due to increase in depreciation charge by Rs.2,738 lakh, primarily due to change in useful life of the assets, and an exceptional item of Rs.2,188 lakh (pre-tax) written off consequent to adjustments relating to past periods. Diluted earnings per share (EPS) was Rs.8.98 in 2014-15, down from Rs.10.75 in the previous year.

Your Company''s consolidated total income (including other income) during 2014-15 was Rs.82,964 lakh. The consolidated profit after taxes (PAT) was Rs.8,122 lakh and the diluted EPS was Rs.9.23.

There are no audit qualifications in the standalone or in the consolidated financial statements by the statutory auditors for the year under review.

2. Financial Highlights (Standalone)

(Rs Lakh) 2015 2014 Income:

Income from sale of Vacation Ownership 79,485 77,752 and other services

Other Income 1,271 2,141

Total Income 80,756 79,893

Expenditure :

Less: Employee Cost & other expenses (61,506) (61,851)

Profit before Depreciation, Interest 19,250 18,042 and Taxation

Less: Depreciation (6,541) (3,803)

Interest (25) (97)

Profit for the year before Exceptional 12,684 14,142 Item and Tax

Less: Exceptional Item (pre-tax) (2,188) -

Profit for the year before Tax 10,496 14,142

Less: Provision for Tax - Current Tax (1,920) (2,910)

- Deferred tax (net) (674) (1,779)

Net Profit for the year after tax 7,902 9,453

Balance brought forward from earlier years 37,688 33,335

Less : Adjustment on Amalgamation of Bell Tower (4,560) - Resorts Private Limited (BTRPL)

Less : Loss of BTRPL for the year 2013-14 (870) -

Less : Depreciation adjustment consequent to transition to Schedule II of the Companies Act, 2013 net of deferred tax of Rs.528 lakh (1,026) -

39,134 42,788

Appropriations:

General Reserve (790) (945)

Proposed Dividend on Equity Shares (3,551) (3,551)

Income Tax on Proposed Dividend (723) (604)

Surplus carried to Balance Sheet 34,070 37,688

3. Dividend and Reserve

Your Directors are pleased to recommend a dividend of Rs.4 /- per equity share of face value Rs.10 each for the financial year ended March 31, 2015. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the shareholders whose names appear on the register of members of the Company as on the Book Closure Date. The equity dividend outgo for 2014-15, inclusive of tax on distributed profits would absorb a sum of Rs.4,274 lakh (as compared to Rs.4,155 lakh comprising the dividend of Rs.4/- per equity share paid for the previous year). The Board of Directors proposes to transfer Rs.790 lakh to the General Reserve representing around 10 per cent of the profit for the year. The balance is proposed to be retained in the Profit & Loss Account.

4. Share Capital

The paid up equity share capital as on March 31, 2015 was Rs.88.78 crore. During the year under review, your Company did not issue shares with differential voting rights / sweat equity except fresh grant issued under the Company''s Employee Stock Option Scheme 2014 discussed later in this report. Details of Directors'' shareholding as on March 31, 2015, are mentioned in the Corporate Governance Report, which forms a part of this Annual Report.

5. Institutional Placement Programme (IPP)

During 2013-14, your Company had successfully carried out an Institutional Placement Programme (IPP) and allotted the shares to Qualified Institutional Buyers (QIBs) under Chapter VIII-A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended from time to time, in order to meet the minimum public shareholding requirements of 25 per cent. Your Company had issued and allotted 41,41,084 Equity Shares of Rs.10 each at a premium of Rs.245 per share aggregating to Rs.10,560 lakh to QIBs under IPP.

Your Directors are pleased to inform you that during the year under review, your Company completed the utilisation of funds raised from the IPP towards the objects of the issue.

6. Schemes of Amalgamation and Arrangement pertaining to wholly owned subsidiary companies

A) Bell Tower Resorts Private Limited

During the year under review, Bell Tower Resorts Private Limited (BTRPL), a wholly owned subsidiary company of the Company, was amalgamated with the Company with effect from July 31, 2014, being the date of filing the Orders of Hon''ble High Courts of Bombay at Goa and Madras with the Registrar of Companies at Goa and Chennai respectively.

Consequent to the above, BTRPL ceased to be subsidiary of the Company and all the assets and liabilities of BTRPL have been transferred to and vested in the Company pursuant to the Scheme of Amalgamation and Arrangement ("the Scheme") with effect from April 1, 2013 ("the Appointed Date"). There was no allotment of shares to the BTRPL equity shareholders since the BTRPL was a wholly owned subsidiary of the Company. The amalgamation has been accounted under the ''pooling of interest method'' referred in Accounting Standard 14 and the assets and liabilities transferred have been recorded at their book values as on the Appointed Date. Further, difference of Rs.3,061 lakh between value of assets and liabilities acquired at their book value at the Appointed Date as reduced by carrying value of investment in the books of the Company was adjusted in the "Amalgamation and Reserve Account" and the same was transferred to "Securities Premium Account" on the Appointed Date as per the approved Scheme. Further, the loss of Rs.870 lakh of BTRPL for the year ended March 31, 2014 has been adjusted against the surplus in the Statement of Profit and Loss at the beginning of the year.

B) Competent Hotels Private Limited, Divine Heritage Hotels Private Limited and Holiday on Hills Resorts Private Limited

During the year under review, the Board approved the Scheme of Amalgamation and Arrangement ("the Scheme") for merger of Competent Hotels Private Limited, Divine Heritage Hotels Private Limited and Holiday on Hills Resorts Private Limited, wholly owned subsidiaries (collectively referred as "Subsidiary Companies") of the Company with the Company. These Subsidiary Companies own and operate resort properties at Manali (Himachal Pradesh), Kandaghat (Himachal Pradesh) and Jaisalmer (Rajasthan) respectively.

The Board felt that it is in the best interest of the Company to merge these Subsidiary Companies with the Company so as to benefit from operational and managerial synergies in the form of economies of cost, enhancing flexibility and pooling of managerial resources. The Appointed Date of the Scheme is April 1, 2015 and the Scheme shall be effective from the last of the dates on which the certified or authenticated copies of the Orders of the Hon''ble High Courts of Delhi, Rajasthan at Jaipur, Himachal Pradesh and Madras are filed with the respective Registrar of Companies.

Subsequent to approval of the Scheme by the Board, your Company has obtained letters from BSE Limited and National Stock Exchange of India Limited conveying that they have no objections / no adverse observations in respect of the same, and your Company is in the process of filing necessary application with the Hon''ble High Court of Madras for obtaining necessary directions to convey the meetings of Shareholders of the Company for taking their approval on aforementioned merger.

7. Related Party Transactions

Your Company undertakes various transactions with related parties in the ordinary course of business. All transactions entered with related parties during the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of the Section 188 of the Companies Act, 2013 ("the Act") were not attracted.

During the year under review, your Company made investments in MHR Holdings (Mauritius) Limited, ("MHR Holdings") and it became wholly owned subsidiary of the Company. Further, your Company has provided corporate guarantees on behalf of MHR Holdings in respect of funds raised by it in Mauritius in order to make investments in Holiday Club Resorts Oy, Finland (HCR). These investments in HCR by MHR Holdings were made through its wholly owned subsidiary Covington s.a.r.l., in Luxembourg. Your Directors confirm that these transactions with MHR Holdings are in the ordinary course of business and at arm''s length as per the transfer pricing guidelines.

Apart from the above transactions with MHR Holdings, your Company had not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The details of the above material related party transactions with MHR Holdings at an aggregate level for the year ended March 31, 2015 is annexed to this report as Annexure 1.

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

The Policy on materiality of related party transactions and also in dealing with related party transactions as approved by the Audit Committee and the Board is available on the website of the Company at the following link: http://www.clubmahindra. com/sites/default/files/Policy_on_Materiality.pdf.

Your Directors draw attention of the members to Note No. 41 to the standalone financial statements which sets out related party disclosure.

8. Particulars of Loans and Advances, Guarantees or Investments

As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Act related to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans made, and guarantees given to / on behalf of subsidiary companies / JV company are provided in the standalone financial statement at Note No.41. These loans and guarantees for which loans are provided are proposed to be utilised by the respective recipients for their business purposes.

Particulars of investments made by the Company are provided in the standalone financial statement at Note Nos. 13 and 16.

The details of loans and advances which are required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately as Annexure 2 to this report.

