IHCL Annual Report 2008-2009.pd - domain-b. · PDF fileThe Hongkong & Shanghai Banking...

Board of Directors

Ratan N. Tata ChairmanR. K. Krishna Kumar Vice ChairmanN. A. SoonawalaS. K. KandhariK. B. DadisethDeepak ParekhJagdish CapoorShapoor MistryNadir Godrej - (w.e.f. November 7, 2008)Arnavaz Aga - (w.e.f. November 7, 2008)Raymond N. Bickson Managing DirectorAnil P. Goel Executive Director -

FinanceAbhijit Mukerji Executive Director -

Hotel Operations

Committees of the Board

Audit CommitteeS. K. Kandhari ChairmanDeepak ParekhJagdish Capoor

Remuneration CommitteeJagdish Capoor ChairmanR. N. TataR. K. Krishna KumarN. A. Soonawala

Shareholders'/ Investor Grievance CommitteeN. A. Soonawala ChairmanR. K. Krishna KumarRaymond N. Bickson

Registered OfficeMandlik House, Mandlik Road, Mumbai 400 001.Tel: 6639 5515, Fax: 2202 7442

Share DepartmentMandlik House, Mandlik Road, Mumbai 400 001.Tel: 6639 5515, Fax: 2202 7442Email: [email protected]

Website: www.tajhotels.com

ManagementRaymond N. Bickson Managing DirectorAnil P. Goel Executive Director - Finance

Abhijit Mukerji Executive Director - Hotel Operations

Ajoy K. Misra Sr. Vice President - Sales & Marketing

H. N. Shrinivas Sr. Vice President - Human Resources

Prakash Shukla Sr. Vice President - Technology & CIO

Rajiv Gujral Chief Operating Officer andSr. Vice President -Mergers, Acquisitions & Development

Yannick Poupon Chief Operating Officer - Luxury Hotels(International)

Jyoti Narang Chief Operating Officer - Luxury Hotels(India)

P. K. Mohan Kumar Chief Operating Officer - Gateway Hotels

Veer Vijay Singh Chief Operating Officer - Premium Hotels

P. Sanker Vice President - Legal & Company Secretary

Sumit Guha Vice President - Projects &Business Development

SolicitorsMulla & Mulla & Craigie Blunt & Caroe

AuditorsDeloitte, Haskins and SellsN. M. Raiji & Company

BankersThe Hongkong & Shanghai Banking Corporation Ltd.Standard Chartered BankCitibank N. A.HDFC BankICICI Bank Ltd.

1

Annual Report 2008-2009

Contents

Highlights 3

Notice 4 - 9

Directors' Report 10 - 20

Management Discussion & Analysis 21 - 43

Corporate Governance 44 - 61

Community Initiatives 62 - 64

Break-up of Total Expenses 65

Auditors' Report 66 - 69

Balance Sheet 70

Profit and Loss Account 71

Cash Flow Statement 72

Schedules to Accounts 73 - 88

Notes to Balance Sheet and Profit and Loss Account 89 - 116

Balance Sheet Abstract and Company's General Profile 117

Statement pursuant to Section 212 118 - 119

Summary of Financial Information of Subsidiary Companies 120

Financial Statistics 121

Consolidated Financial Statements 122 - 164

The Indian Hotels Company LimitedAnnual Report 2008-2009

The Indian Hotels Company Limited

2

3


Financial Highlights

2008-09 2007-08Rupees Rupees

(In Crores) (In Crores)

Gross Revenue 1706.52 1823.16

Profit Before Tax 362.30 580.47

Profit After Tax 234.03 377.46

Dividend 86.81 114.54

Retained Earnings 226.93 328.93

Funds Employed 4984.57 3332.22

Net Worth 3046.90 2035.10

Borrowings 1766.47 1134.18

Debt : Equity Ratio 0.58:1 0.55:1

Net Worth Per Ordinary Share of Re. 1/- each 42.11 33.76

Earnings per Ordinary Share (Basic) - In Rupees 3.28 5.77

Earnings Per Ordinary Share (Diluted) - In Rupees 3.28 5.77

Dividend Per Ordinary Share 1.20 1.90

Dividend % 120% 190%


4

NOTICENOTICE is hereby given that the HUNDRED AND EIGHTH ANNUAL GENERAL MEETING of THE INDIAN HOTELSCOMPANY LIMITED will be held at the Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai 400 020, onMonday, August 3, 2009, at 3.00 p.m to transact the following business:

1. To receive, consider and adopt the Audited Profit and Loss Account for the year ended March 31, 2009 and theBalance Sheet as at that date together with the Report of the Board of Directors and the Auditors thereon.

