Notes to Accounts of Mahindra Holidays & Resorts India Ltd.

Mar 31, 2025

(xiii) Provisions and contingent liabilities

Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will
be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present
value of those cash flows.

Contingent liability

Contingent liability is a possible obligation arising from
past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or

more uncertain future events not wholly within the
control of the entity or a present obligation that arises
from past events but is not recognized because it is
not probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation or the amount of the obligation cannot
be measured with sufficient reliability. The Company
does not recognize a contingent liability but discloses
its existence in the standalone financial statements.

(xiv) Financial instruments

Trade receivables are initially recognised when they
originate. All other financial assets and financial
liabilities are initially recognised when the Group
becomes a party to the contractual provisions of
the instrument.

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit
or loss are recognized immediately in standalone
statement of profit and loss.

All financial assets are recognized initially at fair value,
plus in the case of financial assets not recorded at
fair value through the statement of profit and loss
(FVTPL), transaction costs that are attributable to
the acquisition of the financial asset. However, trade
receivables that do not contain a significant financing
component are measured at transaction price.

Interest income from other financial assets is
recognised when it is probable that the economic
benefits will flow to the Company and the amount
of income can be measured reliably. Interest income
is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to that asset''s net carrying
amount on initial recognition.

Dividend income from investments is recognized
when the shareholder''s right to receive payment has
been established, provided that it is probable that the
economic benefits will flow to the Company and the
amount of income can be measured reliably.

Effective interest method

The effective interest method is a method of calculating
the amortized cost of a financial instrument and of
allocating interest over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts/payments (including all fees and
points paid or received that form an integral part of
the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the
instrument, or, where appropriate, a shorter period, to
the net carrying amount on initial recognition.

(xv) Financial assets

Equity instruments at FVTPL are measured at fair value
at the end of each reporting period, with any gains or
losses arising on re-measurement recognized in profit
or loss. The net gain or loss recognized in statement
of profit and loss incorporates any dividend earned
on the financial asset and is included under ''Other
income''.

Investments in equity instruments of subsidiaries, joint
venture and associates are measured at cost.

Impairment of financial assets

The Company measures the loss allowance for a
financial instrument at an amount equal to the lifetime
expected credit losses considering the nature of
industry and the deferred payment schemes operated.

Derecognition of financial assets

The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of
ownership of the asset to another party or when the
Company neither transfers nor retains substantially
all of the risks and rewards of ownership and it
does not retain control of the financial asset. The
Company derecognises a financial asset when the
contractual rights to the cash flows from the asset
expire , or when it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to the another party . If the Company
neither transfers nor retains substantially all the
risks and rewards of ownership and continues
to control the transferred asset, the Company
recognises its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the Company retains substantially all the risks
and rewards of ownership of a transferred financial
asset, the Company continues to recognise the

financial asset and also recognizes a collateralized
borrowing for the proceeds received.

On derecognition of a financial asset in its entirety,
the difference between the asset''s carrying amount
and the sum of the consideration received and
receivable and the cumulative gain or loss that had
been recognized in other comprehensive income
and accumulated in equity is recognized in statement
of profit and loss if such gain or loss would have
otherwise been recognized in the statement of profit
and loss on disposal of that financial asset.

Foreign exchange gains and losses on financial
assets

The fair value of financial assets denominated in
a foreign currency is determined in that foreign
currency and translated at the spot rate at the end of
each reporting period.

For foreign currency denominated financial assets
measured at amortised cost and FVTPL, the exchange
differences are recognized in statement of profit
and loss.

Changes in the carrying amount of investments in
equity instruments at FVTOCI relating to changes in
foreign currency rates are recognized in the standalone
statement of the other comprehensive income.

(xvi) Financial liabilities and equity instruments
Classification as debt or equity

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.

Equity instruments

Repurchase of the Company''s own equity instruments
is recognized and deducted directly in equity. No gain
or loss is recognized in statement of profit and loss
on the purchase, sale, issue or cancellation of the
Company''s own equity instruments.

Financial liabilities

All financial liabilities are subsequently measured at
amortised cost using the effective interest method or
at FVTPL.

However, financial liabilities that arise when a transfer
of a financial asset does not qualify for derecognition
or when the continuing involvement approach applies,

financial guarantee contracts issued by the Company,
and commitments issued by the Company to provide
a loan at below-market interest rate are measured in
accordance with the specific accounting policies set
out below.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the
financial liability is either contingent consideration
recognized by the Company as an acquirer in a
business combination to which Ind AS 103 applies or
is held for trading or it is designated as at FVTPL.

Financial liabilities subsequently measured at
amortised cost

Financial liabilities that are not held-for-trading and
are not designated as at FVTPL are measured at
amortised cost at the end of subsequent accounting
periods. The carrying amounts of financial liabilities
that are subsequently measured at amortised cost are
determined based on the effective interest method.
Interest expense that is not capitalized as part of costs
of an asset is included under ''Finance costs''.

Financial guarantee contracts

A financial guarantee contract is a contract that
requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a
specified debtor fails to make payments when due in
accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company
are initially measured at their fair values and, if not
designated as at FVTPL, are subsequently measured
at the higher of:

- t he amount of loss allowance determined in
accordance with impairment requirements of
Ind AS 109; and

- the amount initially recognized less, when
appropriate, the cumulative amount of
income recognized.

Foreign exchange gains and losses on financial
liabilities

For financial liabilities that are denominated in a foreign
currency and are measured at amortised cost at the
end of each reporting period, the foreign exchange
gains are determined based on the amortised cost of
the instruments and are recognized in "Other income"
and losses are recognised in "Finance Cost" to the
extent it is related to borrowings.

The fair value of financial liabilities denominated
in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end
of the reporting period. For financial liabilities that
are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses
and is recognized in standalone statement of profit
and loss.

(xvii) Cash flow statements

Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from
the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash
and which are subject to insignificant risk of changes
in value.

Cash flows from operating activities are reported
using the indirect method, whereby profit before
tax is adjusted for the effects of transactions of non¬
cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flow
from operating, investing and financing activities
of the Company are segregated based on the
available information.

(xviii) Earnings per share

Basic earnings per share is computed by dividing the
profit after tax by the weighted average number of
equity shares outstanding during the year. Diluted
earnings per share is computed by dividing the
profit / (loss) after tax as adjusted for dividend, interest
and other charges to expense or income relating to
the dilutive potential equity shares, by the weighted
average number of equity shares considered for
deriving basic earnings per share and the weighted
average number of equity shares which could have
been issued on the conversion of all dilutive potential
equity shares. Potential equity shares are deemed
to be dilutive only if their conversion to equity
shares would decrease the net profit per share from
continuing ordinary operations. Potential dilutive
equity shares are deemed to be converted as at the
beginning of the period, unless they have been issued
at a later date. Dilutive potential equity shares are
determined independently for each period presented.
The number of equity shares and potentially dilutive
equity shares are adjusted for share splits / reverse
share splits and bonus shares, as appropriate.

(xix) Operating cycle

Based on the nature of services / activities of the
Company and the normal time between acquisition
of assets and their realization in cash or cash
equivalents, the Company has determined its
operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current
and non-current.

2(b) Critical accounting judgements and key
sources of estimation uncertainty

In the application of the Company''s accounting
policies, which are described above, the management
is required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions
are based on historical experience and other factors
that are considered to be relevant. Actual results may
differ from these estimates.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the
estimate is revised if the revision affects only the
period of the revision and future periods if the revision
affects both current and future periods.

The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year are discussed below :

a. Share based payments

The entity initially measures the cost of equity
settled transactions with employees using the
Black Scholes model to determine the fair value of
the options granted. Estimating the fair value of
the share options granted require determination
of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant.
This estimate also requires determination of the most
appropriate inputs to the valuation model including
the expected life of the share option, volatility and
dividend yield and making assumptions about them.
The assumptions and models used for estimating the
fair value for the share based payment transactions
are disclosed in Note no. 24.

b. Defined benefit plans (gratuity)

The cost of the defined benefit gratuity plan and
the present value of the gratuity obligation are
determined using actuarial valuations. An actuarial
valuation involves making assumptions that may
differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases and mortality rates. Due
to the complexities involved in the valuation and
its long term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
Further details about the gratuity obligation are
disclosed in Note no. 44.

c. Customer unexercised rights

The Company considers the expected Customers
unexercised rights, while determining the effective
membership period over which the membership fee
needs to be recognised. This customer unexercised
right is computed based on past trend of utilisation of
membership by the customer.

d. Fair valuation of Freehold land

Freehold land is measured at Fair value based on
valuations by external independent valuers using the
market approach at sufficient intervals between 3-5
years to ensure that the carrying amount does not
differ materially from that which would be determined
using fair value at the end of the reporting period.

e. Intangible assets under development

The Company capitalizes intangibles under
development in accordance with the accounting
policy. Initial capitalization of costs is based on
management''s judgement that technological and
economic feasibility is confirmed.

f. Estimation towards revenue deferred due to
uncertainty of collection

The quantum of revenue deferred due to uncertainty
of collection is computed based on past trends

of year-wise cancellation of memberships and
considering factors impacting future collections.

g. Litigation for taxation matters

The Company is subject to tax litigation, the outcome
of which is subject to many uncertainties inherent in
litigation such as interpretation of legislation, outcome
of appeals etc. Litigation provisions are reviewed at
each accounting period and revisions made for the
change in facts and circumstances.

h. Significant financing component

Given the nature of vacation ownership business, the
Company has determined that membership fee does
not include a significant financing component. Where
the payment is received in instalments, the Company
charges appropriate interest to the members.

i. Leases

The Company makes an assessment on the expected
lease term on a lease-by lease basis as per the
contract period. Further, discount rate is based on the
incremental borrowing rate of the company at the
time of commencement of lease.

3 Recent pronouncements:

Ministry of Corporate Affairs (“MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. As at March
31, 2025, MCA has notified Ind AS - 117 Insurance
Contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, applicable
to the Company w.e.f. April 01, 2025. The Company
has reviewed the new pronouncements and based on
its evaluation has determined that it does not have any
significant impact in its financial statements.

24 f) Equity shares movement during the 5 years preceding the balance sheet date:-

Equity shares movement during the 5 years preceding the Balance Sheet date:- Equity shares issued as bonus, for
consideration without cash : The Company after obtaining approval of shareholder''s allotted 66,816,892 equity shares as fully
paid up bonus shares in the proportion of 1:2, i.e. 1(one) bonus equity share of 10/- each for 2(two) fully paid up equity shares
on September 13, 2021.

24 g) i) Under the Employee Stock Option Scheme ("ESOS 2006") equity shares are allotted to the ESOP Trust set up by the
Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the
scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme ("ESOS 2014"), under which the Company has the option
to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent
allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the
scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The Company formulated the Employee Stock Option Scheme ("ESOS 2020"), under which the Company has the
option to issue and allot the shares directly to the eligible employees/directors as per the recommendation of the
remuneration committee.

The Company has challenged the above demands before various appellate authorities / High Court, the outcome of which

is pending.

* For matters pertaining to timing differences, if liability were to crystallise, there would be future tax benefits, except to the extent of
tax rate differences and interest, if any which currently is not determinable.

Notes:

1) The above amounts are based on demands raised, which the Company is contesting with the concerned authorities.
Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and
the Company''s rights for future appeals. No reimbursements are expected.

2) The Company had received show cause notices from service tax authorities of '' 21,991.33 Lakhs. The detailed reply to
the SCN and rectification application were submitted by the Company in prior financial years in response to the Order in
Original from the Principal Commissioner of CGST and Central Exercise. The Principal Commissioner confirmed the demand
amounting to '' 43,105.47 Lakhs including interest and penalty and the same has been disclosed as Contingent liability in
above table. As the Principal Commissioner rejected rectification application without giving any opportunity for personal
hearing, the Company filed Writ Application before Madras High Court and Madras High Court on March 08, 2023 accepted
the Company''s request to provide an opportunity for hearing and set aside the Order passed by Principal Commissioner.
On March 29, 2023, the Principal Commissioner reaffirmed the Original Order dated February 07 2022 and rejected the
Company''s rectification application. The Company has filed a Writ Application before the Madras High Court against the
said Order of Principal Commissioner.

3) The Company has accounted for service tax receivable of '' 712.16 Lakhs (Previous year '' 826.68 Lakhs) in relation to the
service tax paid on ASF and Membership fee invoices for contracts which have been cancelled post GST implementation.
The Company has received an unfavourable order against the refund claim and has filed an appeal against the order.
Commissioner of GST and Central Excise (Appeals) has allowed the appeal and remanded back the matter to lower authorities
for verification of documents.

(f) Other matters under appeal (Property related)

(i) The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 03,
2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on
the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed
an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the
Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner
of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the
Company and cancelled the assignment of land underlying the Munnar Resort (Total Purchase Value '' 605.12
Lakhs) and further directed repossession of land on the ground that it is agricultural land and cannot be used
for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the
said Order. The writ Petition has been disposed of by an Order dated May 21, 2019. Against the said Order,
the company has filed a Writ Appeal and by an order dated June 19, 2019, the Court granted an interim stay
of all further proceedings. The Writ Appeal has been dismissed by a Judgement dated May 25, 2022. The
Company has filed Review Petition before the Kerala High Court. The same is pending.

Note No. 43 - Contingent liabilities and commitments (Contd.)

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil
Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the
Company''s resort property at Lonavala, Maharashtra and obtained an interim stay. In another development,
notwithstanding these proceedings, the neighbouring property owner obtained an order from the local
Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained
a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property
owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the
Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said
neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the
Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter
alia, seeking declaration that the proceedings and Orders in respect of cancellation of the Non-Agricultural
status of the land underlying the resort property at Lonavala (Total Purchase Value '' 1,545.01 Lakhs) are not
enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra
and the Collector, Pune not to give effect to the Orders of Non-Agricultural cancellation and the matter
is pending for further hearing.

(g) Other matters

The Company engaged a building contractor for construction of a resort. As the construction did not proceed
as per agreed timelines the Company terminated the contract. The contractor has claimed '' 1,256.15 Lakhs as
damages for termination of the Contract. The Company has made a counter claim of '' 2,003.56 Lakhs towards
liquidated damages and other losses.

By an Award dated September 11, 2023 (“Award"), partially allowing the claim of the Contractor, the Company has
been directed to pay an amount of '' 653.52 Lakhs together with interest at the rate of 9 % p.a. from October 14,
2011 till the date of realisation. The Company has challenged the Award by filing a Petition before the High Court
of Madras. By an interim Order dated March 25, 2024 the Hon''ble Madras High Court has, pending the disposal
of the said Petition, granted a stay of the execution of the said Award, subject to the Company furnishing Bank
Guarantee in favour of the Contractor for an amount of '' 1,19,11,601/- together with interest thereon at the
rate of 9% p.a. from the date of the claim petition viz., December 14, 2011 till the date of filing the Petition viz.,
February 12, 2024 within a period of four weeks. The Company is in the process of complying with the said
Order of the Hon''ble Madras High Court. The matter is pending and will come up in due course.

(h) With respect to member complaints pending before various consumer forum and other matters: Estimated
amount of claims '' 1,282.77 Lakhs (Previous year: '' 944.15 Lakhs). In addition, there are claims by some
members seeking certain reliefs which are not agreed by the company, the financial impact of these claims
are currently not ascertainable and hence not captured in above.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the defined benefit liability recognised in the standalone Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
previous period.

The Company expects to contribute '' 470.69 Lakhs (Previous year '' 212.96 Lakhs) to the gratuity trust during the next
financial year of 2025-26.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of
the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.

(c) Other long term employee benefits (Compensated absences)

The amount recognized as an expense in respect of compensated absences is '' 613.10 Lakhs (Previous Year:
'' 473.02 Lakhs).

Note No. 45 - Financial Instruments

Capital management

The Company''s key objective in managing its financial structure is to maximize value for shareholders, reduce cost of
capital, while at the same time ensuring that the Company has the financial flexibility required to continue its expansion.
The Company manages its financial structure majorly through internal accruals and makes any necessary adjustments
in light of prevailing economic conditions. In this context, the capital structure of the Company consists only of equity
and lease liability is not considered as debt. Equity comprises issued share capital, reserves and retained earnings as set
out in the statement of changes in equity.

(i) Credit risk management

A significant portion of the Company''s sales of Vacation Ownerships are by way of deferred payment schemes where
the customer is obligated to pay the membership fee in Equated Monthly Instalments (EMIs) and the ensuing credit risk
is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realisation of minimum down payment and
adherence to internal KYC norms;

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit
card instructions from the customers at inception to ensure security cover.

From an accounting perspective, revenue is recognised only when it is probable that the economic benefits associated
with the transaction will flow to the Company. The member is not allowed to use the benefits of membership until the
overdue amount is regularised or fully paid in that relevant period. The Company also assesses lifetime expected credit
loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss
experience. The categorisation of the receivables into its ageing buckets for the purposes of estimating the expected loss
allowance has been profiled based on the longest overdue of that member, for example, if a member has one instalment
overdue for say 12 months, the entire receivable of the member is aggregated into that ageing bucket and the credit loss
allowance is determined after taking into account the credits against the member under "Contract liability- Deferred
Revenue - Vacation ownership fee" (Refer Note no. 29 and Note no. 34).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting
period, are tested for adequacy and appropriately dealt with.

(ii) Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously
monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities
(predominantly trade payables, retention payables, etc.) with agreed repayment periods. The amount disclosed in
the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Company can be required to pay.

During the year, for borrowings from banks on the basis of security of current assets, quarterly returns or quarterly
statements of current assets filed by the Company with banks are in agreement with the books of account.

(ii) Market risk management

The Company''s market risk comprises solely of its foreign currency exposure which are limited and not material to
the size of its operations.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange
rate fluctuations arise. The Company''s exposure to currency risk relates primarily to the Company''s investing
activities when transactions are denominated in a different currency from the Company''s functional currency.