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

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

10. Corporate Social Responsibility

Corporate Social Responsibility (CSR) activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. These are discussed in detail in the Management Discussion and Analysis Report, which forms a part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this Annual Report and is annexed herewith as Annexure 3.

11. Sustainability

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

12. Corporate Governance Report

A Report on Corporate Governance along with a certificate from the statutory auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement forms a part of this Annual Report.

13. Management Discussion and Analysis Report

A detailed analysis of the Company''s operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Member Relations, Quality and Information Technology are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

14. Vigil Mechanism / Whistle Blower Mechanism

The Company has established a vigil mechanism by adopting Whistle Blower Policy pursuant to which whistle blowers can raise concerns in prescribed manner. Further, the mechanism adopted by the Company encourages a whistle blower to

report genuine concerns or grievances and provides for adequate safeguards against victimisation of the whistle blower who avails of such mechanism as well as direct access to the Chairman of the Audit Committee. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time.

None of the whistle blowers have been denied access to the Audit Committee of the Board. The details of the Whistle Blower Policy is available on the website of the Company http://www. clubmahindra.com/sites/default/files/MHRIL_Whistle_Blower_ Policy.pdf.

15. Employees'' Stock Option

During the year under review, in order to enable its employees to participate in the Company''s future growth and financial success and on the basis of the approval obtained from the Members through Postal Ballot, your Company had formulated the Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2014 (MHRIL ESOS 2014). The MHRIL ESOS 2014 is administered and implemented in accordance with the directions of the Nomination and Remuneration Committee (the "Committee") and in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the "SEBI Regulations"). The MHRIL ESOS 2014 will be administered and implemented either through existing Mahindra Holidays & Resorts India Limited Employees Stock Option Trust (the "Trust") or through a trust or other entity which may be setup for this purpose or directly by the Company.

The earlier employee stock option scheme i.e. Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2006 (MHRIL ESOS 2006) will remain in operation till the exercise of options granted under this scheme.

During the year under review, on the recommendation of the Committee, 6,20,000 new options were granted under the MHRIL ESOS 2014. Details required to be provided under the SEBI Regulations and the Act in respect of MHRIL ESOS 2006 and MHRIL ESOS 2014 are set out in Annexure 4 to this Report.

A certificate from the statutory auditors of the Company that the MHRIL ESOS 2006 and MHRIL ESOS 2014 have been implemented in accordance with the SEBI guidelines and regulations, and the resolution passed by the shareholders, would be placed at the ensuing Annual General Meeting for inspection by members.

16. Subsidiaries, Joint Venture and Associate Companies

During the year under review, Mahindra Holidays and Resorts USA Inc., ceased to be subsidiary of your Company consequent

upon voluntary dissolution with effect from May 19, 2014 and Bell Tower Resorts Private Limited ("BTRPL") ceased to be subsidiary of your Company subsequent to amalgamation of BTRPL with the Company with effect from July 31, 2014.

During the year under review, Competent Hotels Private Limited and MHR Holdings (Mauritius) Limited, Mauritius ("MHR Holdings"), became wholly owned subsidiary companies of your Company with effect from June 18, 2014 and July 11, 2014 respectively. Covington S.a.r.l, Luxemburg, became wholly owned subsidiary company of MHR Holdings with effect from July 17, 2014 and in turn became subsidiary of the Company. As of March 31, 2015 your Company has 10 subsidiaries, 1 JV company and 2 associate companies.

17. Performance of Subsidiaries

Domestic Subsidiaries

Divine Heritage Hotels Private Limited (DHHPL), a wholly owned subsidiary company of the Company. DHHPL own and operate a resort property at Jaisalmer, Rajasthan.

Holiday on Hills Resorts Private Limited (HHRPL), a wholly owned subsidiary company of the Company. HHRPL own and operate a resort property at Kandaghat, Himachal Pradesh.

During the year under review, Competent Hotels Private Limited (CHPL), became a wholly owned subsidiary of the Company with effect from June 18, 2014. CHPL own and operate a resort property at Manali, Himachal Pradesh.

Gables Promoters Private Limited (GPPL), is the wholly owned subsidiary company of the Company. GPPL is currently developing a resort property of around 100 rooms at Naldhera, Shimla, Himachal Pradesh and accordingly, GPPL is yet to commence its operation.

Mahindra Hotels and Residences India Limited (MHARIL) is the wholly owned subsidiary company of the Company. MHARIL did not have any operation during the year under review.

During the year under review, erstwhile Bell Tower Resorts Private Limited which owned and operated a resort property at Goa was ceased to be subsidiary company of the Company consequent to the amalgamation with the Company with effect from July 31, 2014.

Foreign Subsidiaries

Heritage Bird (M) Sdn. Bhd, Malaysia (Heritage Bird) is the wholly owned subsidiary company of the Company. Heritage Bird''s principal activities are holding of investment properties and provision for time sharing services. Heritage Bird own rooms in a well-known location at Kuala Lumpur, Malaysia.

MH Boutique Hospitality Limited, Thailand (MH Boutique), in which your Company holds forty nine per cent of equity stake,

is the subsidiary of the Company by virtue of control on the composition of the Board of MH Boutique and it mainly holds investments in Infinity Hospitality Group Company Limited, Thailand.

Infinity Hospitality Group Company Limited, Thailand (Infinity) is the subsidiary company of MH Boutique and by virtue of the same is also subsidiary of the Company. Infinity own and operate a hotel property at Bangkok, Thailand.

During the year under review, MHR Holdings (Mauritius) Limited, Mauritius (MHR Holdings), became wholly owned subsidiary company of the Company with effect from July 11, 2014. The principal activity of MHR Holdings is to hold investments.

During the year under review, Covington S.a.r.l, Luxemburg (Covington) became wholly owned subsidiary company of MHR Holdings with effect from July 17, 2014 and in turn became subsidiary of your Company. Further, as reported earlier in this report, Covington, during the year under review, had invested in share capital of Holiday Club Resorts Oy, Finland.

During the year under review, the erstwhile Mahindra Holidays and Resorts USA Inc., ceased to be wholly owned subsidiary of the Company consequent to voluntary dissolution with effect from May 19, 2014.

Joint Venture

Arabian Dreams Hotel Apartments LLC, Dubai, operates a hotel property in Dubai (UAE) and is a Joint Venture company of the Company.

Associate Companies

During the year under review, your Company made investment in Holiday Club Resorts Oy, Finland (HCR), a Europe''s leading vacation ownership company, through its subsidiary, Covington, to the extent of 23.32 per cent in equity share capital of HCR. Accordingly, HCR became an associate company of Covington and in turn an associate company of the Company.

Guestline Hospitality Management & Development Services Limited (Guestline) became an associate company of your Company pursuant to the provisions of the Act, as the Company is holding more than 20% of total share capital which includes preference share capital. Guestline did not have any operations during the year under review.

A report on the performance and financial position of each of the subsidiaries, associate and joint venture companies as per the Companies Act, 2013 is provided as Annexure A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity. The policy for determining material subsidiaries as approved by the Board may be

accessed on the Company''s website at the link: http://www. clubmahindra.com/sites/default/files/Policy_for_Determining_ Material_Subsidiaries.pdf. During the year under review, there were no Material Subsidiaries and Material Indian Non-Listed Subsidiaries of the Company, in terms of the proviso to revised Clause 49 V of the Listing Agreement and Company''s Policy for Determining Material Subsidiaries.

In accordance with third proviso to Section 136(1) of the Act, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on Company''s website www.clubmahindra.com. Further, as per fourth proviso to the said Section, the audited annual accounts of each of the said subsidiary companies of the Company are also available in the Company''s website www.clubmahindra.com. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Company''s Registered Office. Further, please note that the said documents will be available for examination by the shareholders of the Company at its Registered Office during business hours.

18. Directors

As on March 31, 2015, your Company had 10 Directors, which include 5 Independent Directors (IDs), 3 Non-Executive Directors (NEDs) and 2 Executive Directors (EDs).

A) Appointment of Directors

At the last Annual General Meeting of the Company held during the year under review, the members approved the appointments of Mr. Cyrus Guzder, Mr. Sridar Iyengar, Mr. Rohit Khattar and Mr. Sanjeev Aga, as Independent Directors, not liable to retire by rotation, for a period of 5 years.

