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