Note No. 50 - Segment information

The Company is primarily engaged in the business of sale of vacation ownership and accommodation related
services in India. As such, the Company operates in a single segment and there are no separate reportable
segments. The same is consistent with the information reviewed by the Chief Operating Decision Maker (CODM).
Vacation Ownership and accommodation related services includes a diverse portfolio of hotels and
resorts under the “Club Mahindra" an aspirational brand in the leisure hospitality industry in India.
Under vacation ownership and accommodation related services, a member is entitled to avail holidays for
a prescribed period every year for different tenures in the resorts (in India and abroad) depending on the type of
the membership purchased by a member. The entitlement to avail the holidays is subject to member paying the
requisite membership fee, annual subscription fees, any other dues, eligibility and availability as per membership
rules. Member can book and avail holiday in any resort which is available at the time of booking their holiday.

Vacation ownership resorts typically combine many of the comforts of home, such as accommodations with
studio, one and two bedroom options, with resort amenities such as swimming pools, restaurants, fitness
facilities and spas, as well as sports and recreation facilities appropriate for each resort''s unique location.
Vacation Ownership and accommodation related services generates most of its revenues as under.

• Selling vacation ownership products —The Company sells vacation ownership products to provide holiday facilities
to members for a specified period each year, over a number of years, for which membership fee is collected either in
full upfront, or on a deferred payment basis. In addition to membership fee, the company earns interest income on
a deferred payment option given to members for their purchase of vacation ownership products and also receives
annual subscription fees from members.

• Resort operations & Ancillary services - The Company operates and manages resorts and earns revenue mainly from
food and beverages, spa and other service offerings provided to resort guests (members and non-members) and
room rentals from non- members. (Also Refer Note no. 56)."

Note No. 55 - Reporting under Rule 11(d) of the Companies (Audit and Auditor''s) Rules, 2014

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries")
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party
identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any
party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in
other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.

Note No. 56 - NFRA order

The Company received an order (''the Order'') from National Financial Reporting Authority (''NFRA'') on March 29, 2023
wherein NFRA had made certain observations on identification of operating segments by the Company in compliance
with requirements of Ind AS 108 and the Company''s existing accounting policy for recognition of revenue on a straight¬
line basis over the membership period. As per the order received from NFRA, the Company was required to complete
its review of accounting policies and practices in respect of disclosure of operating segments and timing of recognition
of revenue from customers and take necessary measures to address the observations made in the Order. The Company
had submitted its assessment to NFRA and will consider further course of action, if any, basis directions from NFRA.
As at March 31, 2025, the management has assessed the application of its accounting policies relating to segment
disclosures and revenue recognition. Basis the current assessment by the Company after considering the information
available as on date; the existing accounting policies, practices and disclosures are in compliance with the respective Ind
AS and accordingly have been applied by the Company in the preparation of these financial statements.

Note No. 57 - Disclosure requirements as notified by MCA pursuant to amended Schedule III

No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended
Schedule III

(a) Crypto Currency or Virtual Currency

(b) Benam Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i) Wilful defaulter

ii) Utilisation of borrowed funds & share premium

iii) Borrowings obtained on the basis of security of current assets

iv) Discrepancy in utilisation of borrowings

v) Compliance with scheme of arrangement

(e) Relating to any undisclosed income that has been surrendered disclosed as income during the year in the tax
assessments under the Income Tax Act. 1961

Note No. 58

The standalone financial statements of the Company were approved by the Board of Directors and authorised for issue
on April 25, 2025.

As per our report of even date attached For and on behalf of the Board of Directors

For B S R & Co. LLP

Chartered Accountants

Firm Registration No. 101248W/W-100022

C P Gurnani Manoj Bhat

Chairman Managing Director & CEO

DIN: 00018234 DIN:05205447

Jaclyn Desouza

Partner Vimal Agarwal Dhanraj Mulki

Membership Number: 124629 Chief Financial Officer Company Secretary

Place : Mumbai Place : Mumbai FCS No.: 4631

Date : April 25, 2025 Date : April 25, 2025

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Mar 31, 2024

Treasury shares represents equity shares of '' 10/- each fully paid up, allotted to Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust (''ESOP Trust'') but not exercised by employees.

24 a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share.

ii) Repayment of capital will be in proportion to the number of equity shares held.

iii) With the adoption of new revenue recognition policy in accordance with Ind AS 115, the Company had to change its revenue recognition policy. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and that resulted in a Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year up to 2018-19. The Company is seeking a clarification from Ministry of Corporate Affairs (MCA) that this Transition Difference ought not to be considered for the purpose of calculation of dividend, under section 123(1) of the Companies Act, 2013. The declaration of dividend, if any shall be subject to clarification from MCA.

24 f) Equity shares movement during the 5 years preceding the Balance Sheet date:-

Equity shares issued as bonus, for consideration without cash : The Company after obtaining approval of shareholder''s

allotted 66,816,892 equity shares as fully paid up bonus shares in the proportion of 1:2, i.e. 1(one) bonus equity share of

'' 10/- each for 2(two) fully paid up equity shares on September 13, 2021.

24 g) i) Under the Employee Stock Option Scheme (“ESOS 2006") equity shares are allotted to the ESOP Trust set up by the Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme (“ESOS 2014"), under which the Company has the option to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The Company formulated the Employee Stock Option Scheme (“ESOS 2020"), under which the Company has the option to issue and allot the shares directly to the eligible employees/directors as per the recommendation of the remuneration committee.

iv) The details of the Employees'' Stock Option Schemes are as under:

Type of Arrangement ESOS 2006 - Equity settled option plan administered through Employee Stock

Option Trust.

ESOS 2014 - Equity settled option plan issued directly/administered through Employee Stock Option.

ESOS 2020 - Equity settled option plan issued directly Method of Settlement By issue of shares at Exercise Price.

a) General reserve: The general reserve is used from time to time to transfer net profits from retained earnings for appropriation purposes.

b) Securities Premium: Securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, utilise equity related expenses like share issue expenses, etc.

c) Share Option Outstanding Account: The Company has share option schemes under which options to subscribe the shares of the Company have been granted to certain eligible employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

d) Capital Reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase and common control mergers. It is not available for distribution as dividend.

e) Capital Redemption Reserve: The capital redemption reserve is used towards issue of fully paid bonus shares of the Company.

f) Revaluation Reserve: The revaluation reserve is credited on account of revaluation of freehold land. It is not available for distribution as dividend.

g) Transition Difference: The Cumulative effect of applying Ind AS 115 Revenue from Contract with Customers, Ind AS 116 Leases (net of deferred tax) is recognised as an adjustment to other equity, by separately disclosing it in Transition Difference. Subsequent impact of unwinding of transition adjustments of Ind AS 115 and Ind AS 116 is included in retained earnings.

(b) Subsequent to introduction of Section 43CB in the Income Tax Act, 1961 w.e.f 1 April 2017, the Company offered revenue from membership fees for taxation in accordance with ICDS IV in its return of income, i.e. revenue from membership fees is offered to tax by spreading the entire fees over the membership period. However, in the books of accounts, pending completion of detailed tax assessments from F.Y. 2016-17 onwards, the Company continued to make a higher provision for tax on the basis of the order of the Income tax Appellate tribunal (''ITAT''), basis which non-refundable admission fees is offered to tax upfront. Tax assessments of the Company for certain years have now been completed, wherein the tax authorities have accepted Company''s position on application of aforesaid principle of ICDS IV for taxation of membership fees. Accordingly, the Company has aligned the provision for income tax in the books of account in accordance with the return of income filed by the Company (which has been accepted in the completed tax assessments) and remeasured the accumulated deferred tax asset accordingly. The resultant net impact of credit of '' 1541.49 lakhs is presented as “Tax expense/ credit for prior years" in the standalone financial statements.

Note No. 43 - Contingent liabilities and commitments Contingent liabilities (to the extent not provided for)
Particulars	As at		As at
	March 31, 2024		March 31, 2023
(a) Income Tax matters:
Claims against the Company not acknowledged as debt (for matters disputed by
the Company)
pertaining to Revenue Recognition (timing difference *) pending before the CIT(A)/ITAT (Company appeal)	53,711.17		53,711.17
interest included in the above till the date of order	14,124.67		14,124.67
pertaining to other matters (mainly timing differences *), pending before the CIT(A)/ITAT (Company appeal)	6,778.79		6,778.79
interest included in the above till the date of order	1,419.92		1,419.92
Matters decided in favour of the Company at ITATlevel (but under appeal by the
Department)
pertaining to Revenue Recognition (timing difference *) pending before the Madras High Court (Department appeal) excluding interest	27,140.61		27,140.61
(b) Service tax matters:
(i) Service tax demand on the enrollment of member as against service tax paid	43,105.47		43,105.47
on receipt basis (timing differences *) (inclusive of penalty where quantified in demand) (Refer note 2 below)
(ii) Other items (inclusive of penalty where quantified in demand)	3,366.94		3,468.63

Particulars	As at March 31, 2024		As at March 31, 2023
(c) Luxury Tax matters: In respect of certain States, the Company has received demands for payment of luxury tax for member stay at resorts as summarised below:
Demands raised (inclusive of penalty)	6,790.98		6,833.00
(d) GST matters:
GST demand on issues relating to output tax liability on room accommodation services availed by members (on sale of membership services) and availment of Input Tax Credit (inclusive of penalty where quantified in demand)	1,705.75

The Company has challenged the above demands before various appellate authorities / High Court, the outcome of which is pending.

* For matters pertaining to timing differences, if liability were to crystallise, there would be future tax benefits, except to the extent of tax rate differences and interest, if any which currently is not determinable.

Notes:

1) The above amounts are based on demands raised, which the Company is contesting with the concerned authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company''s rights for future appeals. No reimbursements are expected.

2) The Company had received show cause notices from service tax authorities of '' 21,991.33 lakhs. The detailed reply to the SCN and rectification application were submitted by the Company in prior financial years in response to the Order in Original from the Principal Commissioner of CGST and Central Exercise. The Pricipal Commissioner confirmed the demand amounting to '' 43,105.47 lakhs including interest and penalty and the same has been disclosed as Contingent liability in above table. As the Principal Commissioner rejected rectification application without giving any opportunity for personal hearing, the Company filed Writ Application before Madras High Court and Madras High Court on 8th March 2023 accepted the Company''s request to provide an opportunity for hearing and set aside the Order passed by Principal Commissioner. On 29th March 2023, the Principal Commissioner reaffirmed the Original Order dated 7th Feb 22 and rejected the Company''s rectification application. The Company has filed a Writ Application before the Madras High Court against the said Order of Principal Commissioner.

3) The Company has accounted for service tax receivable of '' 826.68 lakhs (Previous year '' 822.30 lakhs) in relation to the service tax paid on ASF and Membership fee invoices for contracts which have been cancelled post GST implementation. The Company has received an unfavorable order against the refund claim and has filed an appeal against the order. Commissioner of GST and Central Excise (Appeals) has allowed the appeal and remanded back the matter to lower authorities for verification of documents.

Particulars	As at March 31, 2024		As at March 31, 2023
(e) Guarantees given for its subsidiaries:
Amount of guarantees given (Euro)	770.00		770.00
Outstanding amount against guarantees (Euro)	690.48		680.48
Amount of guarantees given (INR) (Refer Note 51)	69,481.34		69,022.03
Outstanding amount against guarantees (INR) (Refer Note 51)	62,305.36		60,997.10

(f) Other matters under appeal (Property related)

(i) The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company and cancelled the assignment of land underlying the Munnar Resort (Total Purchase Value '' 605.12 Lakhs) and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the said Order. The writ Petition has been disposed of by an Order dated May 21, 2019. Against the said Order, the Company has filed a Writ Appeal and by an order dated June 19, 2019, the Court granted an interim stay of all further proceedings. The Writ Appeal has been dismissed by a Judgement dated May 25, 2022. The Company has filed Review Petition before the Kerala High Court. The same is pending.

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the Company''s resort property at Lonavala, Maharashtra and obtained an interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the local Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter alia, seeking declaration that the proceedings and Orders in respect of cancellation of the Non-Agricultural status of the land underlying the resort property at Lonavala (Total Purchase Value '' 1,545.01 Lakhs) are not enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra and the Collector, Pune not to give effect to the Orders of Non-Agricultural cancellation and the matter is pending for further hearing.

(g) Other matters

The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed '' 1,256.15 lacs as damages for termination of the Contract. The Company has made a counter claim of '' 2,003.56 lacs towards liquidated damages and other losses.

By an Award dated 11th September, 2023 (“Award"), partially allowing the claim of the Contractor, the Company has been directed to pay an amount of '' 653.52 lakhs together with interest at the rate of 9 % p.a. from 14th October, 2011 till the date of realisation. The Company has challenged the Award by filing a Petition before the High Court of Madras. By an interim Order dated 25th March, 2024, the Hon''ble Madras High Court has, pending the disposal of the said Petition, granted a stay of the execution of the said Award, subject to the Company furnishing Bank Guarantee in favour of the Contractor for an amount of ''1,19,11,601/- together with interest thereon at the rate of 9% p.a. from the date of the claim petition viz., 14th December, 2011 till the date of filing the Petition viz., 12th February, 2024 within a period of four weeks. The Company is in the process of complying with the said Order of the Hon''ble Madras High Court. The matter is pending and will come up in due course.

(h) With respect to member complaints pending before various consumer forum and other matters: Estimated amount of claims '' 944.15 lakhs (As at March 31, 2023: '' 795.91 lakhs). In addition, there are claims by some members seeking certain reliefs which are not agreed by the Company, the financial impact of these claims are currently not ascertainable and hence not captured in above.

(i) Capital commitment:
Particulars	As at March 31, 2024		As at March 31, 2023
Estimated amount of contracts remaining to be executed on Property, Plant & Equipment and not provided for (net of advances)	20,655.92		3,166.30

Note No. 44 - Employee benefits

(a) Defined contribution plan

The Company''s contribution to Provident Fund and Superannuation Fund aggregating ''1,480.72 lakhs (2023: ''1,473.10 lakhs) has been recognised in the Statement of Profit and Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans (Gratuity)

The Company has a funded Gratuity Scheme for its employees and gratuity liability has been provided based on the actuarial valuation done at the year end. The Gratuity scheme of the Company is funded with the Life Insurance Corporation of India.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the standalone Balance sheet.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(c) Other long term employee benefits (Compensated absences)

The amount recognized as an expense in respect of compensated absences is ''473.02 lakhs (Previous Year: '' 353.44 lakhs).

The Company''s key objective in managing its financial structure is to maximize value for shareholders, reduce cost of capital, while at the same time ensuring that the Company has the financial flexibility required to continue its expansion. The Company manages its financial structure majorly through internal accruals and makes any necessary adjustments in light of prevailing economic conditions. In this context, the capital structure of the Company consists only of equity and lease liability is not considered as debt. Equity comprises issued share capital, reserves and retained earnings as set out in the statement of changes in equity.

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting business of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company''s competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. Risk management forms an integral part of the Company''s Business Plan. The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include credit risk, liquidity risk and market risk.

(i) Credit risk management

A significant portion of the Company''s sales of Vacation Ownerships are by way of deferred payment schemes where the customer is obligated to pay the membership fee in Equated Monthly Instalments (EMIs) and the ensuing credit risk is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realisation of minimum down payment and adherence to internal KYC norms;

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit card instructions from the customers at inception to ensure security cover.

From an accounting perspective, revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the Company. The member is not allowed to use the benefits of membership untill the overdue amount is regularised or fully paid in that relevant period. The Company also assesses lifetime expected credit loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss experience. The categorisation of the receivables into its ageing buckets for the purposes of estimating the expected loss allowance has been profiled based on the longest overdue of that member, for example, if a member has one instalment overdue for say 12 months, the entire receivable of the member is aggregated into that ageing bucket and the credit loss allowance is determined after taking into account the credits against the member under “Contract liability- Deferred Revenue - Vacation ownership fee" (refer note 29 and note 34).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting period, are tested for adequacy and appropriately dealt with.

*Given that the Company is deferring recognition of revenue at inception, as explained above the risk of credit loss is reduced and the member is allowed to avail the benefits of membership only when all the overdue amount is regularised or fully paid in that relevant period. The amounts deferred at inception are adjusted from the carrying value of receivables (refer note 8 and 17) in the same proportion, except in cases where the allowance is directly attributable to a particular contract.

(ii) Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities (predominantly trade payables, retention payables, etc) with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

The Company has provided financial guarantees to its wholly owned subsidiaries. The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

During the year, for borrowings from banks on the basis of security of current assets, quarterly returns or quarterly statements of current assets filed by the Company with banks are in agreement with the books of account.

(iii) Market risk management

The Company''s market risk comprises solely of its foreign currency exposure which are limited and not material to the size of its operations.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company''s exposure to currency risk relates primarily to the Company''s investing activities when transactions are denominated in a different currency from the Company''s functional currency.

Note No. 50 - Segment information

The Company is primarily engaged in the business of sale of vacation ownership and accommodation related services in India. As such, the Company operates in a single segment and there are no separate reportable segments. The same is consistent with the information reviewed by the Chief Operating Decision Maker (CODM).

Vacation Ownership and accommodation related services includes a diverse portfolio of hotels and resorts under the “Club Mahindra" an aspirational brand in the leisure hospitality industry in India.

Under vacation ownership and accommodation related services, a member is entitled to avail holidays for a prescribed period every year for different tenures in the resorts (in India and abroad) depending on the type of the membership purchased by a member. The entitlement to avail the holidays is subject to member paying the requisite membership fee, annual subscription fees, any other dues, eligibility and availability as per membership rules. Member can book and avail holiday in any resort which is available at the time of booking their holiday.

Vacation ownership resorts typically combine many of the comforts of home, such as accommodations with studio, one and two bedroom options, with resort amenities such as swimming pools, restaurants, fitness facilities and spas, as well as sports and recreation facilities appropriate for each resort''s unique location.