During the year, in terms of the Section 149 of the Act and Clause 49 of the Listing Agreement, and on the recommendation of Nomination and Remuneration Committee (NRC), the Board had appointed Ms. Radhika Shastry and Mr. V S Parthasarathy as Additional Directors on the Board with effect from August 27, 2014.

The Board of Directors at their meeting held on September 29, 2014, on the recommendation of NRC, appointed Mr. Kavinder Singh as an Additional Director with effect from November 3, 2014, and as Managing Director & CEO for a period of 5 years.

Subsequently, Members through Postal Ballot on December 26, 2014, approved the appointment of Mr. Parthasarathy as a Non-Executive Director of the Company, liable to retire by rotation, and Ms. Shastry as Independent Director, not liable to retire by rotation, for a period of 5 years. Members also approved the appointment of Mr. Kavindar Singh as Managing Director & CEO of the Company for a period of 5 years from

November 3, 2014 and the remuneration payable to him for a period of 3 years.

During the year under review, on the recommendation of NRC, Mr. S Krishnan, Chief Financial Officer of the Company was appointed as an Additional Director on the Board of the Company with effect from January 22, 2015. Mr. S Krishnan, subject to approval of shareholders, has also been appointed as Whole Time Director on the Board of the Company for a period of 3 years with effect from January 22, 2015 and designated as Chief Financial Officer & Executive Director. Mr. Krishnan holds the office as an Additional Director upto the date of the forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Act with the requisite deposit from a member proposing Mr. S Krishnan as a candidate for the post of Director of the Company. Accordingly, the approval of Members of the Company is being sought for his appointment as Chief Financial Officer & Executive Director for a period of 3 years in the ensuing Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

B) Director Retiring by Rotation

In terms of the Articles of Associations of the Company and as per Section 152(6) of the Act, Mr. Vineet Nayyar, being longest in the office, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

C) Resignation of Director

Mr. Uday Phadke, Non Executive Director, resigned from the Board of the Company with effect from the conclusion of the 18th Annual General Meeting of the Company held on August 27, 2014. The Board places on record its deep sense of appreciation for the valuable contribution made by Mr. Phadke during his long association with the Company.

19. Key Managerial Personnel

Mr. Kavinder Singh, Managing Director & CEO was appointed as Key Managerial Personnel (KMP) of the Company with effect from November 3, 2014. In addition, Mr. S Krishnan, Chief Financial Officer & Executive Director, and Mr. Dinesh Shetty, Head Legal & Company Secretary, are other KMPs as per the provisions of the Act and were already in office before the commencement of the Act. None of the KMPs resigned during the year.

20. Board Evaluation

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, 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. A structured questionnaire was prepared after circulating the draft forms, 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. The Directors expressed their satisfaction with the evaluation process.

The Policy on appointment of Directors and Senior Management, Policy on Remuneration of Directors and Policy on Remuneration of Key Managerial Personnel and Employees are attached herewith and marked as Annexure 5, Annexure 6A and Annexure 6B respectively.

The Managing Director & CEO and Chief Financial Officer & Executive Director do not receive remuneration or commission from any of its subsidiaries and draw remuneration only from the Company.

21. Number of Board Meetings

During the year under review, the Board of Directors met 8 (Eight) times. The details of board meetings and attendance of Directors are provided in the Report on Corporate Governance, which forms a part of this Annual Report.

22. Composition of Audit Committee

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

23. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable Accounting Standards had been followed and there is no material departure;

b) they have selected such accounting policies and applied them consistently and made 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date;

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

d) the annual accounts have been prepared on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

24. Internal Financial Controls and Their Adequacy

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

25. Consolidated Financial Statement

Pursuant to Section 129 of the Act, the Company has prepared consolidated financial statements of the Company, which shall be laid before the ensuing 19th Annual General Meeting of the Company along with the laying of the Company''s Financial Statement under sub-section (2) of Section 129 of the Act i.e. Standalone Financial Statement of the Company.

Further, pursuant to the provisions of Accounting Standard 21, Consolidated Financial Statements notified under Section 133 of the Act, read together with Rule 7 of the Companies (Accounts) Rules, 2014, issued by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Company along with its subsidiaries, Joint Venture and associate company for the year ended March 31, 2015, form part of this Annual Report.

26. Risk Management

Your Company has a well-defined risk management framework to identify and evaluate elements of business risk. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

27. Auditors

A) Statutory Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai, statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

As required under the provisions of Sections 139 and 141 of the Act, the Company has obtained a written certificate from the above auditors proposed to be reappointed to the effect that their re-appointment, if made, would be in conformity with the provisions specified in the said Sections.

B) Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company has appointed Mr. Mukesh Siroya, Practicing Company Secretary to undertake the secretarial audit of the Company. The Report of the secretarial audit is annexed herewith as Annexure 7.

With respect to the observation made in the secretarial audit report, consequent upon the resignation of erstwhile Managing Director & CEO ("MD&CEO") with effect from the closure of business hours on March 31, 2014, your Company''s Board of Directors at their meeting held on September 29, 2014, had filled up the vacancy by appointing Mr. Kavinder Singh as MD & CEO of the Company. However, he joined the Company only with effect from November 3, 2014, due to his commitment with his previous employer.

Apart from the above observation, there are no qualifications, reservations or adverse remarks made by Mr. Mukesh Siroya, Practising Company Secretaries, Secretarial Auditors of the Company in their secretarial audit report.

28. Deposits

Your Company has not accepted any fixed deposits and, as such no amount of principal or interest are outstanding as of the Balance Sheet date. Your Company has not accepted any deposits from the public or its employees during the year under review.

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

There are no material changes and commitments, affecting financial position of the Company which have occurred between the end of the financial year of the Company i.e March 31, 2015, and the date of the Directors'' Report.

30. Extract of Annual Return

An extract of the Annual Return as of March 31, 2015 pursuant to the sub section (3) of Section 92 of the Act, in form MGT 9 is annexed herewith as Annexure 8.

31. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. Some of these initiatives are discussed in the section on Sustainability in the Management Discussion and Analysis Report.

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act and Rule 8(3)of the Companies (Accounts) Rules, 2014 are given in the Annexure 9 to this Report.

32. Human Resources

Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. It considers people as its biggest assets. It has put concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that your Company consistently develops inspiring, strong and credible leadership. Your Company has a structured induction process at all its locations and management development programs to upgrade skills of managers. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.

The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. During the year under review, the Company received three complaints under the Policy, all of which were disposed-off.

33. Particulars of Employees

The ratio of the remuneration of each director to the median employees'' remuneration and other details in terms of Section 197(12) of the Act with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the Rules"), forms a part of this Annual Report as Annexure 10.

The Company had 8 employees who were employed throughout the year and were in receipt of remuneration more than Rs.60 lakh per annum and 1 employee was employed for part of the year and was in receipt of remuneration of more than Rs.5 lakh per month. In terms of Section 136 of the Act, the copy of the financial statements of the Company, including the consolidated financial statements, the auditor''s report and relevant annexures to the said financial statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Company''s Registered Office during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Company at its Registered Office. The financial statements, reports etc. of the Company are available on the website of the Company www.clubmahindra.com.

34. Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company''s customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

A K NANDA Chairman Place: Mumbai Date: May 18, 2015

Mar 31, 2013

To the Shareholders

The Directors are pleased to present their Seventeenth Report together with the audited accounts of your Company for the year ended 31st March, 2013.

Financial Highlights

(Rs. Lakh)

2013 2012

Income:

Income from sale of Vacation Ownership and other services 65,854 57,383

Other Income 5,740 6,275

Total Income 71,594 63,658

Expenditure :

Less: Employee Cost & other expenses (53,430) (47,037)

Profit before Depreciation, Interest and Taxation 18,164 16,621

Less: Depreciation (2,119) (2,034)

Interest (160) (35)

Profit for the year before tax 15,885 14,552

Less: Provision for Tax -Current Tax (4,731) (4,102)

-Deferred tax (net) (456) 14

Net profit for the year after tax 10,698 10,464

Balance brought forward from earlier years 27,861 22,378

Balance carried forward 38,559 32,842

Appropriations:

General Reserve (1,070) (1,046)

Proposed Final Dividend on Equity Shares (3,551) (3,386)

Income Tax on Proposed Final Dividend (604) (549)

Surplus carried to Balance Sheet 33,334 27,861

Dividend

Your Directors are pleased to recommend a dividend of Rs.4 per Equity Share of the face value of Rs.10 each for the financial year 2012-13. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the Shareholders whose names appear on the register of members of the Company as on the Book Closure Date. This will comprise allotment of 4,141,084 Equity Shares made on 12th April, 2013 by the Company through an Institutional Placement Programme (IPP) under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. The equity dividend outgo for the financial year 2012-13, inclusive of tax on distributed profits would absorb a sum of Rs. 4,155 lakh (as against Rs.3,935 lakh comprising the dividend of Rs.4 per Equity Share paid for the previous year).

operations and Financial overview

During the year, the Company continued to move ahead with its strategy to achieve its growth objectives. The key elements of this strategy are following a ''Member First'' philosophy, achieving a significant increase in choice of destinations and inventory, and complete upgrading of the holiday experience.