2. To declare a dividend on ordinary shares.

3. To appoint a Director in the place of Mr. R. N. Tata who retires by rotation and is eligible for re-appointment.

4. To appoint a Director in the place of Mr. N. A. Soonawala who retires by rotation and is eligible for re-appointment.

5. To appoint a Director in the place of Mr. Deepak Parekh who retires by rotation and is eligible for re-appointment.

6. Appointment of Ms. Arnavaz Aga as a Director of the Company

To appoint a Director in place of Ms. Arnavaz Aga who was appointed as an Additional Director of the Company witheffect from November 7, 2008, by the Board of Directors and who holds office upto the date of the forthcoming AnnualGeneral Meeting of the Company under Section 260 of the Companies Act, 1956 (the Act) but who is eligible forappointment and in respect of whom the Company has received a notice in writing under Section 257 of the Act froma Member proposing her candidature, for the office of the Director of the Company.

7. Appointment of Mr. Nadir Godrej as a Director of the Company

To appoint a Director in place of Mr. Nadir Godrej who was appointed as an Additional Director of the Company witheffect from November 7, 2008 by the Board of Directors and who holds office upto the date of the forthcoming AnnualGeneral Meeting of the Company under Section 260 of the Companies Act, 1956 (the Act) but who is eligible forappointment and in respect of whom the Company has received a notice in writing under Section 257 of the Act froma Member proposing his candidature, for the office of the Director of the Company.

8. To appoint Auditors and fix their remuneration

To consider and, if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 224A and other applicable provisions, if any, of theCompanies Act, 1956, M/s Deloitte Haskins & Sells, Chartered Accountants, and M/s. N. M. Raiji & Company,Chartered Accountants, be and are hereby re-appointed as Joint Auditors of the Company, to hold office from theconclusion of this meeting until the conclusion of the next Annual General Meeting of the Company, to examine andaudit the Books of Account of the Company for the financial year 2009-10 on such remuneration as may be mutuallyagreed upon between the Board of Directors of the Company and the Auditors, plus reimbursement of service tax,out-of-pocket and travelling expenses actually incurred by them in connection with the audit.”

9. Commission to Directors other than the Managing and Whole-time Director(s) of the Company.

To consider and, if thought fit, to pass with or without modification, the following resolution as a Special Resolution :

“RESOLVED THAT pursuant to the provisions of Section 309 and other applicable provisions, if any, of the CompaniesAct, 1956, a sum not exceeding 1% per annum of the net profits of the Company calculated in accordance with theprovisions of Sections 198, 349 and 350 of the Act, be paid to and distributed amongst the Directors of the Companyor some or any of them [other than the Managing Director and the Whole-time Director(s)] in such amounts orproportions and in such a manner as may be directed by the Board of Directors of the Company and such paymentsshall be made in respect of the profits of the Company for each year of the period of five years commencing 1st April,2009.”

5


NOTES :

1. The relative Explanatory Statement, pursuant to Section 173 of the Companies Act, 1956, in respect of the businessunder Item Nos. 6 to 9 is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

3. The Register of Members and the Share Transfer Books of the Company will remain closed from Tuesday, July 21,2009 to Monday, August 3, 2009 both days inclusive.

4. The Dividend on Ordinary Shares, as recommended by the Board of Directors, if declared at the Annual GeneralMeeting, will be paid on or after August 3, 2009, to the Members whose names appear on the Company’s Register ofMembers on August 3, 2009. As regards shares held in electronic form, the dividend will be payable to the ‘beneficialowners’ of the shares whose names appear in the Statement of Beneficial Ownership furnished by the NationalSecurities Depository Limited and the Central Depository Services (India) Limited as at the close of business hourson July 20, 2009.