Vacation Ownership and accommodation related services generates most of its revenues as under.

• Selling vacation ownership products —The Company sells vacation ownership products to provide holiday facilities to members for a specified period each year, over a number of years, for which membership fee is collected either in full upfront, or on a deferred payment basis. In addition to membership fee, the company earns interest income on a deferred payment option given to members for their purchase of vacation ownership products and also receives annual subscription fees from members.

• Resort operations & Ancillary services - The Company operates and manages resorts and earns revenue mainly from food and beverages, spa and other service offerings provided to resort guests (members and non-members) and room rentals from non- members.

Note No. 55 - Reporting under Rule 11(d) of the Companies (Audit and Auditor''s) Rules, 2014

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note No.56 - NFRA order

The Company received an order (''the Order'') from National Financial Reporting Authority (''NFRA'') on March 29, 2023 wherein NFRA had made certain observations on identification of operating segments by the Company in compliance with requirements of Ind AS 108 and the Company''s existing accounting policy for recognition of revenue on a straight-line basis over the membership period. As per the order received from NFRA, the Company was required to complete its review of accounting policies and practices in respect of disclosure of operating segments and timing of recognition of revenue from customers and take necessary measures to address the observations made in the Order. The Company had submitted its assessment to NFRA and will consider further course of action, if any, basis directions from NFRA.

As at March 31, 2024, the management has assessed the application of its accounting policies relating to segment disclosures and revenue recognition. Basis the current assessment by the Company after considering the information available as on date; the existing accounting policies, practices and disclosures are in compliance with the respective Ind AS and accordingly have been applied by the Company in the preparation of these financial statements.

Note No. 57

The standalone financial statements of the Company were approved by the Board of Directors and authorised for issue on April 26, 2024.

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Mar 31, 2023

Treasury shares represents equity shares of '' 10/- each fully paid up, allotted to Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust (''ESOP Trust'') but not exercised by employees.

a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share.

ii) Repayment of capital will be in proportion to the number of equity shares held.

iii) With the adoption of new revenue recognition policy in accordance with Ind AS 115, the Company had to change its revenue recognition policy. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and that resulted in a Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year since 2006. The Company is seeking a clarification from Ministry of Corporate Affairs (MCA) that this Transition Difference ought not to be considered for the purpose of calculation of dividend, under section 123(1) of the Companies Act, 2013. The declaration of dividend, if any shall be subject to clarification from MCA.

In the previous year, the Board of Directors at its meeting held on July 29, 2021 had approved issue of bonus shares in the proportion of 1:2, i.e. 1(one) bonus equity share of '' 10/- each for 2(two) fully paid up equity shares which was allotted on September 13, 2021 on approval being received in the shareholder''s meeting.

24 f) i) Under the Employee Stock Option Scheme (“ESOS 2006") equity shares are allotted to the ESOP Trust set up by the Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme (“ESOS 2014"), under which the Company has the option to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The Company formulated the Employee Stock Option Scheme (“ESOS 2020"), under which the Company has the option to issue and allot the shares directly to the eligible employees/directors as per the recommendation of the remuneration committee.

a) General reserve: The general reserve is used from time to time to transfer net profits from retained earnings for appropriation purposes.

b) Securities Premium: Securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, utilise equity related expenses like share issue expenses, etc.

c) Share option outstanding account: The Company has share option schemes under which options to subscribe the shares of the Company have been granted to certain eligible employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

d) Capital reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase and common control mergers. It is not available for distribution as dividend.

e) Capital redemption reserve: The capital redemption reserve is used towards issue of fully paid bonus shares of the Company.

f) Revaluation reserve: The revaluation reserve is credited on account of revaluation of freehold land. It is not available for distribution as dividend.

g) Transition difference: The Cumulative effect of applying Ind AS 115 Revenue from Contract with Customers, Ind AS 116 Leases (net of deferred tax) is recognised as an adjustment to other equity, by seperately disclosing it in Transition Difference. Subsequent impact of unwinding of transition adjustments of Ind AS 115 and Ind AS 116 is included in retained earnings.

Treasury shares represents equity shares of '' 10/- each fully paid up, allotted to Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust (''ESOP Trust'') but not exercised by employees.

24 a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share.

ii) Repayment of capital will be in proportion to the number of equity shares held.

iii) With the adoption of new revenue recognition policy in accordance with Ind AS 115, the Company had to change its revenue recognition policy. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and that resulted in a Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year since 2006. The Company is seeking a clarification from Ministry of Corporate Affairs (MCA) that this Transition Difference ought not to be considered for the purpose of calculation of dividend, under section 123(1) of the Companies Act, 2013. The declaration of dividend, if any shall be subject to clarification from MCA.

a) General reserve: The general reserve is used from time to time to transfer net profits from retained earnings for appropriation purposes.

b) Securities Premium: Securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, utilise equity related expenses like share issue expenses, etc.

c) Share option outstanding account: The Company has share option schemes under which options to subscribe the shares of the Company have been granted to certain eligible employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

d) Capital reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase and common control mergers. It is not available for distribution as dividend.

e) Capital redemption reserve: The capital redemption reserve is used towards issue of fully paid bonus shares of the Company.

f) Revaluation reserve: The revaluation reserve is credited on account of revaluation of freehold land. It is not available for distribution as dividend.

g) Transition difference: The Cumulative effect of applying Ind AS 115 Revenue from Contract with Customers, Ind AS 116 Leases (net of deferred tax) is recognised as an adjustment to other equity, by seperately disclosing it in Transition Difference. Subsequent impact of unwinding of transition adjustments of Ind AS 115 and Ind AS 116 is included in retained earnings.

The Special Bench of the Income Tax Appellate Tribunal (ITAT) has, after considering the relevant facts pertaining to the Company, by its order dated May 26, 2010 upheld the contention of the Company that in the Company''s case 60% of the membership fees should be considered chargeable to tax in the year of enrolment of a member whereas the balance 40% should be charged on pro rata basis over the period of membership. The Department''s appeal against the said order is pending before Madras High Court. Consequently, the Company has continued to provide for income tax by computing income by applying the order of the ITAT.

The Company has been advised that after the introduction of Section 43CB with effect from April 1, 2017 the revenue from membership fees is chargeable as per ICDS IV. The Company is further advised that as per the said ICDS the revenue from membership fees is chargeable to tax by spreading the entire fees over the membership period. The Company has, accordingly, filed its Return of Income from Assessment Year 2017-18 onwards as per ICDS IV. However in the books of accounts, the Company has continued to make its provision for tax on the basis of the order of the ITAT. If the tax liability is computed applying ICDS IV the liability for current tax will be significantly lower with a corresponding impact in Deferred Tax.

The Special Bench of the Income Tax Appellate Tribunal (ITAT) has, after considering the relevant facts pertaining to the Company, by its order dated May 26, 2010 upheld the contention of the Company that in the Company''s case 60% of the membership fees should be considered chargeable to tax in the year of enrolment of a member whereas the balance 40% should be charged on pro rata basis over the period of membership. The Department''s appeal against the said order is pending before Madras High Court. Consequently, the Company has continued to provide for income tax by computing income by applying the order of the ITAT.

The Company has been advised that after the introduction of Section 43CB with effect from April 1, 2017 the revenue from membership fees is chargeable as per ICDS IV. The Company is further advised that as per the said ICDS the revenue from membership fees is chargeable to tax by spreading the entire fees over the membership period. The Company has, accordingly, filed its Return of Income from Assessment Year 2017-18 onwards as per ICDS IV. However in the books of accounts, the Company has continued to make its provision for tax on the basis of the order of the ITAT. If the tax liability is computed applying ICDS IV the liability for current tax will be significantly lower with a corresponding impact in Deferred Tax.

Note No. 43 - Contingent liabilities and commitments Contingent liabilities (to the extent not provided for)
Particulars	As at		As at
	March 31, 2023		March 31, 2022
(a) Income tax matters:
Claims aaainst the Company not acknowledged as debt (for matters disputed by
the Company)
pertaining to Revenue Recognition (timing difference *) pending before the CIT(A)/ITAT (Company appeal)	53,711.17		53,711.17
interest included in the above till the date of order	14,124.67		14,124.67
pertaining to other matters (mainly timing differences *), pending before the CIT(A)/ITAT (Company appeal)	6,778.79		6,778.79
interest included in the above till the date of order	1,419.92		1,419.92
Matters decided in favour of the Company, (but under appeal by the department)
pertaining to Revenue Recognition (timing difference *) pending before the Madras High Court (Department appeal) excluding interest	27,140.61		27,140.61
(b) Service tax matters:
(i) Service tax demand on the enrollment of member as against service tax paid	43,105.47		43,105.47
on receipt basis (timing differences *) (inclusive of penalty where quantified in demand) (Refer note 2 below)
(ii) Other items (inclusive of penalty where quantified in demand)	3,468.63		3,468.63

* For matters pertaining to timing differences, if liability were to crystallise, there would be future tax benefits, except to the extent of tax rate differences and interest, if any which currently is not determinable.

Particulars	As at March 31, 2023		As at March 31, 2022
(c) Luxury tax matters: In respect of certain States, the Company has received demands for payment of luxury tax for member stay at resorts as summarised below: Demands raised (inclusive of penalty) The Company has challenged the above demands before various appellate authorities / high Court, the outcome of which is pending.	6,833.00		6,895.37

Notes:

1) The above amounts are based on demands raised, which the Company is contesting with the concerned authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company''s rights for future appeals. No reimbursements are expected.

2) The Company had received show cause notices from service tax authorities of '' 21,991.33 lakhs.The Company had received an Order in original from the principal commissioner of CGST and Central Excise confirming the demand amounting to '' 43,105.47 lakhs including interest and penalty and the same has been disclosed as Contingent liability in above table.

The Company filed rectification application against the said order before Principal Commissioner on January 18, 2022 for rectification of mistake apparent from the record as department has incorrectly interpreted the financial statement to determine service tax demand. However Principal Commissioner rejected rectification application on February 7, 2022 without giving any opportunity for personal hearing. Thereafter Company filed Writ Application before Madras High Court on February 22, 2022 against rejection of rectification application order. The Madras High Court on March 8, 2023 accepted the Company''s request to provide an opportunity for hearing and set aside the Order passed by Principal Commissioner. On March 29, 2023, the Principal Commissioner reaffirmed the Original Order dated February 7, 2022 and rejected the Company''s rectification application. The Company is contemplating to file a Writ Application before the Madras High Court against the said Order of Principal Commissioner. Company is confident that no payment is expected to be made for this matter.

3) The Company has accounted for service tax receivable of '' 822.30 lakhs (Previous year '' 752.27 lakhs) in relation to the service tax paid on ASF and Membership fee invoices for contracts which have been cancelled post GST implementation. The Company has received an unfavorable order against the refund claim and has filed an appeal against the order. Commissioner of GST and Central Excise (Appeals) has allowed the appeal and remanded back the matter to lower authorities for verification of documents.

(e) Other matters under appeal (Property related)

(i) The Government of Kerala through the Sub Collector, district of devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of land revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company and cancelled the assignment of land underlying the munnar resort (Total Gross Value '' 605.12 Lakhs) and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the said Order. The writ Petition has been disposed off by an Order dated May 21, 2019. Against the said Order, the company has filed a Writ Appeal and by an order dated June 19, 2019, the Court granted an interim stay of all further proceedings. The Writ Appeal has been dismissed by a Judgement dated May 25, 2022. The Company has filed review petition before the Kerala High Court. The same is pending.

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the Company''s resort property at Lonavala, Maharashtra and obtained an interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the local Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter alia, seeking declaration that the proceedings and Orders in respect of cancellation of the NA status of the land underlying the resort property at Lonavala (Total Gross Value '' 1,545.01 Lakhs) are not enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra and the Collector, Pune not to give effect to the Orders of NA cancellation and the matter is pending for further hearing.

(f) Other matters:

The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed '' 1,256.15 lakhs as damages for termination of the Contract. The Company has made a counter claim of '' 2,003.56 lakhs towards liquidated damages and other losses. The matter has been heard by the Arbitrator and is reserved for Orders.

(g) With respect to member complaints pending before various consumer forum and other matters:

Estimated amount of claims '' 795.91 lakhs (As at March 31, 2022: '' 579.39 lakhs). In addition, there are claims by some members seeking certain reliefs which are not agreed by the company, the financial impact of these claims are currently not ascertainable and hence not captured in above.

Note No. 44 - Employee benefits

(a) Defined contribution plan

The Company''s contribution to provident fund and superannuation fund aggregating '' 1,473.10 lakhs (2022: '' 1,312.77 lakhs) has been recognised in the Statement of Profit and Loss under the head employee benefits expense.

(b) Defined Benefit Plans (Gratuity)

The Company has a funded gratuity scheme for its employees and gratuity liability has been provided based on the actuarial valuation done at the year end. The gratuity scheme of the Company is funded with the Life Insurance Corporation of India.

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting business of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company''s competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. Risk management forms an integral part of the Company''s Business Plan. The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include credit risk, liquidity risk and market risk.

(i) Credit risk management

A significant portion of the Company''s sales of vacation ownerships are by way of deferred payment schemes where the customer is obligated to pay the membership fee in Equated Monthly Instalments (EMIs) and the ensuing credit risk is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realisation of minimum down payment and adherence to internal KYC norms;

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit card instructions from the customers at inception to ensure security cover.

From an accounting perspective, revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the Company. The member is not allowed to use the benefits of membership untill the overdue amount is regularised or fully paid in that relevant period. The Company also assesses lifetime expected credit loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss experience. The categorisation of the receivables into its ageing buckets for the purposes of estimating the expected loss allowance has been profiled based on the longest overdue of that member, for example, if a member has one instalment overdue for say 12 months, the entire receivable of the member is aggregated into that ageing bucket and the credit loss allowance is

determined after taking into account the credits against the member under “Contract liability- deferred revenue - vacation ownership fee" (refer note 29 and note 34).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting period, are tested for adequacy and appropriately dealt with.

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities (predominantly trade payables, retention payables, etc) with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

The Company has provided financial guarantees to its wholly owned subsidiaries. The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

During the year, for borrowings from banks on the basis of security of current assets, quarterly returns or quarterly statements of current assets filed by the Company with banks are in agreement with the books of account.

(iii) Market risk management

The Company''s market risk comprises solely of its foreign currency exposure which are limited and not material to the size of its operations.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company''s exposure to currency risk relates primarily to the Company''s investing activities when transactions are denominated in a different currency from the Company''s functional currency.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

Note No. 55 - Reporting under Rule 11(d) of the Companies (Audit and Auditor''s) Rules, 2014

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note No.56 - NFRA order

The Company has received an order (''the Order'') from National Financial Reporting Authority (''NFRA'') on March 29, 2023 wherein NFRA has made certain observations on identification of operating segments by the Company in compliance with requirements of Ind AS 108 and the Company''s existing accounting policy for recognition of revenue on a straight-line basis over the membership period. As per the order received from NFRA, the Company is required to complete its review of accounting policies and practices in respect of disclosure of operating segments and timing of recognition of revenue from customers and take necessary measures to address the observations made in the Order by June 30, 2023. The Company is conducting review as required by the Order.

As at March 31, 2023, the management has assessed the application of its accounting policies relating to segment disclosures and revenue recognition. Basis the current assessment by the Company after considering the information available as on date; the existing accounting policies, practices and disclosures are in compliance with the respective Ind AS and accordingly have been applied by the Company in the preparation of these standalone financial statements.

Note No.57 - Estimation uncertainty relating to COVID-19 outbreak

The Company has considered internal and external sources of information, economic forecasts and industry reports, up to the date of approval of the financial statements, in determining the impact of COVID 19 pandemic on various elements of its business operations and financial statements. The Company has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Company expects to recover the carrying amount of its current and non current assets. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of review of these financial statements depending on how long the pandemic lasts and time period taken for the economic activities to return to normalcy.

Note No. 58

The figures for the previous year have been regrouped/ reclassified to correspond with current year''s classification/ disclosure, wherever necessary.

The standalone financial statements of the Company were approved by the Board of Directors and authorised for issue on April 25, 2023.

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Mar 31, 2022

a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share.

ii) Repayment of capital will be in proportion to the number of equity shares held.

iii) The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

iv) With the adoption of new revenue recognition policy in accordance with Ind AS 115, the Company had to change its revenue recognition policy. Consequently, the Deferred Revenue and Deferred Costs had to be recomputed and that resulted in a Transition Difference. The Company is profitable and has healthy cash flows and has declared dividends every year since 2006. The Company is seeking a clarification from Ministry of Corporate Affairs (MCA) that this Transition Difference ought not to be considered for the purpose of calculation of dividend, under section 123(1) of the Companies Act, 2013. The declaration of dividend, if any shall be subject to clarification from MCA.

The Board of Directors at its meeting held on July 29, 2021 had approved issue of bonus shares in the proportion of 1:2,

i.e. 1(one) bonus equity share of '' 10/- each for 2(two) fully paid up equity shares which was allotted on September 13,

2021 on approval being received in the shareholder''s meeting.

i) Under the Employee Stock Option Scheme (“ESOS 2006") equity shares are allotted to the ESOP Trust set up by the Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme (“ESOS 2014"), under which the Company has the option to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The Company formulated the Employee Stock Option Scheme (“ESOS 2020"), under which the Company has the option to issue and allot the shares directly to the eligible employees/directors as per the recommendation of the remuneration committee.

iv) The details of the Employees'' Stock Option Schemes are as under:

Type of Arrangement ESOS 2006 - Equity settled option plan administered through Employee Stock

Option Trust.

ESOS 2014 - Equity settled option plan issued directly/administered through Employee Stock Option Trust.