Your Company added another 560 units to its inventory during 2012-13 across 13 resorts Â two of which are at international locations. After accounting for inventory retired, the net addition during the year was 431 units Â representing a 21 per cent increase in inventory over the previous year. This was achieved by a combination of greenfield developments and expansion of existing properties, acquisitions and leases. In addition, the Company is currently undertaking five projects: Assanora (Goa), Kanha (Madhya Pradesh), Naldhera (Shimla), second phase at Virajpet (Coorg) and Tungi (Lonavala). These projects will add over 500 units to the Company''s inventory in the next few years. There has been a significant increase in member satisfaction as a result of the initiatives carried out in line with the ''Member First'' philosophy. These are reflected in improved post holiday feedback scores, higher occupancy, substantial increase in unique member holidays and sharp decline in reservation related complaints. Club Mahindra, the Company''s flagship brand in the vacation ownership business, continued to drive the Company''s business during the year. The Company added 17,489 new members to its vacation ownership business, taking the total membership to 160,747 at the end of the year.

In spite of tough macroeconomic situation, the Company performed creditably during the year. Your Company''s total income (including other income) grew at 12 per cent from Rs. 63,658 lakh in 2011-12 to Rs. 71,594 lakh in 2012-13. Profit After Taxes (PAT) increased from Rs.10,464 lakh in 2011-12 to Rs. 10,698 lakh in 2012-13. As a result, diluted Earning Per Share of the Company was Rs. 12.75 in 2012-13, up from Rs.12.46 in the previous year.

Corporate Social Responsibility Initiatives

Your Company continued to carry out initiatives aimed at contributing to the socio-economic well being and development of the communities and the ecosystem that it interacts with. These are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.

Sustainability

In line with the philosophy of the Mahindra Group, your Company is committed to preserve the ecological integrity of environment by following sustainable practices in its operations. The details of the initiatives taken by your Company in this regard are discussed in the section on Sustainability in the Management Discussion and Analysis Report forming part of this Annual Report.

Initial Public Offer (IPO)

During 2009-10, your Company had successfully carried out an Initial Public Offer of 9,265,275 Equity Shares which was oversubscribed by more than nine times. The issue comprised a fresh issue of 5,896,084 Equity Shares of Rs.10 each and offer for sale of 3,369,191 Equity Shares by the Promoters of the Company. The net proceeds to the Company from the issue was Rs.17,688 lakh and the shares were listed on the National Stock Exchange of India Limited and the BSE Limited on 16th July, 2009.

As on 31st March, 2013, the Company has utilised Rs. 16,206 lakh from the IPO proceeds.

Institutional placement programme (Ipp)

During the year under review, your Company had sought and received approval of the Board and the Members to issue Equity Shares to Qualified Institutional Buyers ("QIBs") through an Institutional Placement Programme ("IPP") under Chapter VIII-A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended from time to time, to increase the public shareholding to 25 per cent in order to comply with the minimum public shareholding requirements.

On 7th March, 2013, Mahindra & Mahindra Limited, Promoter of the Company ("Promoter"), had carried out an Offer for Sale (OFS) of 4.02 per cent of share capital by selling 3,400,000 Equity Shares, consequent to which the promoter shareholding had come down to 78.67 per cent from 82.69 per cent.

Subsequent to the end of the year and after considering the OFS made by the Promoter, your Company issued and allotted 4,141,084 Equity Shares of Rs. 10 each at a premium of Rs. 245 per share aggregating to Rs. 10,559 lakh on 12th April, 2013 to QIBs under IPP. Shares issued and allotted were listed on the National Stock Exchange of India Limited and BSE Limited on 17th April, 2013. Accordingly, shareholding of the Promoter has come down from 78.67 per cent to 75 per cent, by which your Company is in compliance with the provisions of the Listing Agreement and Rules specified under Securities Contract (Regulations) Rules, 1957 on minimum public shareholding of 25 per cent.

Corporate Governance Report

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

Management Discussion and Analysis report

A detailed analysis of the Company''s operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Human Resources, Quality and Information Technology is separately discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. This report also discusses in detail, initiatives taken by the Company in the areas of Corporate Social Responsibility and Sustainability.

Stock options

Your Company has formulated the Mahindra Holidays & Resorts India Limited Employees'' Stock Option Scheme 2006 (MHRIL ESOS). The MHRIL ESOS is administered and implemented by Mahindra Holidays & Resorts India Limited Employees Stock Option Trust (the "Trust") in accordance with the directions of the Remuneration Committee and in terms of the Deed of Trust. On the recommendation of the Remuneration Committee, 130,000 new Options were granted out of lapsed option available with the Trust under the MHRIL ESOS during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Directors

Ms. Rama Bijapurkar, resigned from the Board of Directors of the Company with effect from the closure of business hour on 19th October, 2012. The Board has placed on record its appreciation for the valuable contribution made by Ms. Bijapurkar to the Company during her tenure as a Director. Since the close of the year, Mr. Sanjeev Aga has been appointed as an Additional Director with effect from 18th April, 2013 and will hold office upto the date of ensuing Annual General Meeting of the Company.

The Company has received a Notice from a Member signifying his intention to propose Mr. Aga for the office of Director of the Company at the forthcoming Annual General Meeting.

Mr. Uday Y Phadke and Mr. Vineet Nayyar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. As stipulated in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, brief resume of Mr. Phadke and Mr. Nayyar, are provided in the Report on Corporate Governance, which forms part of this Annual Report.

Directors'' responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

During the year under review, Divine Heritage Hotels Private Limited, Gables Promoters Private Limited, Holiday on Hills Resorts Private Limited, MH Boutique Hospitality Limited, Thailand and Infinity Hospitality Group Company Limited, Thailand became subsidiaries of the Company. Accordingly, your Company has eleven subsidiary companies as on 31st March, 2013.

The statement pursuant to Section 212 of the Companies Act, 1956, containing details of the Company''s subsidiaries is attached.

In accordance with the General Circular issued by Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any Shareholder of the Company who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Shareholder at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting.

During the year under review, your Company has subscribed 49 per cent of the share capital of Arabian Dreams Hotel Apartments LLC, UAE, joint venture company.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard AS21 form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and a joint venture company.

Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai retire as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the above auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Public Deposits, Loans and Advances

Your Company has not accepted any deposits from the public or its employees during the year under review. The details of loans or advances which are required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

Conservation of Energy, Technology absorption and Foreign exchange earnings and outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. These initiatives have been discussed in greater detail in the section on Sustainability in the Management Discussion and Analysis report.

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure II to this Report.

Particulars of employees as required under Section 217(2A) of the Companies act, 1956 and Rules made thereunder

The Company had 9 employees who were in receipt of remuneration of not less than Rs.60,00,000 during the year ended 31st March, 2013 or not less than Rs.5,00,000 per month during any part of the said year. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of the statement may write to the Company.

Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company''s customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

A K NANDA

Chairman

Place: Mumbai

Date: 24th April, 2013

Mar 31, 2012

The Directors are pleased to present their Sixteenth Report together with the audited accounts of your Company for the year ended 31st March, 2012.