5. Members/Proxies should bring the Attendance Slip sent herewith duly filled in for attending the Meeting.

6. Pursuant to Sections 205A and 205C of the Companies Act, 1956, all dividends remaining unclaimed for seven yearsfrom the date they first became due for payment are now required to be transferred to the “Investor Education andProtection Fund” (IEPF) established by the Central Government under the amended provisions of the Companies Act,1956. Members shall not be able to claim any unpaid dividend from the said Fund nor from the Company thereafter. Itmay be noted that unpaid dividend for the financial year ended March 31, 2002 is due for transfer to the IEPF onAugust 17, 2009.

7. To avoid loss of dividend warrants in transit and undue delay in the receipt of dividend warrants, the Company hasprovided a facility to the Members for remittance of dividend through the Electronic Clearing System (ECS). The ECSfacility is available at locations identified by the Reserve Bank of India from time to time and covers most of the majorcities and towns. Members holding shares in a physical form and who are desirous of availing of this facility arerequested to contact the Company’s Share Department at the Registered Office of the Company.

8. Members holding shares in physical form are requested to kindly notify the Company of any change in their addressesso as to enable the Company to address future communication to their correct addresses. Members holding shares indemat form are requested to notify their respective Depository Participant of any change in their addresses.

9. Pursuant to Clause 49 of the Listing Agreement, the particulars of Directors seeking appointment/re-appointment atthe meeting are annexed.

10. Members desiring any information as regards the Accounts are requested to write to the Company Secretary at anearly date so as to enable the Management to reply at the Meeting.

11. Members are requested to kindly bring their copies of the Annual Report to the Meeting.

By Order of the Board of Directors

P. SankerVice President – Legal & Company Secretary

Mumbai, Dated: June 12, 2009

Registered Office :Mandlik House,Mandlik Road,Mumbai 400 001.


6

EXPLANATORY STATEMENTAs required by Section 173 of the Companies Act, 1956 (the Act)

1. The following Explanatory Statement sets out the material facts relating to the business under Item Nos. 6 to 9mentioned in the accompanying Notice dated June 12, 2009.

Item Nos. 6 to 7

2. The Board of Directors appointed Ms. Arnavaz Aga and Mr. Nadir Godrej as Additional Directors of the Companywith effect from November 7, 2008 pursuant to the provisions of Section 260 of the Act and Article 132 of the Articlesof Association of the Company. In terms of Section 260 of the Companies Act, 1956, Ms. Aga and Mr. Godrej holdoffice as Additional Directors up to the date of the forthcoming Annual General Meeting of the Company, but areeligible for appointment as Directors. The Company has received Notices pursuant to Section 257 of the Act, fromMembers proposing Ms. Aga and Mr. Godrej’s candidatures for the office of Director of the Company at the forthcomingAnnual General Meeting of the Company. The Board commends to the Members their appointment as Directors of theCompany.

3. Ms. Aga, holds a B.A. degree in Economics and a post graduate degree in Medical and Psychiatric Social Work fromthe Tata Institute of Social Sciences. She retired as Chairperson of Thermax Limited, the leading player in environmentand energy management, in 2004 and continues to serve as a Director. She is very active in various associations viz.Confederation of Indian Industry (CII) and has served as the Chairperson of CII’s Western Region.

4. Mr. Nadir Godrej, holds a B.S. degree in Chemical Engineering from the Massachusetts Institute of Technology anda M.S. in Chemical Engineering from Stanford University, in addition to an M B A from Harvard Business School. Heis the Managing Director of Godrej Industries Limited and the Chairman of Godrej Agrovet Limited. He has been veryactive in research, with several patents in the field of agricultural chemicals and surfactants.

5. Ms. Aga and Mr. Godrej may be deemed to be concerned and interested in Item Nos. 6 and 7 respectively, as it relatesto their appointment as Directors of the Company.

Item No. 8

6. Section 224A of the Act, provides that in the case of a public company, in which not less than 25% of the subscribedshare capital of the company, is held, whether singly or in any combination by Financial Institutions, NationalisedBanks, Insurance Companies and other Bodies specified in that Section, the appointment of Auditors is to be made byway of a Special Resolution.