ESOS 2020 - Equity settled option plan issued directly Method of Settlement By issue of shares at Exercise Price.

a) General reserve: The general reserve is used from time to time to transfer net profits from retained earnings for appropriation purposes.

b) Securities Premium: Securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, write-off equity related expenses like share issue expenses, etc.

c) Share Option Outstanding Account: The Company has share option schemes under which options to subscribe the shares of the Company have been granted to certain eligible employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

d) Capital Reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase and common control mergers. It is not available for distribution as dividend.

e) Capital Redemption Reserve: The capital redemption reserve is used towards issue of fully paid bonus shares of the Company.

f) Revaluation Reserve: The revaluation reserve is credited on account of revaluation of freehold land. It is not available for distribution as dividend.

g) Transition Difference: The Cumulative effect of applying Ind AS 115 Revenue from Contract with Customers, Ind AS 116 Leases (net of deferred tax) is recognised as an adjustment to other equity, by seperately disclosing it in Transition Difference. Subsequent impact of unwinding of transition adjustments of Ind AS 115 and Ind AS 116 is included in retained earnings.

The Special Bench of the Income Tax Appellate Tribunal (ITAT) has, after considering the relevant facts pertaining to the Company, by its order dated May 26, 2010 upheld the contention of the Company that in the Company''s case 60% of the membership fees should be considered chargeable to tax in the year of enrolment of a member whereas the balance 40% should be charged on pro rata basis over the period of membership. The Department''s appeal against the said order is pending before Madras High Court. Consequently, the Company has continued to provide for income tax by computing income by applying the order of the ITAT.

The Company has been advised that after the introduction of Section 43CB with effect from April 1, 2017 the revenue from membership fees is chargeable as per ICDS IV. The Company is further advised that as per the said ICDS the revenue from membership fees is chargeable to tax by spreading the entire fees over the membership period. The Company has, accordingly, filed its Return of Income from Assessment Year 2017-18 as per ICDS and proposes to make a similar claim in the Return of Income for the Financial Year 2021-22. However in the books of accounts, the Company has continued to make its provision for tax on the basis of the order of the ITAT. If the tax liability is computed applying ICDS IV the liability for current tax will be significantly lower.

Note No. 42 - Contingent liabilities and commitments Contingent liabilities (to the extent not provided for)
Particulars	As at		As at
	March 31, 2022		March 31, 2021
(a) Income Tax matters:
Claims aaainst the Company not acknowledged as debt (for matters disputed by
the Company)
pertaining to Revenue Recognition (timing difference *) pending before the CIT(A)/ITAT (Company appeal)	53,711.17		52,652.65
interest included in the above till the date of order	14,124.67		13,584.11
pertaining to other matters (mainly timing differences *), pending before the CIT(A)/ITAT (Company appeal)	6,778.79		5,153.63
interest included in the above till the date of order	1,419.92		1,086.96
Matters decided in favour of the Company, (but under appeal by the Department)
pertaining to Revenue Recognition (timing difference *) pending before the Madras High Court (Department appeal) excluding interest	27,140.61		27,140.61
(b) Service Tax matters:
(i) Service tax demand on the enrollment of member as against service tax paid	43,105.47		-
on receipt basis (timing differences *) (inclusive of penalty where quantified in demand)
(ii) Other items (inclusive of penalty where quantified in demand)	3,468.63		3,080.32

Particulars	As at March 31, 2022		As at March 31, 2021
(c) Luxury Tax matters: In respect of certain States, the Company has received demands for payment of luxury tax for member stay at resorts as summarised below:
Demands raised (inclusive of penalty)	6,895.37		6,895.37
The Company has challenged the above demands before various appellate authorities / High Court, the outcome of which is pending. For all such matters, the Company has made cumulative provisions for '' 698.72 lakhs (Previous year '' 698.72 lakhs) on a best estimate basis.

* For matters pertaining to timing differences, if liability were to crystallise, there would be future tax benefits, except to the

extent of tax rate differences and interest, if any.

Notes:

1) The above amounts are based on demands raised, which the Company is contesting with the concerned authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company''s rights for future appeals. No reimbursements are expected.

2) The Company had received show cause notices from service tax authorities of '' 21,991.33 lakhs. The detailed reply to the SCN was submitted by the Company and the said matter were also reported in prior financial statements. During the year, the Company has received an Order in Original from the Principal Commissioner of CGST and Central Exercise confirming the demand amounting to '' 43,105.47 lakhs including interest and penalty and the same has been disclosed as Contingent liability in above table.

The Company filed rectification application against the said order before Principal Commissioner on 18th Jan 22 for rectification of mistake apparent from the record as department has incorrectly interpreted the financial statement to determine service tax demand. However Principal Commissioner rejected rectification application on 7th Feb 22 without giving any opportunity for personal hearing. Thereafter Company filed Writ Application before Madras High Court on 22nd Feb 22 against rejection of rectification application order. The Madras High Court has admitted Writ Appeal on March 17 2022 and same is pending for disposal. Company is confident that no payment is expected to be made for this matter.

3) The Company has accounted for service tax receivable of '' 752.27 lakhs (Previous year '' 728.36 lakhs) in relation to the service tax paid on ASF and Membership fee invoices for contracts which have been cancelled post GST implementation. The Company has received an unfavorable order against the refund claim and has filed an appeal against the order.

(e) Other matters under appeal (Property related):

(i) The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company and cancelled the assignment of land underlying the Munnar Resort (Total Gross Value '' 605.12 Lakhs) and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the said Order. The writ Petition has been disposed of by an Order dated May 21, 2019. Against the said Order, the company has filed a Writ Appeal and by an order dated June 19, 2019, the Court granted an interim stay of all further proceedings. The matter is pending.

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the Company''s resort property at Lonavala, Maharashtra and obtained an interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the local Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter alia, seeking declaration that the proceedings and Orders in respect of cancellation of the NA status of the land underlying the resort property at Lonavala (Total Gross Value '' 1,545.01 Lakhs) are not enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra and the Collector, Pune not to give effect to the Orders of NA cancellation and the matter is pending for further hearing.

(f) Other matters:

The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed '' 1,256.15 lakhs as damages for termination of the Contract. The Company has made a counter claim of '' 2,003.56 lakhs towards liquidated damages and other losses. The matter has been heard by the Arbitrator and is reserved for Orders.

(g) With respect to member complaints pending before various consumer forum and other matters:

Estimated amount of claims '' 579.39 lakhs (As at March 31, 2021: '' 489.85 lakhs). In addition, there are claims by some members seeking certain reliefs which are not agreed by the company, the financial impact of these claims are currently not ascertainable and hence not captured in above.

(i) Employees'' Provident Funds and Miscellaneous Provisions Act, 1952:

In February 2019, the Supreme Court of India in its judgement clarified the applicability of allowances that should be considered to measure obligations under Employees Provident Fund Act, 1952. The Company has been legally advised that there are interpretative challenges on the application of judgement retrospectively and as such does not consider there is any probable obligation for past periods. Accordingly, based on legal advice the Company had made a provision for provident fund contribution from the date of the Supreme Court order.

Note No. 43 - Employee benefits

(a) Defined Contribution Plan:

The Company''s contribution to Provident Fund and Superannuation Fund aggregating '' 1,312.77 lakhs (2021: '' 1,148.73 lakhs) has been recognised in the Statement of Profit and Loss under the head Employee Benefits Expense.

The Company''s key objective in managing its financial structure is to maximize value for shareholders, reduce cost of capital, while at the same time ensuring that the Company has the financial flexibility required to continue its expansion. The Company manages its financial structure majorly through internal accruals and makes any necessary adjustments in light of prevailing economic conditions. In this context, the capital structure of the Company consists only of equity and lease liability is not considered as debt. Equity comprises issued share capital, reserves and retained earnings as set out in the statement of changes in equity.

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting business of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company''s competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. Risk management forms an integral part of the Company''s Business Plan. The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include credit risk, liquidity risk and market risk.

(i) Credit risk management

A significant portion of the Company''s sales of Vacation Ownerships are by way of deferred payment schemes where the customer is obligated to pay the membership fee in Equated Monthly Instalments (EMIs) and the ensuing credit risk is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realisation of minimum down payment and adherence to internal KYC norms;

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit card instructions from the customers at inception to ensure security cover.

From an accounting perspective, revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the Company. The member is not allowed to use the benefits of membership untill the overdue amount is regularised or fully paid in that relevant period. The Company also assesses lifetime expected credit loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss experience. The categorisation of the receivables into its ageing buckets for the purposes of estimating the expected loss allowance has been profiled based on the longest overdue of that member, for example, if a member has one instalment overdue for say 12 months, the entire receivable of the member is aggregated into that ageing bucket and the credit loss allowance is

determined after taking into account the credits against the member under “Contract liability- Deferred Revenue - Vacation ownership fee" (refer note 29 and note 34).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting period, are tested for adequacy and appropriately dealt with.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company''s exposure to currency risk relates primarily to the Company''s investing activities when transactions are denominated in a different currency from the Company''s functional currency.

Note No. 53 - Estimation uncertainty relating to COVID-19 outbreak

The Company has considered internal and external sources of information, economic forecasts and industry reports, up to the date of approval of the financial statements, in determining the impact of COVID 19 pandemic on various elements of its business operations and financial statements. The Company has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Company expects to recover the carrying amount of its current and non current assets. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of review of these financial statements depending on how long the pandemic lasts and time period taken for the economic activities to return to normalcy.

Note No. 55 - Reporting under Rule 11(d) of the Companies (Audit and Auditor''s) Rules, 2014

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note No. 56

The figures for the previous year have been regrouped/ reclassified to correspond with current year''s classification/ disclosure. The financial statements of Mahindra Holidays & Resorts India Limited were approved by the Board of Directors and authorised for issue on May 2, 2022.

---

Mar 31, 2018

1 Corporate Information

The Company was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.

2 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described above, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below :

a. Share based payments

The entity initially measures the cost of equity settled transactions with employees using the Black Scholes model to determine the fair value of the options granted. Estimating the fair value of the share options granted require determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating the fair value for the share based payment transactions are disclosed in Note 20.

b. Defined benefit plans (gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the gratuity obligation are disclosed in Note 38.

c. Intangible assets under development

The Company capitalizes intangibles underdevelopment in accordance with the accounting policy. Initial capitalization of costs is based on management’s judgement that technological and economic feasibility is confirmed.

d. Life time Expected credit losses

Life time expected credit loss allowance is computed based on historical credit loss experience and adjusted for forward-looking information on collection .

e. Estimation towards revenue deferred at inception

The quantum of revenue deferred at inception is computed based on past trends of year-wise cancellation of memberships and considering factors impacting future collections.

f. Significant financing component

Given the nature of vacation ownership business, the Company has determined that membership fee does not include a significant financing component. Where the payment is received in installments, the Company charges appropriate interest to the members.

a) The preference shares of Guestline Hospitality Management and Developmnent Services Limited can be redeemed at par at the option of the investee at any time after five years but before twenty years from the date of allotment viz. 14.01.2003 or at the option of the holder be convertibble into fully paid equity shares of the face value of Rs.10 each anytime after thirty six months from the date of allotment.

b) During the year 15,321,400 (Previous Year NIL) equity shares of Rs.10 each were alloted at par by Gables Promoters Private Limited.

3 a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of Rs.10/-. Each holder of equity share is entitled to one vote per share.

ii) The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

iii) For the year ended March 31, 2018, the amount of dividend proposed to be distributed to equity shareholders is Rs.5,337.75 lacs at Rs.4 per share (Previous year Rs.4,441.79 lacs at Rs.5 per share).

iv) Repayment of capital will be in proportion to the number of equity shares held.

3 b) Shares in the Company held by Holding Company

3 c) Details of shares held by each shareholder holding more than 5% shares:

3 d) The reconciliation of the number of shares outstanding as at March 31, 2018 and March 31, 2017 is set out below:-

The Board of Directors at its meeting held on May 19, 2017 had approved issue of bonus shares in the proportion of 1:2, I.e. 1(one) bonus equity share of Rs.10/- each for 2(two) fully paid up equity shares which was allotted on July 12, 2017 on approval being received in the shareholder’s meeting.

3 e) i) Under the Employee Stock Option Scheme (“ESOS 2006”) equity shares are allotted to the ESOP Trust set up by the Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme (“ESOS 2014”), under which the Company has the option to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The details of the Employees’ Stock Option Schemes are as under:

Type of Arrangement ESOS 2006 - Equity settled option plan administered through Employee Stock

Option Trust.

ESOS 2014 - Equity settled option plan issued directly/administered through Employee Stock Option Trust.

Method of Settlement By issue of shares at Exercise Price.

a) General reserve: The general reserve is used from time to time to transfer net profits from retained earnings for appropriation purposes.

b) Securities Premium Reserve: Securities premium reserve is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, write-off equity related expenses like share issue expenses, etc.

c) Share Option Outstanding Account: The Company has share option schemes under which options to subscribe the shares of the Company have been granted to certain eligible employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

d) Capital Reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase and common control mergers. It is not available for distribution as dividend.

e) Capital Redemption Reserve: The capital redemption reserve is used towards issue of fully paid bonus shares of the Company.

The Company has taken certain properties under operating leases with varying lease terms, cancellable at the option of the Company. The future minimum lease payments are given below.

(f) Other matters under appeal (Property related):

(i)The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company and cancelled the assignment of land underlying the Munnar Resort and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the Company’s resort property at Lonavala, Maharashtra and obtained an ad-interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the local Mamlatdar’s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter alia, seeking declaration that the proceedings and Orders in respect of cancellation of the NA status of the land underlying the resort property at Lonavala are not enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra and the Collector,Pune not to give effect to the Orders of NA cancellation and the matter is pending for further hearing.

(g) Other matters:

(i) The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed Rs.1,256.15 lacs as damages for termination of the Contract. The Company has made a counter claim of Rs.2,003.56 lacs towards liquidated damages and other losses. The matter is pending before the Arbitrator.

(ii) The Regional Provident Fund Commissioner, Chennai had issued Summons initiating proceedings under Section 7A of the Employees Provident Fund Act for failing to remit contributions on allowances relating to employees for the period from March 2011 to February 2013 in respect of Indian employees and from April 2010 to February 2013 in respect of international employees. The PF Authorities have made a claim of Rs.189.93 lacs. The Company has filed a Writ Petition No 2408/2014 before the Madras High Court and the Court has granted an Interim stay of the above proceedings.

(iii) The Company had acquired the entire shareholding of erstwhile Holiday on Hill Resort Private Limited (erstwhile subsidiary) in the year 2012 and subsequently it was amalgamated with the Company. In the year 2013, a Show Cause Notice was issued by the Collector, Solan to the erstwhile subsidiary under the provisions of Section 118 of HP Tenancy and Land Reforms Act, 1972 (the Act) alleging that the sale by the erstwhile subsidiary had in violation of the provisions of the Act and has required the erstwhile subsidiary to show cause why the said land should not be confiscated. The erstwhile subsidiary had responded to said show cause notice, inter alia, submitting that it has not violated any provisions of the Act in as much as the Company has acquired only the shareholdings of the erstwhile subsidiary from its shareholders and no property has been sold to the Company. The matter has been disposed off by an Order dated 12th December, 2017 passed by the Financial Contoller (Appeals), HP, Shimla in Revision Application preferred by the Company.

(h) With respect to member complaints pending before various consumer fora and other matters: Estimated amount of claims Rs.493.93 lacs (As at March 31, 2017: Rs.475.36 lacs).

Note No. 4 - Employee Benefits:

(a) Defined contribution plan

The Company’s contribution to Provident Fund and Superannuation Fund aggregating Rs.990.45 Lacs (2017: Rs.836.18 Lacs) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans (Gratuity)

The Company has a funded Gratuity Scheme for its employees and gratuity liability has been provided based on the actuarial valuation done at the year end. The Gratuity scheme of the Company is funded with the Life Insurance Corporation of India.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to previous period.

The Company expects to contribute Rs.234.82 Lacs (Previous Year 151.68 lacs) to the gratuity trust during the next financial year of 2018-19.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The amount recognized as an expense in respect of Compensated absences is Rs.100.54 lacs (Previous Year: Rs.434.50 lacs).

Note No. 5 - Financial Instruments: Capital management

The Company’s key objective in managing its financial structure is to maximize value for shareholders, reduce cost of capital, while at the same time ensuring that the Company has the financial flexibility required to continue its expansion. The Company manages its financial structure majorly through internal accruals and makes any necessary adjustments in light of prevailing economic conditions. In this context, the capital structure of the Company consists only of equity. Equity comprises issued share capital, reserves and retained earnings as set out in the statement of changes in equity.

Financial Risk Management Framework

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting business of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company’s competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. Risk management forms an integral part of the Company’s Business Plan. The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include credit risk, liquidity risk and market risk.

(i) Credit risk management

A significant portion of the Company’s sales of Vacation Ownerships are by way of deferred payment schemes where the customer is obligated to pay the membership fee in Equated Monthly Installments (EMIs) and the ensuing credit risk is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realisation of minimum down payment and adherence to internal KYC norms.

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit card instructions from the customers at inception to ensure security cover;

From an accounting perspective, revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the Company. The Company also assesses lifetime expected credit loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss experience. The categorisation of the receivables into its ageing buckets for the purposes of estimating the expected loss allowance has been profiled based on the longest overdue of that member, for example, if a member has one installment overdue for say 12 months, the entire receivable of the member is aggregated into that ageing bucket and the credit loss allowance is determined after taking into account the credits against the member under “Deferred Revenue - entitlement fee” (refer note 24 and note 28(a)).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting period, are tested for adequacy and appropriately dealt with.

The credit loss allowance carried by the Company is as under:

* With effect from FY 2015-16, the Company, in accordance with Ind AS, is deferring revenue at inception based on trends as explained and accordingly the credit loss allowance reflects a declining trend. The amounts deferred at inception and the credit loss allowance are adjusted from the carrying value of receivables (refer note 7 and 14) in the same proportion, except in cases where the allowance is directly attributable to a particular contract.