Financial Results Rs. in lakh 2012 2011

Income:

Income from sale of Vacation Ownership and other services 57,383 48,713

Other Income 6,275 4,703

Total Income 63,658 53,416

Expenditure :

Less: Employee Cost & other expenses (47,037) (36,462)

Profit before Depreciation, Interest and Taxation 16,621 16,954

Less: Depreciation (2,034) (2,010)

Interest (35) (16)

Profit for the year before tax 14,552 14,928

Less: Provision for Tax - Current Tax (4,102) (4,305)

- Deferred tax (net) 14 (347)

Net Profit for the year after tax 10,464 10,276

Balance brought forward from earlier years 22,378 17,046

Balance carried forward 32,842 27,322

Appropriations:

General Reserve (1,046) (1,028)

Proposed Final Dividend on Equity shares (3,386) (3,369)

Income Tax on Proposed Final Dividend (549) (547)

Surplus carried to Balance Sheet 27,861 22,378

Dividend

Your Directors are pleased to recommend a dividend of Rs.4 per Equity Share of the face value of Rs.10 each for the financial year 2011-12. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the Shareholders whose names appear on the register of members of the Company as on the Book Closure Date. The equity dividend outgo for the financial year 2011-12, inclusive of tax on distributed profits would absorb a sum of Rs. 3,935 lakh (as against Rs.3,916 lakh comprising the dividend of Rs.4 per Equity Share paid for the previous year).

Operations and Financial Overview

Club Mahindra, the Company's flagship brand in the vacation ownership business, continued to drive the Company's business during the year. The Company added over 18,000 new members to its vacation ownership business, taking the total membership to 143,258 at the end of the year.

Your Company added significant inventory during the year. This was achieved by a combination of greenfield developments and expansion of existing properties, acquisitions and leases. The Company added 485 units to its room inventory across 10 resorts during the year representing a single year increase of 31%.

Your Company also expanded its land-bank during the year with the acquisition of additional land parcels in Munnar (Kerala) and Kanha (Madhya Pradesh). Including these, Mahindra Holidays now has a land-bank of over 200 acres at ten destinations across eight different states.

During the year, the ongoing investments in technology and redesigning business processes, as well as implementation of TQM principles across the organisation started paying dividends. This has facilitated the implementation of a complete online booking solution for the members, which has significantly increased the functionalities, efficiency and transparency in the holiday booking process and resulted in tangible benefits.

The Company has formalised a strategy to achieve its growth plans. The key elements of this strategy are following a 'Member First' philosophy, achieving a significant increase in choice of destinations and inventory, and complete upgrading of the holiday experience. As this strategy becomes operational, the end-to-end experience of Club Mahindra members will be upgraded to a different level, one of much greater engagement and satisfaction, and offering holistic returns from a long-term investment.

In spite of tough macroeconomic situation, the Company performed creditably during the year. Your Company's total income (including other income) grew at 19 per cent from Rs.53,416 lakh in 2010-11 to Rs.63,658 lakh in 2011-12. Profit After Taxes (PAT) increased from Rs.10,276 lakh in 2010-11 to Rs.10,464 lakh in 2011-12. As a result, diluted EPS of the Company was Rs.12.46 in 2011-12, up from Rs.12.21 in the previous year.

Share Capital

During the year under review, the Company has allotted 4,10,000 equity shares of Rs. 10 each to the Mahindra Holidays & Resorts India Limited Employees' Stock Option Trust. Consequent to that the paid-up equity share capital of the Company stands at Rs. 8464 lakh comprising of 8,46,39,772 equity shares of Rs.10 each fully paid-up.

Capital Expenditure

During the year, the Company added Rs. 2,797 lakh to its gross block, comprising investment in resort properties and Rs.62 lakh for software. The Capital work in progress as on 31st March, 2012, stood at Rs. 18,364 lakh mainly representing resorts under development.

Awards and Recognitions

Your Company's focus on customer delight and commitment to offer great holiday experiences has earned it the following awards and recognitions during the year:

- RCI's prestigious 'Presidents Club Award' for 2011. The award is given to those who excel in transforming the vacation experience.

- 12 RCI Gold Crown Resorts and 1 Silver Crown Resort in India. This evaluation is based on the RCI member comment card ratings and an independent assessment of resort facilities, amenities and service. Only a small percentage of RCI affiliated resorts worldwide achieve this distinction.

- At the Travellers' Choice Awards 2012 by Trip Advisor, Coorg was included in the 'Top 25 All Inclusive Resorts in Asia' and Ashtamudi was included in 'Top 25 Relaxation/Spa Hotels in India'.

- Club Mahindra, the flagship brand of Mahindra Holidays, was awarded the 'Product of the Year 2012' in the 'Holidays & Hospitality' category based on independent consumer survey carried out by Nielsen. 'Product of the Year' has been awarding companies in 28 countries for 25 years and enjoys global success.

- The Company received the prestigious 'CSI 2011 Awards for Excellence in IT' from Computer Society of India (CSI) Ã India's largest industry association for IT.

Corporate Social Responsibility Initiatives

Your Company continued to carry out initiatives aimed at contributing to the socio-economic well being and development of the communities and the ecosystem that it interacts with. These are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.

Sustainability

In line with the philosophy of the Mahindra Group, your Company recognises the importance of sustainability, and is committed to conserve the ecological integrity of its locations through responsible business practices, and by greater accountability and transparency. Your Company actively participated in the Group's journey for Corporate Sustainability Reporting. The 'Sustainability Report' of the Group is prepared in accordance with the internationally accepted framework specified by the Global Reporting Initiative (GRI). Besides this, the Company continued to work in line with the five-year 'Sustainability Roadmap', which lays out the plan of initiatives to be carried out until 2013-14.

The details of the initiatives taken by your Company in this regard are discussed in the section on Sustainability in the Management Discussion and Analysis Report forming part of this Annual Report.

Initial Public Offer (IPO)

During 2009-10, your Company had successfully carried out an Initial Public Offer of 92,65,275 lakh equity shares which was oversubscribed by more than nine times. The issue comprised a fresh issue of 58,96,084 equity shares of Rs.10 each and offer for sale of 33,69,191 equity shares by the Promoters of the Company. The net proceeds to the Company from the issue was Rs.17,688 lakh and the shares were listed on the National Stock Exchange of

India Limited and the Bombay Stock Exchange Limited on 16th July 2009.

As on 31st March 2012, the Company has utilised Rs. 12,624 lakh from the IPO proceeds.

Corporate Governance Report

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

Management Discussion and Analysis Report

A detailed analysis of the Company's operational and financial performance as well as the initiatives taken by the Company in key functional areas such as Human Resources, Quality and Information Technology is separately discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. This report also discusses in detail, initiatives taken by the Company in the areas of Corporate Social Responsibility and Sustainability.

Stock Options

Your Company has formulated the Mahindra Holidays & Resorts India Limited Employees' Stock Option Scheme 2006 (MHRIL ESOS). The MHRIL ESOS is administered and implemented by Mahindra Holidays & Resorts India Limited Employees Stock Option Trust in accordance with the directions of the Remuneration Committee and in terms of the Deed of Trust. On the recommendation of the Remuneration Committee of your Company, 586,500 new Options were granted under the MHRIL ESOS during the year under review.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Directors

Mr. Cyrus Guzder and Mr. A K Nanda, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. As stipulated in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, brief resume of Mr. Cyrus Guzder and Mr. A K Nanda, are provided in the Report on Corporate Governance, which forms part of this Annual Report.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Subsidiary Companies

As on 31st March, 2012, your Company had six subsidiary companies viz., Mahindra Hotels and Residences India Limited, Mahindra Holidays and Resorts USA Inc., MHR Hotel Management GmbH, Heritage Bird (M) Sdn Bhd, BAH Hotelanlagen AG and Bell Tower Resorts Private Limited.

Mahindra Hotels and Residences India Limited was incorporated to carry out the business of hotels and restaurants, including ancillary activities such as interior decoration, recreational facilities and travel agency.

Mahindra Holidays and Resorts USA Inc., was incorporated to carry out the business of resorts, hotels, vacation facilities, leisure activities and related ancillary activities.

MHR Hotel Management GmbH was incorporated to carry out the business of managing hotels.

Heritage Bird (M) Sdn Bhd is a wholly-owned subsidiary of your Company. The principal activity of the company is purchasing, maintaining and leasing resorts.

BAH Hotelanlagen AG is a subsidiary of your Company which was incorporated to carry out the business of hotel, tourism and related activities.

During the year, Bell Tower Resorts Private Limited became a wholly-owned subsidiary of your Company on 21st December, 2011. The principal activity of the company is to carry out the business of building and operating holiday resorts in India and abroad.

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of the Company's subsidiaries is attached. The consolidated financial statements of the Company prepared in accordance with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, form part of the Annual Report and Accounts.

In accordance with the general circular issued by Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any Shareholder of the Company who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Shareholder at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting.

Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai retire as auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect auditors for the current year and fix their remuneration. As required under the provisions of Section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the above auditors proposed to be reappointed to the effect that their re- appointment, if made, would be in conformity with the limits specified in the said section.