7. The shareholdings of the aforesaid Financial Institutions, Nationalised Banks, etc. as on the date of the accompanyingNotice is close to 25% of the subscribed share capital of the Company and it may, by the date of the Annual GeneralMeeting, exceed 25% of the subscribed share capital of the Company. Hence, the resolution for re-appointment ofM/s Deloitte Haskins & Sells and M/s N. M. Raiji & Company, is being proposed as a Special Resolution. As requiredunder Section 224 of the Act, certificates have been received from the Auditors to the effect that their appointmentsif made, will be in accordance with the limits specified under Section 224(1B) of the Act.

8. The Members’ approval is also being sought to authorise the Board of Directors to determine the remunerationpayable to the Auditors in consultation with them. The Board commends the Resolution for approval by the Members.

9. None of the Directors of the Company is in any way, concerned or interested in the Resolution at Item No. 8 of theaccompanying notice.

7


Item No. 9

10. The Members of the Company had, at the Annual General Meeting of the Company held on 9th August, 2004,approved under the provisions of Section 309 of the Companies Act, 1956, the payment of a commission to thenon-Whole-time Directors of the Company, of an amount not exceeding 1% per annum of the net profits of theCompany computed in accordance with the provisions of the Act, for a period of five financial years of the Companycommencing 1st April, 2004. Accordingly, the Members approval for payment of such commission is available uptoand including the financial year ended on 31st March, 2009.

11. In view of the valuable services being rendered by the said Directors to the Company, it is proposed to continue topay commission not exceeding 1% per annum of the net profits of the Company to the non-Whole-time Directors ofthe Company for a further period of five years commencing 1st April, 2009, subject to the approval of the Members ofthe Company in this regard. The amount will be distributed amongst all or some of the Directors in accordance withthe directions given by the Board.

12. All the Directors of the Company except the Managing Director (Mr. Raymond N. Bickson) and the ExecutiveDirectors (Mr. Anil P. Goel and Mr. Abhijit Mukerji) of the Company are deemed to be concerned or interested in theResolution at Item No. 9 of the accompanying Notice, to the extent of the amount that may be received by them ascommission.

By Order of the Board of Directors

P. SankerVice President – Legal & Company Secretary

Mumbai, Dated: June 12, 2009

Registered Office :Mandlik House,Mandlik Road,Mumbai 400 001.


8

Details of Directors seeking appointment / re-appointment at the forthcoming Annual GeneralMeeting of the Company (Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges)

NAME OF DIRECTOR Mr. Ratan N. Tata Mr. N. A. Soonawala Mr. Deepak Parekh Ms. Arnavaz Aga Mr. Nadir Godrej

Date of Birth 03.08.1942

07.11.200807.11.2008

18.10.1945

09.04.2000

27.06.1935

31.07.1980

28.12.1937

09.01.1984Date of Appointment

26.08.1951

Expertise in specificfunctional areas

Eminentindustrialist withwide businessexperience acrossa variety ofindustries

Finance &DevelopmentBanking, Investment& Capital Markets

Banking & Finance EminentIndustrialist andSocial Activist

Qualifications B.Sc. Architecturewith StructuralEngineering fromCornell University,Ithaca, New York(including one yearat the CornellGraduate School ofBusinessAdministration)

BCom.(Hons) A.C.A. B Com FCA(England& Wales)

BA in EconomicsPost graduatedegree in medicaland psychiatricsocial work fromTata Institute ofSocial Sciences(TISS).

BSc ChemicalEngineering -MassachusettsInstitute ofTechnology (MIT)M.S.ChemicalEngineering -Stanford University.MBA- HarvardBusiness School

Details of sharesheld in the Company

59,792 1,845- -

List of Companies inwhich outsideDirectorships held ason 31.03.2009(excluding private &foreign companies)

-

Tata Sons Ltd

Tata Industries Ltd

Tata Steel Ltd

Tata Motors LtdTata ChemicalsLtd

The Tata PowerCompany Ltd

Tata Tea Limited

The BombayDyeing &Manufacturing Co.Ltd

Tata ConsultancyServices Limited

Tata TeleservicesLimited

Housing DevelopmentFinance CorporationLtdInfrastructureDevelopment FinanceCo LtdGlaxoSmithKlinePharmaceuticals LtdMahindra & MahindraLtdHindustan UnileverLtdCastrol India LtdHindustan OilExploration CompanyLtdHDFC AssetManagementCompany LtdHDFC Standard LifeInsurance CompanyLtdHDFC Ergo GeneralInsurance CompanyLtdSiemens LimitedMotor IndustriesCompany Ltd

Tata Sons Ltd.