(i) Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities (predominantly trade payables, retention payables, etc) with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

The Company has provided financial guarantees to its wholly owned subsidiaries. The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

Financing arrangements

The Company had access to following undrawn borrowing facilities at the end of the reporting period:

(ii) Market risk management

The Company’s market risk comprises solely of its foreign currency exposure which are limited and not material to the size of its operations. Its major exposure is against currencies that have been stable over several years.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company’s exposure to currency risk relates primarily to the Company’s investing activities when transactions are denominated in a different currency from the Company’s functional currency.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

Of the above foreign currency exposures, none of the exposures are hedged by a derivative. These foreign currency exposures are denominated in currencies that are not very volatile. Hence, the Company is not exposed to major currency risks.

Foreign Currency Sensitivity

The Company is exposed to the following currency risks - USD, AED, THB, MYR and EUR - and the following table demonstrates the sensitivity.

Note 1: Fair value determined using NAV.

Note 2: Fair value determined using discounted cash flow method. Reconciliation of Level 3 fair values

* Fair value of financial assets and financial liabilities (that are measured at amortised cost) closely approximate their carrying value.

Note No. 6 - Expenditure on Corporate Social Responsibility:

As per Section 135 of the Companies Act 2013, the Company needs to spend 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company has incurred CSR expenditure on activities specified in Schedule VII of the Companies Act, 2013.

Gross amount required to be spent by the Company during the year is Rs.340 Lacs (Previous Year : Rs.288 Lacs)

Note No. 7 - Segment information

The Company is primarily engaged in the business of sale of Vacation Ownership and other related services in India. As such, the Company operates in a single segment and there are no separate reportable segments. The same is consistent with the information reviewed by the chief operating decision maker (CODM).

Payments made by the Company to political parties in India in accordance with Section 182 of Companies Act, 2013, during the year are as follows:

Ind AS 115 “Revenue from contracts with customers” has been notified by the Ministry of Corporate Affairs on 28th Mar’18 which replaces the existing revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and Guidance Note on Accounting for Real Estate Transactions effective for accounting periods beginning on or after 1st April’18. Ind AS 115 sets out requirements for recognising revenue and costs from contracts with customers and includes extensive disclosure requirement which may have material impact on the Company’s reporting of revenue and costs.

The company’s business is to sell vacation ownership and provide holiday facilities to members for specified period each year, over a number of years, for which membership fee is collected. The Company is assessing the impact of the accounting changes that will arise under Ind AS 115, which include recognition of the membership fees and direct acquisition cost over the membership period. The changes highlighted above may have a material impact on the company’s income statement and statement of financial position after transition to Ind AS 115 from 1st April 2018. Accordingly, the Company’s Revenue Recognition Policy may undergo a change for the annual periods beginning from 1st April 2018.

* Specified Bank Notes collected and recorded at branches and resorts of the Company in the normal course of business have been deposited with banks across various locations.

The disclosures regarding details of specified bank notes held and transacted has not been made for the current year as the requirement does not pertain to financial year ended 31 March 2018. Corresponding amounts as appearing in the audited Ind AS financial statements for the period ended 31 March 2017 have been disclosed.

Note No. 8 - Regrouping/reclassification:

The figures for the previous year have been regrouped/ reclassified to correspond with current year’s classification/ disclosure that include changes consequent to the issuance of “Guidance Note on Division II - Ind AS Schedule III to the Companies Act, 2013”.

The financial statements of Mahindra Holidays and Resorts India Limited were approved by the Board of Directors and authorised for issue on May 8, 2018.

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Mar 31, 2017

Notes:

a) The preference shares of Guestline Hospitality Management and Development Services Limited can be redeemed at par at the option of the investee at any time after five years but before twenty years from the date of allotment viz. 14.01.2003 or at the option of the holder be convertible into fully paid equity shares of the face value of INR 10 each anytime after thirty six months from the date of allotment.

b) During the year, 5,738 equity shares of INR 10 each were alloted at par by Nreach Online Services Private Limited.

c) Refer Note Nos. 44 and 45 for disclosure of measurement policy as per IND AS 107, 109, 113

Treasury shares represents equity shares of INR 10/- each fully paid up alloted to Mahindra Holidays and Resorts India Limited Employees'' Stock Option Trust (''ESOP Trust'') but not exercised by employees.

20 a) Terms / rights attached to equity shares:

i) The Company has only one class of shares referred to as equity shares having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share.

ii) The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

iii) For the year ended March 31, 2017, the amount of dividend proposed to be distributed to equity shareholders is '' 4,441.79 lacs at '' 5 per share (Previous year '' 4,439.04 lacs at '' 5 per share).

iv) Repayment of capital will be in proportion to the number of equity shares held.

1 e) The Board of Directors at its meeting held on May 19, 2017 approved issue of Bonus Shares in the proportion of 1:2, i.e.

(One) bonus equity share of '' 10/- each for 2 (Two) fully paid-up equity shares as on the Record Date (being informed separately), subject to the approval of the Members of the Company.

2 f) i) Under the Employee Stock Option Scheme (“ESOS 2006") equity shares are allotted to the ESOP Trust set up by the Company. The ESOP Trust holds these shares for the benefit of the eligible employees/directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) The Company formulated the Employee Stock Option Scheme (“ESOS 2014"), under which the Company has the option to issue and allot the shares either directly to the eligible employees/directors or through the ESOP Trust. To the extent allotted, ESOP Trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The details of the Employees'' Stock Option Schemes are as under:

Type of Arrangement ESOS 2006 - Equity settled option plan administered through Employee Stock

Option Trust.

ESOS 2014 - Equity settled option plan issued directly/administered through Employee Stock Option Trust.

Method of Settlement By issue of shares at Exercise Price.

** Issued out of lapsed options.

# Out of the above 90,000 shares has been issued out of lapsed options.

## Out of the above 86,500 shares has been issued out of lapsed options.

(a) The Company has availed the exemption under Ind AS 101 First time Adoption, and has applied the accounting principles of Ind AS 102 only for ESOPs outstanding as of the transition date (April 1, 2015). Accordingly, the Employee compensation cost has been computed based on the fair values of the options granted for Grant VI (ESOS 2006), Grant VII (ESOS 2006), Grant VIII (ESOS 2006), Grant IX (ESOS 2006), Grant I (ESOS 2014), Grant II (ESOS 2014).

(b) The fair value of options as certified by independent valuer as of the respective dates of grant i.e. 21^st February 2012 is '' 113.81 for Grant VI (ESOS 2006), Rs, 129.93 for Grant VII (ESOS 2006), 21^st February 2013 is Rs, 94.43 for Grant VIII (ESOS 2006), 29^th January 2014 is Rs, 83.75 for Grant IX (ESOS 2006), 22^nd January 2015 is Rs, 97.24 for Grant I (ESOS 2014), 27^th October 2015 is Rs, 158.85 for Grant II (ESOS 2014), 18^th February 2016 is Rs, 126.91 for Grant III (ESOS 2014) and 31^st January 2017 is Rs, 150.35 for Grant IV (ESOS 2014).

(f) Other matters under appeal (Property related):

(i)The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company and cancelled the assignment of land underlying the Munnar Resort and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company had filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(ii) With respect to certain claims of neighbouring property owners, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against them disturbing the possession of the Company''s resort property at Lonavala, Maharashtra and obtained an ad-interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the local Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune. Further, on account of the cancellation of the Non-Agricultural land conversion order by the Collector, Pune on the basis of complaint made by the said neighbouring owner and subsequently confirmed by the Additional Divisional Commissioner, Pune, the Company has also filed another Civil Suit at Civil Court, Pune against State of Maharashtra and Others, inter alia, seeking declaration that the proceedings and Orders in respect of cancellation of the NA status of the land underlying the resort property at Lonavala are not enforceable and also sought other reliefs. Ad-interim stay has been granted against State of Maharashtra and the Collector,Pune not to give effect to the Orders of NA cancellation and the matter is pending for further hearing.

(g) Other matters:

(i) The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed '' 1,256.15 lacs as damages for termination of the Contract. The Company has made a counter claim of '' 2,003.56 lacs towards liquidated damages and other losses. The matter is pending before the Arbitrator.

(ii) The Regional Provident Fund Commissioner, Chennai had issued Summons initiating proceedings under Section 7A of the Employees Provident Fund Act for failing to remit contributions on allowances relating to employees for the period from March 2011 to February 2013 in respect of Indian employees and from April 2010 to February 2013 in respect of international employees. The PF Authorities have made a claim of '' 189.93 lacs. The Company has filed a Writ Petition No 2408/2014 before the Madras High Court and the Court has granted an Interim stay of the above proceedings.

(iii)The Company had acquired the entire shareholding of erstwhile Holiday on Hill Resort Private Limited (erstwhile subsidiary) in the year 2012 and subsequently it was amalgamated with the Company. In the year 2013, a Show Cause Notice was issued by the Collector, Solan to the erstwhile subsidiary under the provisions of Section 118 of HP Tenancy and Land Reforms Act, 1972 (the Act) alleging that the sale by the erstwhile subsidiary had in violation of the provisions of the Act and has required the erstwhile subsidiary to show cause why they said land should not be confiscated. The erstwhile subsidiary had responded to said show cause notice, inter alia, submitting that it has not violated any provisions of the Act in as much as the Company has acquired only the shareholdings of the erstwhile subsidiary from its shareholders and no property has been sold to the Company. The matter is pending before the Collector, Solan.

(h) With respect to member complaints pending before various consumer fora and other matters: Estimated amount of claims Rs, 475.36 lacs (As at March 31, 2016: Rs, 949.02 lacs, as at April 1, 2015: Rs, 826.50 lacs).

(a) Defined contribution plan

The Company''s contribution to Provident Fund and Superannuation Fund aggregating Rs, 836.18 Lacs (2016: '' 729.76 Lacs) has been recognized in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans (Gratuity)

The Company has a funded Gratuity Scheme for its employees and gratuity liability has been provided based on the actuarial valuation done at the year end. The Gratuity scheme of the Company is funded with the Life Insurane Corporation of India.

Defined benefit plans - as per actuarial valuation on March 31, 2017 and March 31, 2016:

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to previous period.

The Company expects to contribute Rs, 151.68 Lacs to the gratuity trust during the next financial year of 2017-18.

Financial Risk Management Framework

The Company has a robust business risk management process to identify, evaluate and mitigate risks impacting business including those which may threaten the existence of the Company. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. Risk management forms an integral part of the Company''s Business Plan. The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include credit risk, liquidity risk and market risk.

(i) Credit risk management

A significant portion of the Company''s sales of Vacation Ownerships are by way of deferred payment schemes where the customer is obligated to pay the membership fee in Equated Monthly Installments (EMIs) and the ensuing credit risk is managed by the Company in the following manner:

(a) preliminary assessment of customer credit worthiness, ensuring realization of minimum down payment and adherence to internal KYC norms.

(b) collecting post dated instruments such as cheques, Automated Clearing House (ACH) mandates, standing credit card instructions from the customers at inception to ensure security cover;

From an accounting perspective, revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the Company. The Company also assesses lifetime expected credit loss by using appropriate models, as prescribed by Ind AS 109, using past trends of collections and historical credit loss experience. The categorization of the receivables into its ageing buckets for the purposes of estimating the expected loss allowance has been profiled based on the longest overdue of that member, for example, if a member has one installment overdue for say 12 months, the entire

receivable of the member is aggregated into that ageing bucket and the credit loss allowance is determined after taking into account the credits against the member under “Deferred Revenue - Vacation Ownership entitlement fee" (refer note 24 and note 29(a)).

The allowances for credit loss and for revenue deferred at inception referred to above, carried at the end of every reporting period, are tested for adequacy and appropriately dealt with.

* With effect from FY 2015-16, the Company, in accordance with Ind AS, is deferring revenue at inception based on trends as explained and accordingly the credit loss allowance reflects a declining trend. The amounts deferred at inception and the credit loss allowance are adjusted from the carrying value of receivables (refer note 7 and 14) in the same proportion, except in cases where the allowance is directly attributable to a particular contract.

(i) Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Maturities of financial liabilities

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities (predominantly trade payables, retention payables, etc) with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

The Company has provided financial guarantees to its wholly owned subsidiaries. The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

Financing arrangements

The Company had access to following undrawn borrowing facilities at the end of the reporting period:

Maturities of financial assets

The following table details the Company''s expected maturity for its non-derivative financial assets (predominantly trade receivables, receivables from related parties, etc). The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company''s liquidity risk management as the liquidity is managed on a net asset and liability basis.

(iii) Market risk management

The Company''s market risk comprises solely of its foreign currency exposure which are limited and not material to the size of its operations. Its major exposure is against currencies that have been stable over several years.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company''s exposure to currency risk relates primarily to the Company''s investing activities when transactions are denominated in a different currency from the Company''s functional currency.

Note 1: Fair value determined using quoted market prices.

Note 2: Fair value determined using PE multiples, revenue multiples, etc.

Note 3: Fair value determined using the estimated credit risk of the counterparty.

* Fair value of financial assets and financial liabilities (that are measured at amortised cost) closely approximate their carrying value.

Note No. 4 - Expenditure on Corporate Social Responsibility:

As per Section 135 of the Companies Act 2013, the Company needs to spend 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company has incurred CSR expenditure on activities specified in Schedule VII of the Companies Act, 2013.

Gross amount required to be spent by the Company during the year is INR 280 Lacs (PY 2015-16: '' 271.90 Lacs)

There have been no overdue amounts as on the reporting date or any time during the year for which interest is paid or payable.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

Note No. 5 - Segment information:

The Company is primarily engaged in the business of sale of Vacation Ownership and other related services in India. As such, the Company operates in a single segment and there are no separate reportable segments. The same is consistent with the information reviewed by the chief operating decision maker (CODM).

Notes:

1 Dividends not recognized as liability until declared

Under Indian GAAP, proposed dividends are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid. In the case of the Company, declaration of dividends occur after the period end. Therefore the liability recorded for this dividend has been derecognized against retained earnings.

2 Expected credit loss provision

Under Indian GAAP, trade receivables have been provided based on management judgment on recoverability of overdue receivables based on assessment during collection based on policy consistently followed . Under Ind AS, such provision needs to be made using the expected credit loss model . The difference in provision under the two methods have been recognized against retained earnings.

3 ESOP fair value accounting

Under Indian GAAP, the Company recognized only the intrinsic value for the Employee Stock Option as an expense. Ind AS requires the fair value of the stock options to be determined using an appropriate pricing model recognized over the vesting period. The cost of stock options which were granted prior to and still unvested at April 1, 2015 have been recognized at fair value and adjusted against retained earnings.

4 Other comprehensive income

Under Indian GAAP the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis and continues to follows the same methodology under Ind AS. However, while under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss, under Ind AS, re-measurements (comprising actuarial gains and losses, etc.) are charged to Retained earnings through Other Comprehensive Income.

* Specified Bank Notes collected and recorded at branches and resorts of the Company in the normal course of business have been deposited with banks across various locations.

Note No. 6 - Regrouping/reclassification:

The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/disclosure.

The financial statements of Mahindra Holidays and Resorts India Limited were approved by the Board of Directors and authorized for issue on May 19, 2017.

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Mar 31, 2016

I) In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the shares allotted to ESOP Trust including bonus shares but not exercised by the employees have been reduced from the share capital by Rs. 7,224,380 (previous year Rs. 7,546,050) and securities premium account reduced by Rs. 136,136,140 (previous year 145,180,792). The said shares will be added to the issued share capital as and when ESOP Trust issues the shares to the concerned persons on their exercising the option and till such shares are issued the amount received from ESOP Trust is disclosed under "other current liabilities".

ii) The Company has adopted the intrinsic value method in accounting for employee cost on account of ESOS for Grant I (ESOS 2006), Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) and for all the other grants, the fair value method has been adopted. The intrinsic value of the shares granted under Grant I (ESOS 2006),Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) based on the valuations obtained from an independent valuer is Rs. 16 per equity share as on 31st March, 2006, Rs. 52 per equity share as on 1st January 2007, 31st August 2008 and 1st November 2008, based on the Discounted Cash Flow Method. The fair value of the shares granted under Grant VI (ESOS 2006), Grant VII (ESOS 2006), Grant VIII (ESOS 2006), Grant IX (ESOS 2006) and Grant III (ESOS 2014) based on the fair value market price is Rs. 370, Rs. 323, Rs. 323, Rs. 253 and Rs. 370 per share respectively. As the difference between the intrinsic value/fair value and the exercise price per share is Rs. Nil, no employee compensation cost has been charged.

iii) In respect of the options granted under the Grant I (ESOS 2014) and Grant II (ESOS 2014) of Employee Stock Option Plan, in accordance with guidelines issued by SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over the period between the date of grant of options and the date of vesting. Consequently, employee compensation cost include Rs. 1,745,456 (previous year Rs. 238,374) being the amortisation of deferred employee compensation.

iv) Fair Value of options based on Black Scholes option pricing model :

(a) The fair value of options based on the valuation of the independent valuer for Grant I (ESOS 2006), Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) as of the respective dates of grant i.e. 15th July 2006, 30th March 2007, 1st November 2007 and 1st November 2008 is Rs. 4.28, Rs. 16.36, Rs. 16.55 and Rs. 16.04 respectively.

(b) "The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. 21st February 2012 is Rs. 113.81 for Grant VI (ESOS 2006), Rs. 129.93 for Grant VII (ESOS 2006), 21st February 2013 is Rs. 94.43 for Grant VIII (ESOS 2006), 29th January 2014 is Rs. 83.75 for Grant IX (ESOS 2006), 22nd January 2015 is Rs. 97.24 for Grant I (ESOS 2014), 27th October 2015 is Rs. 158.85 for Grant II (ESOS 2014), 18th February 2016 is Rs. 126.91 for Grant III (ESOS 2014)."