Public 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 or advances which are required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. These initiatives have been discussed in greater detail in the sections on Sustainability in the Management Discussion and Analysis report.

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure II to this Report.

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 and Rules made thereunder

The Company had 8 employees who were in receipt of remuneration of not less than Rs.60,00,000 during the year ended 31st March, 2012 or not less than Rs.5,00,000 per month during any part of the said year. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of the statement may write to the Company.

Acknowledgement and Appreciation

Your Directors take this opportunity to thank the Company's customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

Place: Mumbai A. K. NANDA

Date: April 25, 2012 Chairman

Mar 31, 2011

The Directors are pleased to present their Fifteenth Report together with the audited accounts of your Company for the year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS

(Rs. Lakh)

2011 2010

Income:

Income from sale of Vacation Ownership and other services 48,713 46,875

Other Income 4,703 4,762

Total Income 53,416 51,637

Expenditure :

Less: Employee Cost & other expenses (36,218) (31,600)

Profit before Depreciation, Interest and Taxation 17,198 20,037

Less: Depreciation (2,010) (1,910)

Interest (260) (455)

Profit for the year before tax 14,928 17,672

Less: Provision for Ta x Ã Current Tax (4,305) (5,505)

Ã Deferred tax (net) (347) (383)

Net Profit for the year after tax 10,276 11,784

Balance brought forward from earlier years 17,046 10,369

Balance carried forward 27,322 22,153

Appropriations:

General Reserve (1,028) (1,178)

Proposed Final Dividend on Equity shares (3,369) (3,369)

Income Tax on Proposed Final Dividend (547) (560)

Surplus carried to Balance Sheet 22,378 17,046

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.4 per Equity Share of the face value of Rs.10 each for the financial year 2010-11. The dividend, if approved at the ensuing Annual General Meeting, will be paid to the Shareholders whose names appear on the register of members of the Company as on 15th July, 2011. The equity dividend outgo for the financial year 2010-11, inclusive of tax on distributed profits would absorb a sum of Rs. 3,916 lakh (as against Rs.3,929 lakh comprising the dividend of Rs.4 per Equity Share paid for the previous year).

OPERATIONS AND FINANCIAL OVERCIEW

Club Mahindra Holidays, the Companys flagship brand in the vacation ownership business, along with Zest, continued to drive the Companys business during the year. The Company added over 15,000 new members to its vacation ownership business, taking the total membership to 125,169 at the end of the year.

In line with the growth in membership, the Company added inventory across new locations such as Udaipur, Sariska, Osian, Nawalgarh and Swamimalai. In addition, a resort in Innsbruk, Austria, and Kuala Lumpur, Malaysia, were also added to the Companys portfolio of international resorts. Apart from this, the expansion at Coorg became fully operational. At the end of the year, the Company had 35 resorts.

In a significant development, your Company has entered into a Memorandum of Understanding with the Government of Gujarat at the Vibrant Gujarat Summit held in January 2011 to build seven new Club Mahindra Resorts in the State, These properties will be located at Saputhara, Polo Forest, Shivrajpur, Madhavpur, Suvali Beach, Nalsarovar and Jamboghoda, which will add around 600 units and involve an investment of approximately Rs.210 crore.

Apart from growth in members and increase in inventory, the Company introduced innovative and interesting facilities for its customers. During the year, the focus was on developing holiday activities that capture the natural beauty and cultural heritage of the destination. To engage different members of the family, your Company organised lifestyle seminars and beginner classes for activities such as swimming, yoga, aerobics, painting and cooking. Svaastha spas, which provide holistic wellness therapies, were extended to four new resorts Ã Ashtamudi, Goa, Munnar and Kumbhalgarh Ã taking the total to seven resorts.

It has been the stated objective of the Company to expand its holiday offerings across various segments and different holiday experiences so as to progress steadily towards dominance in the holiday market. The Company launched terra Ã a camping and adventure holiday product during the year. Other products of the Company Ã Fundays, Homestays and Travel Ã also performed creditably during the year.

In terms of strategic direction, 2010-11 was a year of operational consolidation for your Company. The Company initiated a number of tough control measures aimed at improving productivity and creating a stronger foundation for future growth. This involved strengthening its customer acquisition process to build a robust customer portfolio, and enhancing customer experience to achieve greater differentiation in the market. Although the process will add significantly to the Companys performance in the coming years, it has impacted the Companys results during the year, especially during the first half. However, the performance picked-up towards the end of the year.

Your Companys total income (including other income) grew at 3.4 per cent from Rs.51,637 lakh in 2009-10 to Rs.53,416 lakh in 2010-11. The growth in income was low due to decrease in income from securitisation during the year. Profit After Taxes (PAT) came down from Rs.11,784 lakh in 2009-10 to Rs.10,276 lakh in 2010-11. As a result, diluted EPS of the Company was Rs.12.21 in 2010-11, down from Rs.14.27 in the previous year.

CAPITAL EXPENDITURE

During the year, the Company added Rs. 5,554 lakhs to its gross block, comprising investment in resort properties and Rs.69 lakhs for product development and software. The Capital work in progress as on 31st March, 2011, stood at Rs. 14,318 lakhs mainly representing resorts under development - Tungi near Lonavla, Virajpet in Coorg and Theog in Shimla.

AWARDS AND RECOGNITIONS

Your Companys focus on customer delight and commitment to offer great holiday experiences has earned it the following awards and recognitions during the year:

Mahindra Holidays won the Bird Express TravelWorld Award for Excellence in Operations. These awards are regarded as one of the most respected awards in the travel and hospitality ndustry in India.

The resorts at Coorg and Goa were formally awarded the prestigious ECOTEL certification. The resort at Coorg was awarded Five Globes, the highest level of certification possible under the ECOTEL rating system. The resort at Goa was awarded Four Globes and aspires to achieve the highest level in the next year.

The resorts at Naukuchiatal, Manali, Thekaddy and Yeracud were awarded the RCI Gold Crown status during the year taking the total number of Gold Crown resorts to 10. The resorts at Goa, Munnar, Coorg, Binsar, Dharamshala and Kumbhalgarh retained their RCI Gold Crown status.

The resort at Kumbhalgarh was adjudged as the top Gold Crown resort at the RCI Champions 2010 award which recognises the contributions made by companies to the vacation ownership business. The Companys employees won awards for excellence in sales, operations and that of the best resort manager at the event.

The resorts at Goa, Munnar, Coorg, Binsar, Manali, Dharamshala, Ooty, Kodaikanal, Puducherry, Thekaddy and Kumbhalgarh continue to retain their Branch Hygiene Code (BHC) certification.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Your Company continued to carry out initiatives aimed at contributing to the socio-economic well being and development of the communities and the ecosystem that it interacts with. These are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.

SUSTAINABILITY

In line with the philosophy of the Mahindra Group, your Company recognises the importance of sustainability, and is committed to conserve the ecological integrity of its locations through responsible business practices, and by greater accountability and transparency. Your Company actively participated in the Groups journey for Corporate Sustainability Reporting. The Sustainability Report of the Group is prepared in accordance with the internationally accepted framework specified by the Global Reporting Initiative (GRI). Besides this, the Company continued to work in line with the five-year Sustainability Roadmap, which lays out the plan of initiatives to be carried out until 2013-14.

The details of the initiatives taken by your Company in this regard are discussed in the section on Sustainability in the Management Discussion and Analysis Report forming part of this Annual Report.

INITIAL PUBLIC OFFER (IPO)

During 2009-10, your Company had successfully carried out an Initial Public Offer of 92.65 lakh equity shares which was oversubscribed by more than nine times. The issue comprised a fresh issue of 58,96,084 equity shares of Rs.10 each and offer for sale of 33,69,191 equity shares by the Promoters of the Company. The net proceeds to the Company from the issue were Rs.17,688 lakhs and the shares were listed on the National Stock Exchange and the Bombay Stock Exchange on 16th July 2009.

As on 31st March 2011, the Company has utilised Rs.11,139 lakhs from the IPO proceeds.

CORPORATE GOVERNANCE REPORT

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Companys operational and financial performance and initiatives taken by the Company in key functional areas such as Human Resources, Quality and Information Technology is separately discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. This report also discusses in detail, initiatives taken by the Company in the areas of Corporate Social Responsibility and Sustainability.

