1) We have audited the attached Balance Sheet of Mahindra Holidays &
 Resorts India Limited as at March 31, 2012, the Statement of Profit and
 Loss and the Cash Flow Statement of the Company for the year ended on
 that date, both annexed thereto.  These financial statements are the
 responsibility of the Company''s Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2) We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the Management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3) As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4) Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (a) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Statement of Profit and Loss, and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Statement of Profit and
 Loss, and the Cash Flow Statement dealt with by this report are in
 compliance with the Accounting Standards referred to in Section 211(3C)
 of the Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 Directors as on March 31, 2012 taken on record by the Board of
 Directors, none of the Directors is disqualified as on 31st March, 2012
 from being appointed as a director in terms of Section 274(1) (g) of
 the Companies Act, 1956.
 
 Annexure referred to in paragraph 3 of the auditors'' report to the
 members of Mahindra Holidays & Resorts India Limited on the accounts
 for the year ended March 31, 2012
 
 (i) Having regard to the nature of Company''s business / activities /
 result, clauses (v), (vi), (viii), (x), (xii) to (xvi), (xviii) and
 (xxi) of CARO are not applicable to the Company in the current year.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory and fixed assets and the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (vi) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (vii) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income-tax, Sales Tax, VAT, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty, Cess and other material
 statutory dues applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Provident
 Fund, Investor Education and Protection Fund, Employees'' State
 Insurance, Income-tax, Sales Tax, VAT, Wealth Tax, Service Tax, Custom
 Duty, Excise Duty, Cess and other material statutory dues in arrears as
 at March 31, 2012 for a period of more than six months from the date
 they became payable.
 
 (c) As on March 31, 2012, there are no dues of Income-tax, Sales Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have
 not been deposited on account of disputes except the following :
 
 Name of the 
 statute        Nature of 
                the dues      Financial 
                              Years      Amount (Rs.)     Forum where 
                                                          the dispute
                                                          is pending
 
 Income Tax     Income Tax &    2005-06  1,312,279,665    Income Tax 
                                                          Appellate
                Fringe Benefit
                Tax             to 
                                2007-08                   Tribunal
 
 Income Tax     Income Tax &    2008-09    651,080,890    Commissioner 
                                                          of Income 
                Fringe Benefit 
                Tax                                       Tax - Appeals
 
 (viii) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short term basis have not been used during
 the year for long term investment.
 
 (ix) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by or on the Company has been
 noticed or reported during the year.
 
 
                                         For DELOITTE HASKINS & SELLS 
 
                                                Chartered Accountants 
 
                                             (Registration No.008072S)
 
                                                        B. Ramaratnam
 
                                                              Partner
 
 Mumbai, April 25, 2012                          (Membership No.21209)