(D) Other matters under appeal:

i) Property Related:

(a) The Government of Kerala through the Sub Collector, District of Devikulam issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company has fled an appeal before the Commissioner of Land Revenue, Trivandrum against the said Order stating that the Patta issued does not specify that the land should be used only for agricultural purpose. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal fled by the Company and cancelled the assignment of land underlying the Munnar Resort and further directed repossession of land on the ground that it is agricultural land and cannot be used for commercial purposes. The Company has fled a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(b) With respect to the land underlying the resort at Tungi:

The Collector Pune, vide his order, has cancelled the Non-Agricultural ("NA") status of the land. Against this order, the Company has fled an appeal before the Additional Divisional Commissioner (ADC), Pune challenging the cancellation of the NA status of the land. The matter is pending for orders. The Company has also fled a Civil Suit at Civil Court, Pune against the State of Maharashtra and others, inter alia, seeking declaration that the proceedings and orders in respect of the cancellation of the NA status of the land underlying the resort property at Lonavala are not enforceable and sought other reliefs. An ad-interim stay has been granted against the State of Maharashtra and the Collector, Pune, not to give effect to the orders of NA cancellation and the matter is pending for further hearing;

In respect of certain claims of a neighboring property owner, the Company has fled a suit in the Civil Court, Pune seeking inter-alia permanent injunction against him disturbing the possession of the Company''s resort property at Lonavala, Maharashtra and obtained an ad-interim stay. In another development, notwithstanding these proceedings, the neighboring property owner obtained an order from the local Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the said order of the Mamlatdar. All matters with respect to the neighboring property owner are currently pending before the Civil Court, Pune.

(c) Pursuant to a "public interest litigation" fled before the Gujarat High Court, the officials of the Forest and Revenue departments undertook an inspection of all resorts (including the Company''s resort) at Gir in March 2015. Consequently, the Forest Department has alleged certain irregularities and sealed some structures / rooms in April 2015. The Company has denied the alleged violations and made its representations before a Committee constituted by the Gujarat High Court and the matter is pending hearing.

None of the matters contained in (a) to (c) above affect the routine operations of the resorts.

ii) Others:

(a) The Company had engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed Rs. 125,614,668 as damages for termination of the Contract. The Company has made a counter claim of Rs. 200,356,002 towards liquidated damages and other losses. The matter is pending before the Arbitrator.

(b) The Regional Provident Fund Commissioner, Chennai had issued Summons initiating proceedings under Section 7A of the Employees Provident Fund Act for failing to remit contributions on allowances relating to employees for the period from March 2011 to Feb 2013 in respect of Indian employees and from April 2010 to Feb 2013 in respect of international employees. The PF Authorities have made a claim of Rs. 18,993,169. The Company has fled a Writ Petition No 2408/2014 before the Madras High Court and the Court has granted an Interim stay of the above proceedings.

(c) With respect to member complaints pending before various consumer for a and other matters: Estimated amount of claims Rs. 94,901,717/- (previous year: Rs. 82,650,033/-).

1. Employee Benefits:

1.1 Defined benefit plans

The Company has a funded Gratuity Scheme for its employees and gratuity liability has been provided based on the actuarial valuation done at the year end.

2. Segment Reporting:

The Company is primarily engaged in the business of sale of Vacation Ownership and other related services in India. As such, the Company operates in a single segment and there are no separate business and geographic reportable segments for the purpose of Accounting Standard 17 on Segment Reporting.

3. Expenditure on Corporate Social Responsibility:

As per Section 135 of the Companies Act, 2013, the Company needs to spend 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company has incurred CSR expenditure on activities specified in Schedule VII of the Companies Act, 2013.

a. Gross amount required to be spent by the Company during the year is Rs. 27,189,781/-

4. Details of Amalgamations and Arrangements:

In terms of the Scheme of Amalgamation and Arrangement, (''the Scheme''), erstwhile Competent Hotels Private Limited, Divine Heritage Hotels Private Limited and Holiday on Hills Resorts Private Limited, wholly owned subsidiaries of the Company (referred to as ''transferor companies''), engaged in the business of rendering resort facilities) have been merged with the Company (''Transferee Company''), upon which the entire business, including all assets, liabilities and reserves of the Transferor Companies stand transferred to and vested in the Transferee Company. The amalgamation has been accounted under the ''pooling of interest method''and the assets and liabilities transferred have been recorded at their book values as on the Appointed Date.

The Scheme fled by the Company has been approved by the Hon''ble High Courts of judicature at New Delhi, Rajasthan (Jaipur Bench), Himachal Pradesh (Shimla) and Chennai with an Appointed Date of April 1, 2015 and effective date of March 31, 2016 (''the Efective Date''), being the date on which all the requirements under the Companies Act, 2013 have been completed.

There was no allotment of shares to the Transferor Companies''equity shareholders since the Transferor Companies were wholly owned subsidiaries of the Company.

Details of Amalgamations and Arrangements during the previous year:

In terms of the Scheme of Amalgamation and Arrangement, (''the Scheme''), the erstwhile Bell Tower Resorts Private Limited (a wholly owned subsidiary of the Company)(referred to as ''Transferor Company''), had been merged with the Company (''Transferee Company''), upon which the entire business, including all assets and liabilities of the Transferor Company stood transferred to and vested in the Transferee Company. The amalgamation had been accounted under the ''pooling of interest method''and the assets and liabilities transferred were recorded at their book values as on the Appointed Date.

The Scheme fled by the Company had been approved by the Hon''ble High Court of Bombay at Goa on May 2,2014 and by the Hon''ble High Court of Madras on June 23, 2014 with the Appointed Date of April 1, 2013 and an effective date of July 31, 2014 (''the Effective Date''), being the date on which the copies of the orders of the Hon''ble High Court has been fled with the Registrar of Companies.

There was no allotment of shares to the Transferor Company''s equity shareholders since the Transferor Company was a wholly owned subsidiary of the Company.

5. The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/ disclosure. The figures are not comparable with the previous year on account of the amalgamations that were given effect to in the current year.

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Mar 31, 2015

1 a) Shares in the company held by each shareholder holding more than 5% shares specifying the number of shares held.

1 b) i) Under the Employee Stock Option Scheme (ESOS 2006) equity shares are allotted to the Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust (the trust) set up by the Company. The trust holds these shares for the benefit of the eligible Employees/Directors as defined under the scheme and transfers these shares to them as per the recommendation of the remuneration committee.

ii) During the year the Company formulated the Employee Stock Option Scheme (ESOS 2014), under which the company proposed to issue and allot the shares either directly or to the existing Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust (the trust). To the extent allotted, the trust would hold these shares for the benefit of the eligible Employees/Directors as defined under the scheme and would transfer the shares to them as per the recommendation of the remuneration committee.

iii) The details of the Employees'' Stock Option Schemes are as under:

Type of Arrangement :

ESOS 2006 - Equity settled option plan administered through Employee Stock Option Trust.

ESOS 2014 - Equity settled option plan issued directly/administered through Employee Stock Option Trust.

Method of Settlement :

By issue of shares at Exercise Price.

Note (a) 35%,30%,15%,10% and 10% on expiry of 12,24,36,48 and 60 months from the date of grant respectively. Note (b) Minimum of 100 and a miximum of all the options vested but not exercised till that date.

iv) Summary of Stock options (including bonus shares) Issued out of lapsed options. Out of the above 90,000 shares have been issued out of lapsed options. Out of the above 86,500 shares have been issued out of lapsed options.

v) In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the shares allotted to the trust including bonus shares but not excercised by the employees have been reduced from the share capital by Rs. 7,546,050 and securities premium account reduced by Rs. 145,180,792. The said shares will be added to the issued share capital as and when the trust issues the shares to the concerned persons on their exercising the option and till such shares are issued the amount received from the trust is disclosed under "other current liabilities".

vi) The Company has adopted the intrinsic value method in accounting for employee cost on account of ESOS for Grant I (ESOS 2006), Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) and for all the other grants fair value method adopted. The intrinsic value of the shares granted under Grant I (ESOS 2006),Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) based on the valuations obtained from an independent valuer is Rs. 16 per equity share as on 31st March, 2006, Rs. 52 per equity share as on 1st January, 2007, 31st August, 2008 and 1st Novmeber 2008, based on the Discounted Cash Flow Method. The fair value of the shares granted under Grant VI (ESOS 2006),Grant VII (ESOS 2006), Grant VIII (ESOS 2006) and Grant IX (ESOS 2006) based on the fair value market price is Rs. 370, Rs. 323, Rs. 323 and Rs. 253 per share respectively. As the difference between the intrinsic value/fair value and the exercise price per share is Rs. Nil, no employee compensation cost has been charged.

vii) In respect of the options granted under the Grant I (ESOS 2014) of Employee Stock Option Plan, in accordance with guidelines issued by SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over the period between the date of grant of options and the eligible dates for conversion into equity shares. Consequently, employee compensation cost include Rs. 238,374 (previous year nil) being the amortisation of deferred employee compensation.

viii) Fair Value of options based on Black Scholes option pricing model:

The fair value of options based on the valuation of the independent valuer for Grant I (ESOS 2006), Grant II (ESOS 2006), Grant III (ESOS 2006) and Grant V (ESOS 2006) as of the respective dates of grant i.e. 15th July 2006, 30th March 2007, 1st November 2007 and 1st November 2008 is Rs. 4.28, Rs. 16.36, Rs. 16.55 and Rs. 16.04 respectively.

The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. 21st February 2012 is Rs. 113.81 for Grant VI (ESOS 2006), Rs. 129.93 for Grant VII (ESOS 2006), 21st February 2013 is Rs. 94.43 for Grant VIII (ESOS 2006), 29th January 2014 is Rs. 83.75 for Grant IX (ESOS 2006) and 22nd January 2015 is Rs. 97.24 for Grant I (ESOS 2014).

Had the Company adopted the fair value method in respect of options granted, the total amount that would have been amortised over the vesting period is Rs. 167,679,000 and the impact on the financial statements would be:

Previous years'' figures have been regrouped to reflect the re-alignment of options granted between normal and bonus shares with consequential adjustments to Securities Premium Account, General Reserve Account and amounts due from ESOP Trust Account.

Trade payable are dues in respect of goods purchased and services rendered in the normal course of business.

The particulars regarding dues to Micro enterprises and small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. There are no dues payable to such parties as at the balance sheet date. * **

* There are no amounts due and outstanding to be transferred to Investor Education and Protection Fund as at March 31,2015.

** Other payables mainly represent the Commission payable to non-whole time directors, amounts received from ESOP Trust on issue of shares, provision for estimated cost of offers made to members on acquisition, deferred rent on rent equalization under AS-19, renovation and pre-opening expenses in respect of resorts.

a) The preference shares of Guestline Hospitality Management and Development Services Limited will be redeemed at par at the option of the investee at any time after five years but before twenty years from the date of allotment viz 14.01.2003 or at the option of the holder be convertible into fully paid equity shares of the face value of Rs. 10/- each anytime after thirty six months from the date of allotment.

b) On June 18, 2014, the Company acquired the entire share capital of Competent Hotels Private Limited (CHPL) from the existing shareholders and consequent to this, CHPL has become a wholly owned Subsidiary of the Company.

c) On June 26, 2014, the Company subscribed to the entire share capital of MHR Holdings (Mauritius) Limited (MHRML).

Others include outstanding for less than six months from the date they are due for payment and amounts due within one year from the date of Balance Sheet.

2.1 Pursuant to entitlement fee being recognised from the year of admission of each member as against from the year of entitlement, there has been an increase in revenue in current year amounting to Rs. 73,068,129. Also refer note no. 46 for adjustments relating to past periods.

2.2 These services have been rendered only upto October 31, 2014.

The company has been securitising amounts receivable including future interest receivable thereon. The excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognised as income from Securitisation.

3 Contingent Liabilities As at March 31st Particulars 2015 2014

(A) Receivables securitised, with recourse.

Certain specified Receivables have 1,867,971,631 2,689,790,487 been securitised with a bank for availing finance In case a member defaults in payment to the bank, the bank would have recourse to the company. In such cases, the company has recourse to the customer.

(B) Claims against the company not acknowledged as debts

1) Luxury tax claimed on members'' stay at 251,052,544 74,671,145 resorts (inclusive of penalty)

2) Service tax claimed on interest on 638,770,100 638,770,100 instalments and other items (inclusive of penalty where quantified in demand) Interest (estimated) [Rs 120,780,224 (2014: Rs 120,780,224)

3) Income tax matters in dispute

(a) Pertaining to Revenue Recognition 1,978,570,362 2,033,473,937 (timing differences)* Assessment Years 1998-99 to Assessment Year 2003-04 and Assessment Year 2005-06 to Assessment Year 2009-10 The matter has been decided in favour of the Company by the appellate authorities, the Department has filed an appeal before the Madras High Court; Tax (excluding interest)

Assessment Years 2004-05 and Assessment Year 2010-11 to Assessment Year 2012-13

Company''s appeal before the CIT(A) is 2,753,180,338 1,824,923,160 pending; Tax (including interest of Rs 716,762,503)

b) Pertaining to other matters (mainly timing differences)*

From Assessment Year 2004-05 onwards 324,338,723 283,720,946 Company''s appeal before Appellate authorities is pending; Tax (including interest of Rs 76,297,746)

* For matters pertaining to timing differences, if liability were to crystalise, there would be future tax benefits, except to the extent of tax rate differences and interest,if any.

Notes:

1) The above amounts are based on demands raised, which the Company is contesting with the concerned authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the company''s rights for future appeals. No reimbursements are expected.

2) In respect of above matters, it is not practicable for the Company to estimate the closure of these issues and the consequential timing of cash flows if any; the Company has also been legally advised that the consequential impact of matters referred in 1 and 2 above in respect of assessments remaining to be completed may not be material.

(C) Guarantees given by the company for subsidiaries Value in foreign currency

Amount of Guarantee given (EURO) 11,200,000 -

Outstanding amount against Guarantee (EURO) 10,924,562 -

Value in INR

Amount of Guarantee given 757,736,000 -

Outstanding amount against Guarantee 739,101,242 -

(D) Other matters under appeal

i) Property Related

(a) The Government of Kerala issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company has filed an appeal before the Commissioner of Land Revenue against the Order stating that the patta issued does not specify that the land should be used only for agricultural purpose and also obtained a Stay Order from the Kerala High Court against eviction from the property.

The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company against the Order of the Sub-Collector, District of Devikulam dated July 3, 2007 cancelling the assignment of land underlying the Munnar Resort and directing repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(b) With respect to the land underlying the resort at Tungi, the Sub-Divisional Magistrate, Maval, vide order dated 6th June, 2014 suspended the boarding and lodging license of the resort. The Company has filed an appeal before the Collector, Pune, and obtained a stay against the suspension. The final order in respect of this matter is awaited. The Company also filed an appeal before the Additional Divisional Commissioner Pune, challenging the cancellation of the "Non Agricultural" status of the land and obtained a stay against the cancellation. The matter is pending hearing and disposal.

With respect to certain claims of a neighbouring property owner, the Company filed a suit in the Civil Court, Pune seeking inter-alia permanent injunction against him disturbing the possession of the Company and obtained an ad-interim stay. In another development, notwithstanding these proceedings, the neighbouring property owner obtained an order from the Mamlatdar''s Court for alleged access to his property through the resort property. The Company obtained a stay against the order aforesaid and all matters with respect to the neighbouring property owner are currently pending before the Civil Court, Pune.

(c) Pursuant to a "public interest litigation" filed before the Gujarat High Court, the officials of the Forest and Revenue departments undertook an inspection of all resorts (including the Company''s resort) at Gir in March 2015. Consequently, the Forest Department has alleged certain irregularities and sealed some structures / rooms in April 2015. The Company has denied the alleged violations and made its representations before a Committee constituted by the Gujarat High Court and the matter is pending hearing .

None of the matters contained in (a) to (c ) above affect the routine operations of the resorts.

(ii) The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed Rs.12,56,14,668 as damages for termination of the Contract. The Company has made a counter claim of Rs.20,03,56,002 towards liquidated damages and other losses. The matter is pending before the Arbitrator.

(iii) The Regional Provident Fund Commissioner, Chennai had issued Summons initiating proceedings under Section 7A of the Employees Provident Fund Act for failing to remit contributions on allowances relating to employees for the period from March 2011 to Feb 2013 in respect of Indian employees and from April 2010 to Feb 2013 in respect of international employees. The PF Authorities have made a claim of Rs.1,89,93,169. The Company has filed a Writ Petition No 2408/2014 before the Madras High Court and the Court has granted an Interim stay of the above proceedings.

(iv) With respect to member complaints pending before various consumer fora and other matters: Estimated amount of claims Rs. 8,26,50,033 (previous year: Rs. 5,51,20,252).

4 (i) The company did not have material foreseeable losses on long-term contracts.

(ii) The company did not enter into any derivative contracts during the year.

During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company revised the estimated useful life of some of its assets to align the useful life with those specified in Schedule II. The details of previously applied depreciation method, rates / useful life are as follows:

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs. 102,610,025 (net of deferred tax Rs. 52,836,157) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

The depreciation expense in the Statement of Profit and Loss for the year is higher by Rs. 219,172,670 consequent to the change in the useful life of the assets.

5 Employee Benefits

The following table sets out the funded status of the defined benefit scheme and amount recognised in the financial statements.

6 Segment Reporting:

The Company has a single reportable segment namely sale of Vacation Ownership and other services for the purpose of Accounting Standard 17 on Segment Reporting. Business segment is considered as the primary segment.

7 The Company has taken certain properties under operating lease and those leases are cancellable in nature. Accordingly, no disclosure has been given in this regard.

8 Related Party Transactions:

(i) Names of related parties and nature of relationship where control exists:

A. Holding Company : Mahindra & Mahindra Limited

B. Subsidiary Companies :

Mahindra Hotels & Residences India Limited

Divine Heritage Hotels Private Limited

Gables Promoters Private Limited

Holiday on Hills Resorts Private Limited

Competent Hotels Private Limited

Bell Tower Resorts Private Limited (till March 31, 2014)

Mahindra Holidays and Resorts USA Inc. (till May 19, 2014)

Heritage Bird (M) Sdn Bhd.