STOCK OPTIONS

Your Company has formulated the Mahindra Holidays & Resorts India Limited Employees Stock Option Scheme 2006 (MHRIL ESOS). The MHRIL ESOS is administered and implemented by Mahindra Holidays & Resorts India Limited Employees Stock Option Trust in accordance with the directions of the Remuneration Committee and in terms of the Deed of Trust. Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

DIRECTORS

Mr. Sridar Iyengar and Mr Rohit Khattar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. As stipulated in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, brief resume of Mr. Sridar Iyengar and Mr. Rohit Khattar, are provided in the report on Corporate Governance, which forms part of this Annual Report.

Mr Ramesh Ramanathan, resigned as the Managing Director and from the Board of the Company with effect from 30th April, 2011 to assume another role within the Mahindra Group. The Board placed on record its deep sense of appreciation for the services rendered by him during his association with the Company and his contribution in building the Company to its current level. Mr. Rajiv Sawhney has been appointed as an Additional Director with effect from 25th April, 2011, and as the Managing Director & CEO of the Company with effect from 1st May, 2011 for a period of five years. He holds office up to the date of the forthcoming Annual General Meeting. The Company has received a Notice from a

Member under section 257 of the Companies Act, 1956, signifying the intention to propose Mr. Sawhney as candidate for the office of Director.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217 (2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

SUBSIDIARY COMPANIES

As on 31st March, 2011, your Company had five subsidiary companies viz., Mahindra Hotels and Residences India Limited, Mahindra Holidays and Resorts USA Inc., MHR Hotel Management GmbH, Heritage Bird (M) Sdn Bhd and BAH Hotelanlagen AG.

Mahindra Hotels and Residences India Limited was incorporated on 26th April, 2007 to carry out the business of hotels and restaurants, including ancillary activities such as interior decoration, recreational facilities and travel agency.

Mahindra Holidays and Resorts USA Inc., was incorporated in the State of Delaware, USA, on 24th October, 2003 to carry out the business of resorts, hotels, vacation facilities, leisure activities and related ancillary activities.

MHR Hotel Management GmbH was incorporated on 16th February, 2007 under the laws of Austria and became a subsidiary of your Company on 12th March, 2007. The Company was formed to carry out the business of managing hotels.

Heritage Bird (M) Sdn Bhd was incorporated on 7th July, 2007 under the laws of Malaysia and became a wholly-owned subsidiary of your Company on 3rd March, 2008. The principal activity of the company is purchasing, maintaining and leasing resorts.

BAH Hotelanlagen AG was incorporated on 14th December, 2006 under the law of Austria and became a subsidiary of your Company on 11th January, 2010. The company was incorporated to carry out the business of hotel, tourism and related activities.

The statement pursuant to section 212 of the Companies Act, 1956 containing details of the Companys subsidiaries is attached. The consolidated financial statements of the Company prepared in accordance with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, form part of the Annual Report and Accounts.

In accordance with the general circular issued by Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any Shareholder of the Company and the concerned subsidiary company who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any Shareholder at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours upto the date of the Annual General Meeting.

AUDITORS

Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai, retire as auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect auditors for the current year and fix their remuneration. As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the above auditors proposed to be reappointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

PUBLIC DEPOSITs, LOANS AND ADVANCES

The Company has not accepted any deposits from the public or its employees during the year under review. Your Company has also not made any loans or advances which are required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement.

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

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations. These initiatives have been discussed in greater detail in the sections on Sustainability in the Management Discussion and Analysis report.

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure II to this Report.

PARTICULRAS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND RULES MADE THERE UNDER

The Company had 12 employees who were in receipt of remuneration of not less than Rs.60,00,000 during the year ended 31st March, 2011 or not less than Rs.5,00,000 per month during any part of the said year. However, as per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of the statement may write to the Company.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors take this opportunity to thank the Companys customers, shareholders, suppliers, bankers, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the board

Place: Mumbai A K NANDA

Date: 25th April, 2011 Chairman

Mar 31, 2010

The Directors are pleased to present their Fourteenth Report together with the audited accounts of your Company for the year ended 31st March, 2010.

Financial Highlights (Rs. Lakhs) 2010 2009 INCOME Income from Vacation Ownership 40,031 34,277 Other Income 7,300 5,295 Interest Income 4,306 4,859 Total Income 51,637 44,431 Expenditure Less: Employee Cost & other expenses (31,600) (28,869) Proft before Depreciation, Interest and Taxation 20,037 15,562 Less: Depreciation (1,910) (1,669) Interest (455) (703) Proft for the year before tax 17,672 13,190 Less: Provision for Tax Ã Current Tax (5,505) (3,905) Ã Deferred tax (net) (383) (589) Ã Fringe Beneft tax - (355) Net Proft for the year after tax 11,784 8,341 Balance brought forward from earlier years 10,369 5,612 Balance carried forward 22,153 13,953 APPROPRIATIONS General Reserve (1,178) (834) Proposed Final Dividend on Equity Shares (3,369) (2,351) Income Tax on Proposed Final Dividend (560) (399) Surplus carried to Balance Sheet 17,046 10,369

Dividend

Your Directors are pleased to recommend a dividend of Rs. 4 per Equity Share of the face value of Rs.10 each for the fnancial year 2009-10. The dividend, if approved at the ensuing Annual General Meeting, will be paid to Shareholders whose names appear on the register of members of the Company as on 16th July, 2010. The equity dividend outgo for the fnancial year 2009-10, inclusive of tax on distributed profts would absorb a sum of Rs. 3,929 lakhs (as against Rs. 2,750 lakhs comprising the dividend of Rs. 3 per Equity Share paid for the previous year).

Operations and Financial Overview

Club Mahindra Holidays, the CompanyÃs fagship brand in the vacation ownership business, along with Zest, continued to drive the CompanyÃs business during the year. The Company ended the year with a cumulative member base of 1,09,884 members resulting in a growth of 18.4% over the previous year. The Company added 24,389 members on a gross basis this year. During the year, Club Mahindra Holidays, the CompanyÃs fagship brand was selected as a Consumer Superbrand by the Brand Council of India.

In line with the growth in membership, the Company added inventory across multiple locations taking the total inventory of apartments available to 1,476 as on 31st March, 2010. The network of resorts was expanded with new locations such as Gangtok, Corbett and Mashobra. The year also marked the CompanyÃs entry into jungle tourism with Memorandum of Understandings (MOUs) signed for resorts in Gujarat and Madhya Pradesh. In addition, the Company expanded its existing properties at Coorg, Binsar and Ashtamudi and also added a second smaller resort in Goa. In line with its commitment to offer varied experiences to its customers, the Company set up log huts in Binsar and foating cottages at Ashtamudi.

Apart from growth in members and increase in its offerings of resorts, the Company introduced innovative and interesting facilities for its customers. These included the launch of Svaastha spa at Coorg, Puducherry and Kumbalgarh. Svaastha offers holistic wellness therapies for its members. The Company also introduced a ÃGourmet expressÃ option in its dining programme in some of its resorts.

It has been the stated objective of the Company to expand its holiday offerings across various segments and different holiday experiences so as to progress steadily towards dominance in the Holiday market. Mahindra Homestays, a novel and innovative concept of holidays in homes across the country was launched in India in April 2009. Mahindra Homestays now offers a choice of 240 homes across 15 locations in the country. Various State Governments are appreciating the initiative taken by the Company in promoting sustainable tourism and have entered into an MOU to promote homestays. Rajasthan and Uttarakhand were two State Governments which signed MOUs with the Company during the year.

The travel services business of the Company performed well and also expanded its operations during the year.

During the second half of the year, the market witnessed positive trends in domestic tourism. This adequately refects in the growth of the CompanyÃs cumulative members. As

the economy stabilises and continues to pick up pace, your Company expects growth in the size of the market and also in the emergence of new segments thereby providing the Company with an opportunity to launch different products meeting the requirement of these segments.

Your CompanyÃs total income grew by 16.2 per cent from Rs. 44,431 lakhs in 2008-09 to Rs. 51,637 lakhs in 2009-10. Proft before taxes (PBT) grew by 34 per cent from Rs. 13,190 lakhs in 2008-09 to Rs. 17,672 lakhs in 2009-10 and proft after taxes (PAT) grew by 41.3 per cent from Rs. 8,341 lakhs in 2008-09 to Rs. 11,784 lakhs in 2009-10. Diluted Earnings per Share (EPS) of the Company increased by 34 per cent from Rs.10.65 in 2008-09 to Rs.14.27 in 2009-10.