Tata Industries Ltd.

Tata Motors Ltd.

Tata InvestmentCorporation Ltd.

Trent Ltd.

Industrialist with richbusiness experience

Godrej Industries Ltd

Godrej Agrovet Ltd

Godrej Tyson FoodsLtd

Godrej Oil Palm Ltd

Godrej & Boyce Mfg.Co. Ltd.

Godrej Properties Ltd

Godrej ConsumerProducts Ltd

Mahindra &Mahindra Ltd.

Godrej Sara Lee Ltd

KarROXTechnologies Ltd

Godrej Gold CoinAquafeed Ltd

Tata Teleservices(Maharashtra) Ltd

Thermax Ltd.

ThermaxSustainable EnergySolutions Ltd

9


Satyam ComputerServices Ltd.Airports Authority ofIndiaExide Industries Ltd(Alternate Director)Borax Morarji Ltd(Alternate Director)Zodiac Clothing Ltd(Alternate Director)Bharat Bijlee Ltd(Alternate Director)

NAME OF DIRECTOR Mr. Ratan N. Tata Mr. N. A. Soonawala Mr. Deepak Parekh Ms. Arnavaz Aga Mr. Nadir Godrej

-

Chairman / Memberof the *Committeesof other Companieson which he is aDirector as on31.03.2009

– Audit CommitteeTata Sons Ltd.

Share Transfer &Investors’GrievanceCommitteeTata InvestmentCorporation Ltd.

Audit CommitteeGlaxoSmithKlinePharmaceuticals Ltd

Mahindra &Mahindra Ltd

Castrol India LtdHindustan Unilever Ltd

Siemens Ltd

Share Transfer &Investors’GrievanceCommitteeGlaxoSmithKlinePharmaceuticals Ltd

– Audit CommitteeGodrej Sara Lee Ltd

Mahindra &Mahindra Ltd

Share Transfer &Investors’GrievanceCommitteeGodrej ConsumerProducts Ltd.

*The Committees include the Audit Committee and the Shareholders’ / Investor Grievance Committee.


10

DIRECTORS’ REPORTTO THE MEMBERS

The Directors have pleasure in presenting the 108th Annual Report of the Company together with its Audited Profit and LossAccount for the year ended March 31, 2009 and the Balance Sheet as on that date:

FINANCIAL RESULTS

Rs/Crores

Particulars 2008/09 2007/08Total Income 1706.52 1823.16Profit before Depreciation, Interest and Tax 553.41 760.23

Less: Depreciation 94.46 85.48

Less: Interest 90.44 94.28Profit before tax & exceptional Item 368.51 580.47

Less : Exceptional Items 6.21 -

Profit before tax 362.30 580.47Less: Provision for tax 124.58 198.91

Less: Short Provision of Tax of earlier years (Net) 3.69 4.10

Profit after tax 234.03 377.46Add: Balance brought forward from the previous year 536.78 331.33

Profit before Appropriations 770.81 708.79APPROPRIATIONS(i) General Reserve 30.00 38.00

(ii) Dividend:A final dividend of 120% i.e. Re. 1.20/- per Ordinary Share wasrecommanded by the Board of Directors on 12th June, 2009.(In respect of the previous year, an interim dividend of 190% i.e.Rs. 1.90 per Ordinary Share was paid to the share holders) 86.81 114.54

Tax on Dividend 14.75 19.47

(iii) Transfer to Debenture Redemption Reserve 100.00 -(iv) Balance carried to Balance Sheet 539.25 536.78

770.81 708.79

INCOME

The total income for the year ended March 31, 2009 at Rs. 1706.52 crores was lower than that of the previous year by 6 %.Room Income was lower than the previous year by 14 % The Average Room Rate (ARR) decreased by 2 % over the previousyear. Food & Beverage (F&B) income was 13% lower than the previous year.

INTEREST AND DEPRECIATION

Interest cost was lower at Rs. 90.44 crores for the year ended March 31, 2009 as compared to Rs. 94.28 crores in the previousyear due to income earned from surplus funds and proceeds of Rights Issue pending its utilisation. Depreciation for theyear was higher due to incremental depreciation on new additions to fixed assets including the new hotel in Bangalore thatstarted operations in December, 2008.