Infinity Hospitality Group Company Limited *

MH Boutique Hospitality Limited **

MHR Holdings (Mauritius) Limited Covington S.a.r.l***

C. Associate Companies : Holiday Club Resorts Oy

D. Fellow Subsidiaries with whom the company has transactions during the year :

Bristlecone Inc

Bristlecone India Limited

Defence Land Systems India Limited

EPC Industries Limited

Mahindra Automobile Distributor Private Limited

Mahindra Consulting Engineers Limited

Mahindra Defence Systems Limited

Mahindra Engineering Services Limited

Mahindra EPC Services Private Limited

Mahindra First Choice Services Limited

Mahindra First Choice Wheels Limited

Mahindra Integrated Township Limited

Mahindra Intergrated Business Solutions Private Limited

Mahindra Intertrade Limited

Mahindra Life Space Developers Limited

Mahindra Logistics Limited

Mahindra Navistar Automatives Limited

Mahindra Residential Developers Limited

Mahindra Retail Private Limited

Mahindra Reva Electric Vehicles Private Limited

Mahindra Shubhlabh Services Limited

Mahindra Solar One Private Limited

Mahindra Steel Services Centre Limited

Mahindra Two Wheelers Limited

Mahindra World City (Jaipur) Limited

Mahindra World City Developers Limited

Mahindra World School

Tech Mahindra Limited

E. Other entities under the control of the company :

Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust

F. Entity in which the company has joint control :

Arabian Dreams Hotels Apartments LLC

G. Key Management Personnel :

Mr. Rajiv Sawhney (Managing Director & CEO till March 31, 2014)

Mr. Kavinder Singh (Managing Director & CEO from November 3, 2014)

Mr. Dinesh Shetty (Company Secretary)

Mr. S Krishnan (Chief Financial Officer)

Mr. S Krishnan (Executive Director & Chief Financial Officer from January 22, 2015)

* By virtue of management control. Further MH Boutique Hospitality Limited holds balance 51% equity. ** By virtue of management control.

*** Step down subsidiary.

9 During the year, the Company incurred an aggregate amount of Rs. 30,397,176 towards corporate social responsibility in compliance of Section 135 of the Companies Act 2013 read with relevant schedule and rules made thereunder.

10 Scheme of Amalgamation and Arrangement

a i. In terms of the Scheme of Amalgamation and Arrangement, (''the Scheme''), the erstwhile Bell Tower Resorts Private Limited (a wholly owned subsidiary of the Company, which was engaged in the business of rendering resort facilities )(referred to as ''Transferor Company''), has been merged with the Company (''Transferee Company''), upon which the entire business, including all assets , liabilities and reserves of the Transferor Company stand transferred to and vested in the Transferee Company. The amalgamation has been accounted under the ''pooling of interest method'' and the assets and liabilities transferred have been recorded at their book values as on the Appointed Date .

The Scheme filed by the Company has been approved by the Hon''ble High Court of Bombay at Goa on May 2,2014 and by the Hon''ble High Court of Madras on June 23, 2014 with the Appointed Date of April 1, 2013 and an effective date of July 31, 2014 (''the Effective Date''), being the date on which the copies of the orders of the Hon''ble High Court has been filed with the Registrar of Companies.

The current year figures are to that extent not strictly comparable to those of previous year.

ii. There was no allotment of shares to the Transferor Company''s equity shareholders since the Transferor Company was a wholly owned subsidiary of the Company.

iii. Details of assets and liabilities and deficit in statement of profit and loss acquired on amalgamation and treatment of the difference between the Share capital of the transferror company and cost of investment in the books of the Transferee Company are listed below :

b The loss of the transferor company for the year ended March 31, 2014 has been adjusted against the Surplus in Statement of Profit and Loss at the beginning of the year.

11 Exceptional item represents a net debit of Rs. 218,797,194 written off consequent to adjustments relating to past periods, made to the balances carried forward under Receivables as at the year end, in the Deferred Service Tax Account, Deferred Interest Account and other accounts, aggregating to Rs. 737,373,047 (debit) and the Deferred Entitlement Fee Account amounting to Rs. 518,575,853 (credit). These adjustments are arising from the reconciliation exercise carried out by the company of these accounts necessitated, inter-alia, due to the migration of underlying data to the ERP system implemented in the previous financial years, and Management''s decision to recognize the entitlement fee commencing from the year of admission of each member as against from the year of entitlement.

12 On May 19 2014, Mahindra Holidays and Resorts USA Inc., wholly owned subsidiary of the company was dissolved voluntarily.

13 The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/ disclosure.

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Mar 31, 2014

1 Corporate Information

The company was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.

Note 2 : Share Capital

a) Terms / rights attached to equity shares:

i) The company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each holder of equity share is entitled to one vote per share.

ii) The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

iii) For the year ended March 31, 2014, the amount of dividend proposed to be distributed to equity shareholders is Rs. 355,123,424 at Rs. 4 per share (Previous year Rs. 355,123,424 at Rs. 4 per share).

iv) Repayment of capital will be in proportion to the number of equity shares held.

v) The fair value of options based on the valuation of the independent valuer for grants I to III and V as of the respective dates of grant i.e. 15th July 2006, 30th March 2007, 1st November 2007 and 1st November 2008 is Rs. 4.28, Rs. 16.36, Rs. 16.55 and Rs. 16.04 respectively.

The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. 21st February 2012 is Rs. 113.81 for grant VI and Rs. 129.93 for grant VII, 21st February 2013 is Rs. 94.43 for grant VIII, 29th January 2014 is Rs. 83.75 for grant IX.

3 Contingent Liabilities In Rs.

As at March 31,

2014 2013

(A) Receivables securitised, with recourse Certain specified Receivables have been securitised with a bank for availing 2,689,790,487 3,844,877,592 finance. In case a member defaults in payment to the bank, the bank would have recourse to the company. In such cases, the company has recourse to the customer.

(B) Claims against the company not acknowledged as debts

1) Luxury tax claimed on membership, room revenue and other services 74,671,145 72,350,714 provided to members, which has been disputed by the company.

2) Service tax demands for various years disputed by the company. 638,770,100 589,846,508

3) Income tax matters

(a) Time share income

i) The Income Tax Department''s appeal against the orders of the CIT(A) for the assessment years 1998-99 to 2003-04 and 2005-06 to 2009-10 in respect of issues relating to revenue recognition, was decided in favour of the Company by the Appellate Tribunal . Amount under dispute was Rs. 2,710,025,658 (including interest of Rs. 676,551,721).

ii) For the assessment years 2004-05, 2010-11 & 2011-12, the company''s appeal is pending with CIT(A). The amount of demand is Rs. 1,824,923,160/- (including interest of Rs. 475,881,114/-)

(b) Other matters disputed which are timing differences

Demand raised on account of disallowance of expenditure during construction, software expenses, website development expenses, renovation expenses and project design cost Rs. 160,641,473/- (including interest of Rs. 36,348,559/-). As at March 31, 2013 Rs. 142,707,705 (including interest of Rs. 32,469,862).

However even if these liabilities crystalise, there would be future tax benefits available on account of timing dif erences, except on the outcome of the appeals

(c) Other disallowances

Interest on other disallowces included in the contingent liability is 123,079,473 115,055,341 Rs. 30,254,625 (as at March 31, 2013 Rs. 26,616,570) The above are exclusive of consequential ef ect of similar matters in respect of the assessments remaining to be completed. The above amounts are based on demands raised, which the company is contesting with the concerned authorities. Outfl ows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the company''s rights for future appeals. No reimbursements are expected.

(C) Other matters under appeal

(i) The Government of Kerala issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company has filed an appeal before the Commissioner of Land Revenue against the Order stating that the patta issued does not specify that the land should be used only for agricultural purpose and also obtained a Stay Order from the Kerala High Court against eviction from the property. The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company against the Order of the Sub-Collector, District of Devikulam dated July 3, 2007 cancelling the assignment of land underlying the Munnar Resort and directing repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(ii) The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed Rs. 12.56 Crores as damages for termination of the Contract. The Company has made a counter claim of Rs. 20.03 Crores towards liquidated damages and other losses. The matter is pending before the Arbitrator.

(iii) The Regional Provident Fund Commissioner, Chennai had issued Summons initiating proceedings under Section 7A of the Employees Provident Fund Act for failing to remit contributions on allowances relating to employees for the period from March 2011 to Feb 2013 in respect of Indian employees and from April 2010 to February 2013 in respect of international employees. The PF Authorities have made a claim of Rs. 1.89 Crores. The Company has filed a Writ Petition before the Madras High Court and the Court has granted an Interim stay of the above proceedings.

4 Employee benefits

The following table sets out the funded status of the defi ned benefit scheme and amount recognised in the financial statements.

5 In June 2009, the Company made an Initial Public Of er of 58,96,084 equity shares of Rs. 10 each for cash at a premium of Rs. 290 per equity share, aggregating to Rs. 17,688.25 lacs of which Rs. 16,242.51 lacs were utilised for construction of resorts and Rs. 1,445.74 lacs towards issue expenses.

6 On April 12, 2013, the Company allotted 41,41,084 equity shares of Rs. 10 each for cash at a premium of Rs. 245 per equity share aggregating to Rs. 10,559.76 lakhs, pursuant to shares issued under an Institutional Placement Programme (IPP). Out of the total proceeds, the Company has spent Rs. 308.78 lakhs towards issue expenses, Rs. 7,313.68 lakhs towards capital expenditure and the balance has been invested in debt schemes of mutual funds/Fixed Deposits with Bank/ lying in bank account.

7 The particulars regarding dues to Micro enterprises and small enterprises have been determined to the extent such parties have been identifi ed on the basis of information available with the Company. This has been relied upon by the auditors. There are no dues payable to such parties as at the balance sheet date.

8 Related Party Transactions:

(i) Names of related parties and nature of relationship where control exists:

A. Holding Company Mahindra & Mahindra Limited

B. Subsidiary Companies

Mahindra Holidays and Resorts USA Inc.

Mahindra Hotels & Residences India Limited

MHR Hotel Management GmbH (till 29th November, 2013)

Heritage Bird (M) Sdn Bhd.

Bell Tower Resorts Private Limited

BAH Hotelanlagen AG (till 29th November, 2013)

Divine Heritage Hotels Private Limited

Gables Promoters Private Limited

Holiday on Hills Resorts Private Limited

Infi nity Hospitality Group Company Limited *

MH Boutique Hospitality Limited **

C. Fellow Subsidiaries with whom the

company has transactions during the year

Mahindra Intertrade Limited

Mahindra Consulting Engineers Limited

Mahindra First Choice Wheels Ltd

Mahindra First Choice Services Limited

Mahindra Navistar Automotives Limited.

Mahindra Reva Electric Vehicles Private Limited

Mahindra Lifespace Developers Limited

Mahindra Retail Private Limited

Mahindra Two Wheelers Limited

Mahindra Vehicle Manufacturers Limited

Mahindra Shubhlabh Services Limited.

Mahindra Automobile Distributor Private Limited

Mahindra EPC Services Private Limited

Mahindra Engineering Services Limited

Mahindra Steel Service Centre Limited

Mahindra Logistics Limited

Bristlecone Inc.

Bristlecone India Limited.

Defence Land Systems India Private Limited

EPC Industries Limited

Mahindra Defence Systems Limited

Mahindra Integrated Township Ltd

Mahindra Integrated Business Solutions Private Limited

Mahindra Solar One P Ltd.

Mahindra Steel Services Centre Ltd

Mahindra World City (Jaipur) Ltd

Mahindra World City Developers Ltd

9 During the year, the Board of Directors at their Meeting held on 17th September, 2013 approved the Scheme of Amalgamation and Arrangement of Bell Tower Resorts Private Limited (wholly owned subsidiary) with the Company. The Scheme was approved by the share holders at the Court Convened Meeting held on 19th February 2014. The appointed date under the Scheme is 1st April, 2013 and the Scheme will be effective upon the filling of certified copies of the Orders of the High Court of Madras & High Court of Bombay at Goa with respective Registrar of Companies. The Company has obtained the approval of the High Court of Bombay at Goa,while the approval of High Court of Madras is awaited. Consequently no impact of the Scheme has been given in the financial statements for the year ended 31st March, 2014.

10 The Board of Directors at their Meeting held on 29th January, 2014 has resolved to liquidate by way of voluntary dissolution of its wholly owned subsidiary company in USA, Mahindra Holidays and Resorts USA Inc., subject to requisite approvals in USA. Accordingly, the subsidiary is in the process of completing the voluntary dissolution formalities and the impact on account of this on the operations of the Company is immaterial.

11 The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/ disclosure.

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Mar 31, 2013

1 Corporate information

The company was incorporated on September 20, 1996, and is in the business of selling vacation ownership and providing holiday facilities.

2 Securitisation

The company has been securitising amounts receivable including future interest receivable thereon. The excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognised as income from Securitisation.

3 Segment Reporting:

The Company has a single reportable segment namely sale of Vacation Ownership and other services for the purpose of Accounting Standard 17 on Segment Reporting. Business segment is considered as the primary segment.

4 In June 2009, the company made an Initial Public Offer of 5,896,084 equity shares of Rs. 10 each for cash at a premium of Rs. 290 per equity share, aggregating to Rs. 17,688.25 lakhs of which Rs. 16,205.68 lakhs have been spent towards the object of the issue (Rs 14,759.94 lakhs were utilised for construction of resorts and Rs. 1,445.74 lakhs towards issue expenses) and the balance has been invested in debt schemes of mutual funds.

5 The particulars regarding dues to Micro enterprises and small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. There are no dues payable to such parties as at the balance sheet date.

6 Related party Transactions:

(i) Names of related parties and nature of relationship where control exists:

A. Holding Company Mahindra & Mahindra Limited

B. Subsidiary Companies Mahindra Holidays and Resorts USA Inc.

Mahindra Hotels & Residences India Limited

MHR Hotel Management GmbH

Heritage Bird (M) Sdn Bhd.

Bell Tower Resorts Private Limited

BAH Hotelanlagen AG

Divine Heritage Hotels Private Limited

Gables Promoters Private Limited

Holiday on Hills Resorts Private Limited Infinity Hospitality Group Company Limited *

MH Boutique Hospitality Limited **

C. Fellow Subsidiaries with whom the company has transactions during the year

Mahindra Intertrade Limited

Mahindra Consulting Engineers Limited

Mahindra First Choice Wheels Ltd

Mahindra First Choice Services Limited

Mahindra Navistar Automotives Limited.

Mahindra Reva Electric Vehicles Private Limited

Mahindra Lifespace Developers Limited

Mahindra Retail Private Limited

Mahindra Two Wheelers Limited

Mahindra Vehicle Manufacturers Limited

Mahindra Shubhlabh Services Limited.

Mahindra Automobile Distributor Private Limited

Mahindra EPC Services Private Limited

Mahindra Engineering Services Limited

Mahindra Steel Service Centre Limited

Mahindra Logistics Limited

D. Other entities under the control of the company

Mahindra Holidays & Resorts India Limited Employees'' Stock Option Trust

E. Entity in which the company has joint control

Arabian Dreams Hotels Apartments LLC

F. Key Management Personnel Mr Ramesh Ramanathan (Managing Director) (upto April 30, 2011)

Mr Rajiv Sawhney (Managing Director & CEO) (since May 1, 2011)

* By virtue of management control. Further MH Boutique Hospitality Limited holds balance 51 % equity.

** By virtue of management control

7 On 12th April, 2013 the Company through an Institutional Placement Programme (IPP) allotted 4,141,084 equity shares of Rs. 10/- each at a premium of Rs. 245/- per share aggregating to Rs.10,559.76 lacs. The Net Issue Proceeds will be utilized for expansion/renovation of existing resorts, acquisition of new land parcels/properties, construction/development of new resorts and for general corporate purposes.

8 The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/ disclosure.

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Mar 31, 2012

1 a) The above includes 48,995,228 equity shares allotted as fully paid-up by way of Bonus shares by capitalisation of balance in Statement of Profit & Loss and General Reserve on November 24, 2007 in the ratio of 5 equity shares for every 3 shares held.

1 b) Terms / rights attached to equity shares:

i) The company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each holder of equity share is entitled to one vote per share.

ii) The dividends proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.

iii) For the year ended March 31, 2012, the amount of per share dividend proposed for equity shareholders is Rs. 4. The total dividend appropriation for the year ended March 31, 2012 amounted to Rs. 393,481,836 including tax on proposed dividend of Rs.54,922,748.

iv) Repayment of capital will be in proportion to the number of equity shares held.

1 c) Under the Employee Stock Option Scheme equity shares are allotted to the Mahindra Holidays & Resorts India Limited Employees' Stock Option Trust (the trust) set up by the company. The trust holds these shares for the benefit of the eligible employees/Directors as defined under the scheme and issues the shares to them as per the recommendation of the remuneration committee.

** Issued out of lapsed options.

# Out of the above 90,000 shares has been issued out of lapsed options.

## Out of the above 86,500 shares has been issued out of lapsed options.

iii) In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the shares allotted to the trust including bonus shares but not allotted to the employees have been reduced from the share capital by Rs. 7,941,680 and securities premium account reduced by Rs. 145,676,908. The said shares will be added to the issued share capital as and when the trust issues the shares to the concerned persons on their exercising the option and till such shares are issued the amount received from the trust is disclosed under current liabilities

The General Reserve has been reduced by Rs. 1,314,290 for bonus shares issued on exercise of stock options during the year.

iv) The company has adopted the intrinsic value method in accounting for employee cost on account of ESOS for grant I to V. For grant VI and VII fair value method adopted. The intrinsic value of the shares granted under grant I to V based on the valuations obtained from an independent valuer is Rs. 16 per equity share as on March 31, 2006, Rs. 52 per equity share as on January 1, 2007, August 31, 2008 and November 1, 2008 based on the Discounted Cash Flow Method. The fair value of the shares granted under grant VI and VII is based on the fair value market price is Rs. 370 and Rs. 323 per share respectively. As the difference between the intrinsic value/fair value and the exercise price per share is Rs. Nil no employee compensation cost has been charged.

v) The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. July 15, 2006, March 30, 2007, November 1, 2007 and November 1, 2008 is Rs. 4.28, Rs. 16.36, Rs. 16.55 and Rs. 16.04 respectively.

