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Directors Report of Mahindra Holidays & Resorts India Ltd.

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.à.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.à.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-aikakiinteistöt Oy, Kiinteistö Oy Himos Gardens, Kiinteistö Oy Himoksen Tähti 2 Oy, Kiinteistö

Oy Tunturinrivi, Kiinteistö Oy Vanha Ykköstii, Kiinteistö Oy Katinnurkka, Kiinteistö Oy Tenetinlahti, Kiinteistö Oy Mällösniemi, Kiinteistö Oy Rauhan Ranta 1, Kiinteistö Oy Rauhan Ranta 2, Kiinteistö Oy Tiurunniemi, Saimaa Gardens Arena Oy (associate company till January 18, 2016), Kiinteistö Oy Rauhan Liikekiinteistöt 1, Supermarket Capri Oy, Kiinteistö Oy Kylpyläntorni 1, Kiinteistö Oy Spa Lofts 2, Kiinteistö Oy Spa Lofts 3, Kiinteistö Oy Kulennoinen, Kiinteistö Oy Kuusamon Pulkkajärvi 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, Kiinteistö Oy Jalomella, Kiinteistö Oy Outapalas, Kiinteistö Oy Ulkuvuoma, Kiinteistö Oy Lappeenrannan Saimaan Kreivi, Sallan Tunturipalvelut Oy, Kiinteistö Oy Katinkullan Villas Parkki, Holiday Club Golf Saimaa Oy, Saimaa Action Park Oy, Kiinteistö Oy Kulennoinen, Kongressi- ja Kylpylähotelli Caribia Oy, Saariselkä Resort Oy, Himos Hillside Golf Oy, Kiinteistö Oy Pisterinniementie 2, Holiday Club Katinkullan Villas Oy, Kiinteistö Oy Katinpalsta, Kiinteistö Oy Rauhan Ranta 6, Kiinteistö Oy Rauhan Parkki, Saimaan Palvelukiinteistöt Oy, Kiinteistö Oy Paviljongin Pysäköinti and Kiinteistö Oy Hakan Perusyhtiö 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.à.r.l, Luxembourg.

Covington S.à.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, Kiinteistö Oy Seniori-Saimaa, Saimaa Adventures Oy and Kiinteistö Oy Sallan Kylpylä, 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 — 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 — two of which are at international locations. After accounting for inventory retired, the net addition during the year was 431 units — 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) — 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 – Current Tax (4,305) (5,505)

– 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 — Ashtamudi, Goa, Munnar and Kumbhalgarh — 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 — a camping and adventure holiday product during the year. Other products of the Company — Fundays, Homestays and Travel — 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 – Current Tax (5,505) (3,905) – Deferred tax (net) (383) (589) – 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 Company’s fagship brand in the vacation ownership business, along with Zest, continued to drive the Company’s 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 Company’s 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 Company’s 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 “Gourmet express” 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 Company’s 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 Company’s 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 – Tungi near Lonavla, Theog near Shimla and Virajpet in Coorg.

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:

• The Company’s resorts at Goa, Munnar, Coorg, Binsar, Dharamshala and Kumbalgarh retained their RCI Gold Crown status. Goa received a special “10 Year RCI Gold Crown Award” 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.

• The Company’s resorts at Thekkady and Yercaud got affliated to RCI.

• The Company’s resorts at Goa and Coorg have been awarded the prestigious ECOTEL Certifcation.

• The Company’s 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.

• The Company’s Resort at Puducherry received the Food Hygiene Certifcation of International Standard from “Branch Hygiene Code” of Netherlands.

• 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 Company’s 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 Company’s 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 Company’s 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 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. 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.

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, 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 Company’s 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 Company’s 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 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 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 Company’s 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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