Capital Expenditure

During the year, the Company added Rs. 6,896 lakhs to its gross block, comprising investment in resort properties and Rs. 47 lakhs for product development and software. The Capital work in progress as on 31st March, 2010, stood at Rs. 9,787 lakhs mainly representing resorts under development Ã Tungi near Lonavla, Theog near Shimla and Virajpet in Coorg.

Awards and Recognitions

Your CompanyÃs focus on customer delight and commitment to offer great holiday experiences has earned it the following awards and recognitions during the year:

Ã The CompanyÃs resorts at Goa, Munnar, Coorg, Binsar, Dharamshala and Kumbalgarh retained their RCI Gold Crown status. Goa received a special Ã10 Year RCI Gold Crown AwardÃ as it retained the Gold Crown for a period of ten consecutive years. Munnar which received the 10 year Gold Crown Award in the previous year, continues to retain its Gold Crown status.

Ã The CompanyÃs resorts at Thekkady and Yercaud got affliated to RCI.

Ã The CompanyÃs resorts at Goa and Coorg have been awarded the prestigious ECOTEL Certifcation.

Ã The CompanyÃs Resorts at Thekaddy and Kumbalgarh received Branch Hygiene Code (BHC) certifcation while the resorts at Goa, Munnar, Coorg, Binsar, Manali, Dharamshala, Ooty and Kodaikanal continue to retain their BHC certifcation.

Ã The CompanyÃs Resort at Puducherry received the Food Hygiene Certifcation of International Standard from ÃBranch Hygiene CodeÃ of Netherlands.

Ã Wanderlust, a highly regarded global travel publication in United Kingdom (UK), accorded Mahindra Homestays with the Wanderlust Eureka Award (UK) for Travel Innovation. Mahindra Homestays was listed as one of the top 100 hotel experiences by Sunday Times Travels, UK.

Corporate Social Responsibility Initiatives

In line with its commitment of contributing towards Corporate Social Responsibility initiatives on a yearly basis, your Company has made signifcant fnancial contributions during the year under review towards the socio-economic well being and development of the communities and the ecosystem that it interacts with. These initiatives are primarily carried out at your CompanyÃs Resort locations with focus on Education, Environment and Health.

More details on the initiatives taken by your Company in this regard are discussed in the Management Discussion and Analysis Report forming part of this Annual Report.

Sustainability

Sustainability initiatives took a quantum leap during the year with a lot of involvement from employees and the community. A fve year strategy map was formulated and the same was reviewed regularly. Through focused and continuous dissemination, the vast majority of employees were made aware of these initiatives enabling high participation. Your Company is happy to report that for the second year in succession, your Company was certifed under the Global Reporting Initiatives (GRI) (as part of the Mahindra Group), as assured by Ernst & Young. The frst pilot assessment of Social Return on Investment (SROI) was completed. Through this, your Company has a framework and mechanism to evaluate and measure the effcacy of several sustainability and community development initiatives.

Initial Public Offer (IPO) and Changes in Share Capital

To further augment the capital base for future growth plans, your Company made an Initial Public Offering of 92,65,275 shares of the face value of Rs. 10 each during the year. This issue, which constitutes approximately 11 per cent of the fully diluted post issue paid- up share capital of your Company, comprised a fresh issue of 58,96,084 equity shares of Rs.10 each and offer for sale of 33,69,191 equity shares by the Promoters of the Company viz. Mahindra & Mahindra Limited. Consequent to allotment of the above fresh equity shares, the number of issued and subscribed equity shares increased from 7,83,33,688 to 8,42,29,772, increasing the paid up share capital of the Company from Rs. 7,833.37 lakhs to Rs. 8,422.98 lakhs as on 31st March, 2010.

The issue which was priced at Rs. 300 per share, received an overwhelming response and was oversubscribed by over 9 times. The shares were allotted on 8th July, 2009 and were listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited on 16th July, 2009. The listing of shares has enhanced your CompanyÃs brand name and visibility in the marketplace.

During 2009-10, the Company utilised Rs. 6,761.75 lakhs from the IPO proceeds.

Corporate Governance Report

A Report on Corporate Governance along with a Certifcate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

Management Discussion and Analysis Report

A detailed analysis of the CompanyÃs operational and fnancial performance and initiatives taken by the Company in key functional areas such as Human Resources and Information Technology is separately discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. This report also discusses in detail, initiatives taken by the Company in the area of Corporate Social Responsibility and Sustainability.

Stock Options

Your Company has formulated the Mahindra Holidays & Resorts India Limited EmployeesÃ Stock Option Scheme 2006 (MHRIL ESOS). The MHRIL ESOS is administered and implemented by Mahindra Holidays & Resorts India Limited Employees Stock Option Trust in accordance with the directions of the Remuneration Committee and in terms of the Deed of Trust. Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

Directors

Mr. Vineet Nayyar and Mrs. Rama Bijapurkar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. As stipulated in terms of Clause 49 of the Listing Agreement with the stock exchanges, brief resume of Mr. Vineet Nayyar and Mrs. Rama Bijapurkar, is provided in the report on Corporate Governance, which forms part of this Annual Report.

DirectorsÃ Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management, and after due enquiry, confrm that:

i) in the preparation of the annual accounts, the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us, have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the proft of the Company for the year ended on that date;

iii) proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Annual Accounts have been prepared on a going concern basis.

Subsidiary Companies

As on 31st March, 2010, your Company had fve subsidiary companies: Mahindra Hotels and Residences India Limited, Mahindra Holidays and Resorts USA Inc., MHR Hotel Management GmbH, Heritage Bird (M) Sdn Bhd and BAH Hotelanlagen AG.

Mahindra Hotels and Residences India Limited was incorporated on 26th April, 2007 to carry out the business of hotels and restaurants, including ancillary activities such as interior decoration, recreational facilities and travel agency.

Mahindra Holidays and Resorts USA Inc., was incorporated in the State of Delaware, USA, on 24th October, 2003 to carry out the business of resorts, hotels, vacation facilities, leisure activities and related ancillary activities.

MHR Hotel Management GmbH was incorporated on 16th February, 2007 under the laws of Austria and became a subsidiary of your Company on 12th March, 2007. The Company was formed to carry out the business of managing hotels.

Heritage Bird (M) Sdn Bhd was incorporated on 7th July, 2007 under the laws of Malaysia and became a wholly-owned subsidiary of your Company on 3rd March, 2008. The principal activity of the company is purchasing, maintaining and leasing resorts.

During the year, BAH Hotelanlagen AG became a subsidiary of your Company on 11th January 2010. The company was incorporated in Austria to carry out the business of hotels, tourism and related activities.

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of the CompanyÃs subsidiaries is attached.

Your Company had made an application to the Central Government and had obtained exemption from attaching the accounts of its subsidiary companies with this Annual Report. In terms of the approval granted by the Central Government, a copy of the Balance Sheet, Proft & Loss Account, Reports of the Board of Directors and Auditors of the subsidiaries have not been attached to the Balance Sheet of the Company. These documents are however, available on the CompanyÃs website and shall also be submitted on request to any member, desiring to have a copy, on receipt of request by the Company Secretary, at the Registered Offce of the Company.

Auditors

Messrs. Deloitte Haskins & Sells, Chartered Accountants, retire as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to elect Auditors for the current year and fx their remuneration. As required under the provisions of Section 224(1B) of the Companies Act, 1956, the Company has obtained a written certifcate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specifed in the said section.

Public Deposits, Loans and Advances

The Company has not accepted any deposits from the public or its employees during the year under review. Your Company has also not made any loans or advances which is required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more effcient operations. These initiatives have been discussed in greater detail in the sections on Sustainability Initiatives and Information Technology in the Management Discussion and Analysis report.

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act,

1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure 2 to this Report.

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 and Rules made thereunder

The Company had 44 employees who were in receipt of remuneration of not less than Rs. 24,00,000 during the year ended 31st March, 2010 or not less than Rs. 2,00,000 per month during any part of the said year. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the DirectorsÃ Report and Accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary. None of the employees of the Company are related to the Directors of the Company.

Acknowledgement and Appreciation

Your Directors take this opportunity to thank the CompanyÃs customers, shareholders, suppliers, bankers, fnancial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board

A K NANDA Chairman Place: Mumbai Date: 29th April, 2010

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