The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. February 21, 2012 is Rs. 113.81 for grant VI and Rs. 129.93 for grant VII.

Had the company adopted the fair value method in respect of options granted, the total amount that would have been amortised over the vesting period is Rs. 10,383,964 and the impact on the financial statements would be :

1 d) As approved by the Board, the company has given an interest free loan of Rs. 132,000,000 without interest to Mahindra Holidays & Resorts India Limited Employees Stock Option Trust for the purchase of shares of the company under the employee stock option scheme.

NOTE:

a) The preference shares of Guestline Hospitality Management and Development Services Limited will be redeemed at par at the option of the investee at any time after five years but before twenty years from the date of allotment viz January 14, 2003

b) The preference shares of Guestline Hospitality Management and Development Services Limited shall at the option of the holder be convertible into fully paid equity shares of the face value of Rs. 10 each anytime after thirty six months from the date of allotment.

c) On December 21, 2011, the Company has acquired the entire share capital of Bell Tower Resorts Private Limited (BTRPL) from the existing shareholders and consequent to that BTRPL has become a wholly owned Subsidiary of the Company. This subsidiary has a 106 room resort in Goa.

2. Securitisation

The company has been securitising amounts receivable including future interest receivable thereon. The excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognised as income from Securitisation.

3. Contingent Liabilities

Rs As at As at Mar 31, 2012 Mar 31, 2011

(a) Receivables securitised, with recourse.

Certain specified receivables have been securitised with a bank 2,673,122,303 2,036,782,120 for availing finance. In case a member defaults in payment to the bank, the bank would have recourse to the company. In such cases, the company has recourse to the customer.

(b) Claims against the company not acknowledged as debts

Claims not acknowledged as debts represent luxury tax claimed 6,420,314 6,420,314 on room revenue and other services provided to members, which has been disputed by the company. The possibility of reimbursement depends on the outcome of the cases pending before the adjudicating authority.

(c) Income tax matters

i) The Income Tax Department's appeal against the orders of the CIT (A) for the assessment years 1998-99 to 2003-04, in respect of issues relating to revenue recognition, was decided in favour of the company by the appellate tribunal.

Amount involved was Rs 208,385,010 (including interest of Rs. 58,051,475).

For the assessment year 2004-05 & 2009-10 the company's appeal is pending with CIT(A) .

For the assessment years 2005-06 to 2008-09, the company has gone on appeal to the ITAT in respect of the same issue.

The amount involved, exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed, is Rs. 2,550,307,954 (Including interest of Rs. 560,448,771); As at March 31, 2011, Rs. 1,925,645,407/- (Including interest of Rs. 382,089,632).

ii) Disallowance of expenditure during construction, software expenses, website development expenses, renovation expenses and Project design cost. Rs. 110,849,237/- (Including interest of Rs. 24,029,144); As at March 31, 2011 Rs. 43,935,275/- (Including interest of Rs. 7,384,579)

The above are exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed.

However, even if these liabilities crystallise, there would be future tax benefits available on account of timing differences, except for interest and income tax rate differences. Cash outflows would depend on the outcome of the appeals.

iii) Other disallowances (including interest of Rs. 43,757,139) 193,408,965 166,844,896 (as at March 31, 2011 Rs. 9,909,258)

(d) Other matters under appeal

(i) The Government of Kerala issued an Order dated July 3, 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company has filed an appeal before the Commissioner of Land Revenue against the Order stating that the patta issued does not specify that the land should be used only for agricultural purpose and also obtained a Stay Order from the Kerala High Court against eviction from the property.

The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company against the Order of the Sub-Collector, District of Devikulam dated July 3, 2007 cancelling the assignment of land underlying the Munnar Resort and directing repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(ii) The Company had received a notice dated December 11, 2009 from Commissioner, Ooty Municipality seeking demolition of the unauthorised construction at Zest Danish Villa Resort situated at No.30, Sheddon Road, Ooty. The Company has filed a review petition before the Municipal Administration and Water Supply Department, Chennai and hearing is awaited.

(iii) The Company engaged a building contractor for construction of a resort. As the construction did not proceed as per agreed timelines the Company terminated the contract. The contractor has claimed Rs. 12.56 crores as damages for termination of the Contract. The Company has made a counter claim of Rs. 20.03 crores towards liquidated damages and other losses. The matter is pending before the Arbitrator.

h. In the absence of the relevant information from the actuary, the above details do not include the composition of plan assets / experience adjustments for certain years.

4. Segment Reporting:

The Company has a single reportable segment namely sale of Vacation Ownership and other services for the purpose of Accounting Standard 17 on Segment Reporting. Business segment is considered as the primary segment

5. In June 2009, the company made an Initial Public Offer of 5,896,084 equity shares of Rs. 10 each for cash at a premium of Rs. 290 per equity share, aggregating to Rs. 17,688.25 lakh of which Rs. 12,624.24 lakh have been spent towards the object of the issue (Rs. 11,178.50 lakh were utilised for construction of resorts and Rs. 1,445.74 lakh towards issue expenses) and the balance has been invested in debt schemes of mutual funds.

6. The particulars regarding dues to Micro enterprises and small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. There are no dues payable to such parties as at the balance sheet date.

7. Capital work in progress of Rs. 1,836,382,470 (Previous year Rs. 1,345,026,170) includes expenditure during Construction pending allocation of Rs.245, 428,002 (Previous year Rs. 151,593,864).

8. The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified, wherever necessary, to correspond with the current year's classification/ disclosure.

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Mar 31, 2011

1. Employees stock option scheme

Under the Employee Stock Option Scheme equity shares are allotted to the Mahindra Holidays & Resorts India Limited Employees Stock Option Trust (the trust) set up by the company. The trust holds these shares for the benefit of the eligible employees/Directors as defined under the scheme and issues the shares to them as per the recommendation of the remuneration committee.

In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the shares allotted to the trust including bonus shares but not allotted to the employees have been reduced from the share capital by Rs. 6,240,940 and securities premium account reduced by Rs. 4,212,960. The said shares will be added to the issued share capital as and when the trust issues the shares to the concerned persons on their exercising the option and till such shares are issued the amount received from the trust is disclosed under current liabilities.

The General Reserve has been reduced by Rs. 1,731,680 for bonus shares issued on exercise of stock options during the year.

The company has adopted the intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares based on the valuations obtained from an independent valuer is Rs. 16 per equity share as on 31st March, 2006, Rs.52 per equity share as on 1st January, 2007, 31.08.2008 and 01.11.2008 based on the Discounted Cash Flow Method. As the difference between the intrinsic value and the exercise price per share is Rs. Nil no employee compensation cost has been charged.

The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. 15th July 2006, 30th March 2007, 1st November 2007 and 1st November 2008 is Rs. 4.28, Rs. 16.36, Rs.16.55 and Rs.16.04 respectively.

Had the company adopted the fair value method in respect of options granted, the total amount that would have been amortised over the vesting period is Rs.10,383,964 and the impact on the financial statements would be :

Mahindra Holidays & Resorts India Limited

2. Secured loans

Loans and advances from a bank are secured by an exclusive charge on inventories, receivables and other moveable assets.

3. contingent Liabilities

Rs.

As at As at March 31, 2011 March 31, 2010

(a) Receivables securitised, with recourse. 2,036,782,120 2,657,820,819 Certain specified Receivables have been securitised with a bank for availing finance. In case a member defaults in payment to the bank, the bank would have recourse to the company. In such cases, the company has recourse to the customer.

(b) Claims against the company not acknowledged as debts 6,420,314 9,668,526

Claims not acknowledged as debts represent luxury tax claimed on room revenue and other services provided to members, which has been disputed by the company. The possibility of reimbursement depends on the outcome of the cases pending before the adjudicating authority.

(c) Income tax matters

(i) The Income Tax Departments appeal against the orders of the CIT(A) for the assessment years 1998-99 to 2002-03, in respect of issues relating to revenue recognition, was decided in favour of the Company by the Appellate Tribunal in May 2010. Amount involved was Rs. 116,013,707 (including interest of Rs 58,051,475). For the assessment years 2003-04 to 2008-09, the Company has gone on appeal to the CIT(A) in respect of the same issue. The amount involved, exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed, is Rs. 1925,645,407 (including interest of Rs. 382,089,632); As at 31st March, 2010, Rs. 1,315,373,266/- (including interest of Rs. 251,752,898).

(ii) Disallowance of expenditure during construction / Software expenses. Rs. 43,935,275/- (including interest of Rs. 7,384,579); As at 31st March, 2010 Rs. 35,484,928/- (including interest of Rs. 5,966,891)

The above are exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed.

However, even if these liabilities crystallise, there would be future tax benefits available on account of timing differences, except for interest and income tax rate differences. Cash outflows would depend on the outcome of the appeals.

(iii) Other disallowances (including interest of Rs. 22,633,591) 166,844,896 78,537,507 (as at 31st March, 2010 Rs. 9,909,258)

(d) Other matters under appeal

(i) The Government of Kerala issued an Order dated 3rd July 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The company has filed an appeal before the Commissioner of Land Revenue against the Order stating that the patta issued does not specify that the land should be used only for agricultural purpose and also obtained a Stay Order from the Kerala High Court against eviction from the property.

The Commissioner of Land Revenue, Trivandrum vide his Order dated November 22, 2007 dismissed the appeal filed by the Company against the Order of the Sub-Collector, District of Devikulam dated 3rd July 2007 cancelling the assignment of land underlying the Munnar Resort and directing repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company filed a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

f. In the absence of the relevant information from the actuary, the above details do not include the composition of plan assets / experience adjustment in respect of actuarial losses / gains.

g. Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotions, increments and other relevant factors such as supply and demand in the employment market

4. Segment Reporting:

The Company has a single reportable segment namely sale of Vacation Ownership and other services for the purpose of Accounting Standard 17 on Segment Reporting. Business segment is considered as the primary segment

5. Related party Transactions:

(i) Names of related parties and nature of relationship where control exists:

A. Holding Company Mahindra & Mahindra Limited

B. Subsidiary Companies Mahindra Holidays & Resorts U.S.A Inc.

Mahindra Hotels & Residences India Limited MHR Hotel Management GmbH Heritage Bird (M) Sdn Bhd. BAH Hotelanlagen AG

C. Fellow Subsidiaries with whom Mahindra Logisoft Business Solutions Limited the company has transactions Mahindra Intertrade Limited

Mahindra United Football Company Mahindra Navistar Automotives Limited Mahindra Shubhlabh Services Limited Mahindra & Mahindra Financial Services Limited Mahindra Lifespace Developers Limited Mahindra World City (Jaipur) Limited Mahindra World City Developers Limited Mahindra First choice Wheels Limited Mahindra First Choice Services Limited Mahindra Ugine Steel Company Limited Mahindra Logistics Limited Mahindra Retail Private Limited

D. Other entities under the control of the company Mahindra Holidays & Resorts India Limited ESOP Trust

E. Key Management Personnel Ramesh Ramanathan (Managing Director)

6. In June 2009, the company made an Initial Public Offer of 5,896,084 equity shares of Rs 10 each for cash at a premium of Rs 290 per equity share, aggregating to Rs 17,688.25 lacs of which Rs 11,139.20 lacs have been spent towards the object of the issue (Rs 9,693.46 lacs were utilised for construction of resorts and Rs 1,445.74 lacs towards issue expenses) and the balance has been invested in debt schemes of mutual funds.

7. The particulars regarding dues to Micro enterprises and small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

8. Previous years figures have been regrouped / recast, wherever necessary, to conform to this years classification.

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Mar 31, 2010

1. Employees’ stock option scheme

Under the Employee Stock Option Scheme equity shares are allotted to the Mahindra Holidays & Resorts India Limited Employees’ Stock Option Trust (the trust) set up by the company. The trust holds these shares for the beneft of the eligible employees/Directors as defned under the scheme and issues the shares to them as per the recommendation of the remuneration committee.

In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the shares allotted to the trust including bonus shares but not allotted to the employees have been reduced from the share capital by Rs. 9,429,110 and securities premium account reduced by Rs. 6,443,016. The said shares will be added to the issued share capital as and when the trust issues the shares to the concerned persons on their exercising the option and till such shares are issued the amount received from the trust is disclosed under current liabilities.

The General Reserve has been reduced by Rs. 2,302,890 for bonus shares issued on exercise of stock options.

The company has adopted the intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares based on the valuations obtained from an independent valuer is Rs. 16 per equity share as on 31st March, 2006, Rs.52 per equity share as on 1st January, 2007, 31.08.2008 and 01.11.2008 based on the Discounted Cash Flow Method. As the difference between the intrinsic value and the exercise price per share is Rs. Nil no employee compensation cost has been charged.

The fair value of options based on the valuation of the independent valuer as of the respective dates of grant i.e. 15th July 2006, 30th March 2007, 1st November 2007 and 1st November 2008 is Rs. 4.28, Rs. 16.36, Rs.16.55 and Rs.16.04 respectively.

Had the company adopted the fair value method in respect of options granted, the total amount that would have been amortised over the vesting period is Rs.10,383,964 and the impact on the fnancial statements would be :

3. Secured loans

Loans and advances from a bank are secured by an exclusive charge on inventories, receivables and other moveable assets. Deferred payment under hire purchase is secured by hypothecation of assets fnanced.

2. Securitisation

The company has been securitising amounts receivable including future interest receivable thereon. The excess of consideration received over the principal amounts of receivable from members (net of reversals in respect of cancelled members) is recognised as income from Securitisation.

3. Contingent Liabilities

(In Rs.) As at Mar As at Mar 31, 2010 31, 2009 (a) Receivables securitised, with recourse. 2,657,820,819 1,623,163,525 Certain specifed Receivables have been securitised with a bank for availing fnance. In case a member defaults in payment to the bank, the bank would have recourse to the company. In such cases, the company has recourse to the customer.

(b) Claims against the company not acknowledged as debts 9,668,526 9,668,526 Claims not acknowledged as debts represent luxury tax claimed on room revenue and other services which has been disputed by the company. The possibility of reimbursement depends on the outcome of the cases pending before the adjudicating authority.

(c) Income tax matters

(i) The Income Tax Department has fled appeals against the orders of the CIT(A) during FY2005-06 for the assessment years 1998-99 to 2002-03, in respect of the issues relating to revenue recognition, which were decided in favour of the Company. Amount involved with respect to this matter (including demand for the assessment years 2003-04, 2004-05 , 2005-06, 2006-07 and 2007-08 for which assessments were subsequently completed in respect of which the Company has gone/will be going on appeal. The above are exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed) is Rs. 1,315,373,266/- (including interest of Rs. 251,752,898); As at 31st March, 2009, Rs. 779,467,899/- (including interest of Rs. 137,783,499).

(ii) Disallowance of expenditure during construction/Software expenses. Rs. 35,484,928/- (including interest of Rs. 5,966,891); As at 31st March, 2009 Rs. 31,266,979/- (including interest of Rs 4,900,440) The above are exclusive of consequential effect of similar matter in respect of the assessments remaining to be completed. However, even if these liabilities crystallise, there would be future tax benefts available on account of timing differences, except for interest and income tax rate differences. Cash outfows would depend on the outcome of the appeals.

(iii) Others (including interest of Rs 9,909,258) 78,537,507 50,397,417 (as at 31st March, 2009 Rs 10,454,727)

(d) Other matters under appeal

(i) The Government of Kerala issued an Order dated 3rd July 2007 cancelling the assignment of land underlying the Munnar resort and directed repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The company has fled an appeal before the Commissioner of Land Revenue against the Order stating that the patta issued does not specify that the land should be used only for agricultural purpose and also obtained a Stay

Order from the Kerala High Court against eviction from the property.

The Commissioner of Land Revenue, Trivandrum vide his Order dated

November 22, 2007 dismissed the appeal fled by the Company against the Order of the Sub-Collector, District of Devikulam dated 3rd July 2007 cancelling the assignment of land underlying the Munnar Resort and directing repossession of land on the grounds that it is agricultural land and cannot be used for commercial purposes. The Company fled a writ petition before the Kerala High Court against the said Order and on December 13, 2007, the Court granted an interim stay of all further proceedings.

(ii) The Company had received a notice dated December 11, 2009 from Commissioner, Ooty Municipality seeking to demolish the unauthorized construction at Zest Danish Villa Resort situated at No.30, Sheddon Road, Ooty. The Company has fled a review petition before the Municipal Administration and Water Supply Department , Chennai which is awaiting hearing.

4. Segment Reporting

The Company has a single reportable segment namely sale of Vacation Ownership and other services for the purpose of Accounting Standard 17 on Segment Reporting. Business segment is considered as the primary segment

5. The year end foreign currency exposures that have not been hedged by a derivative instrument of otherwise are given below

6. The company made an initial public offer of 5,896,084 equity shares of Rs 10 each for cash at a premium of Rs 290 per equity share, aggregating to Rs 17688.25 lacs of which Rs 6,761.75 lacs have been spent towards the object of the issues (Rs 5316.01 lacs were utilised for construction of resorts and Rs 1,445.74 lacs towards issue expenses and the balance has been invested in debt schemes of mutual funds.

7. As of date, the company has not received confirmations from any suppliers who have registered under the "Micro small and Medium Enterprises Development Act 2006" and hence no disclosures have been made under the said act.

8. Previous years Figure have been regrouned/recast wherever necessary to conform to this years classification