11


PROFITS

Profit before Tax at Rs. 362.30 crores was lower than the previous year by 38 %. Profit after Tax at Rs. 234.03 crores was alsolower by 38 % over the previous year.

CONSOLIDATED RESULTS

The consolidated revenues at Rs. 2782.12 crores were lower by 10% as compared to the previous year. Profit before Interestand Taxes reduced to Rs. 419.22 crores by 52% compared to previous year. The consolidated profitability was adverselyimpacted during the year under review on account of a decline in the profitability of IHCL and its Indian associate and JVcompanies which were due to the terrorist attacks in India as also the onset of global recession. In addition, as a result ofrenovations at The Pierre, New York and Taj Coral Reef, Maldives there was a loss of revenue and profits. Profitability wasalso adversely impacted on account of adverse foreign exchange movements during the year as also because of the cost ofholding the company’s strategic investments. The consolidated Profit after Tax reduced to Rs. 12.46 crores as compared toRs. 354.98 crores in the previous year. We believe that a recovery process has begun.

DIVIDEND

Your Directors are pleased to recommend a dividend of 120% or Re. 1.20/- per Ordinary Share in respect of the year endedMarch 31, 2009.

BORROWINGS

The total borrowings stood at Rs.1766.47 crores as at March 31, 2009 as against Rs. 1134.18 crores as on March 31, 2008.The increase in debt was on account of on going capital expenditure on new projects and renovations and investment ininternational subsidiaries.

CAPITAL EXPENDITURE

During the year under review, your Company incurred Rs. 315.33 crores towards capital expenditure. Major expenditure wasincurred on VIVANTA by Taj, Bangalore, Faluknuma Palace, Hyderabad, Taj Lands End, Mumbai, VIVANTA by Taj,Yeshwantpur and ongoing renovations across existing hotels.

BUSINESS OVERVIEW

The year 2008-09 was a difficult year for the tourism and hospitality industry. After having four years of robust growth,global tourism slowed down during the global economic downturn. The global economic downturn which started in early2008 impacted your Company’s business and performance, as also the hospitality industry and will likely continue to impactthe sector in the near term. The terrorist attack on the Company’s iconic property Taj Mahal Palace & Tower and the city ofMumbai in November 2008 further impacted the hospitality industry in the country.

Travel & Tourism growth in 2008 slowed down to just 1% and is likely to contract further by 3.3% in 2009 only to expand by0.3% in 2010. However looking beyond the current crisis, Travel & Tourism is expected to resume its leading, dynamic rolein global growth. World travel & tourism is expected to contribute nearly US$5,474 billion to global GDP in 2009, rising toapproximately US$10,478 billion over the next ten years, according to the latest tourism satellite accounting (TSA) researchfrom the World Travel & Tourism Council (WTTC). In terms of regional performance, Africa, Asia Pacific and the MiddleEast are experiencing higher growth rates than the world average, in terms of total Travel & Tourism Demand while thematured markets – most notably the Americas and Europe – are falling below the world average.

The global economic downturn has had its impact on Indian Tourism and Hospitality industry which saw a decline in theforeign tourist arrivals to India from 5.27 million in FY 2007/08 to 5.13 million in FY 2008/09 a decrease of 3%. The foreigntourist arrival in March 2009 was 4.72 lakhs as compared to 5.41 lakhs during March 2008, a decrease of 12.8%. Consequentlyforeign exchange earning during March, 2009 was USD 867 million as compared to USD 1248 million in March 2008. Despiteshort and medium term setbacks, tourism revenues are expected to rise by 42% from 2007 to 2017, according to a report ofIndian Brand Equity Foundation on Tourism and Hospitality.


12

The slowdown in the tourism sector has had a cascading effect on the hospitality industry with a decrease in theoccupancy ratio and average room rates. The Government of India has taken a number of initiatives to support theTourism Industry details whereof are given under Management Discussion and Analysis.

Supply of additional capacity is expected to be delayed due to the slowdown in the economy, constructions delays, highreal estate prices and difficulty in getting bank credit. Several real estate developers have already announced cancellationsor deferrals of their projects which will continue the demand supply mismatch for the ensuing year. For your Company,despite this adversity and challenge, there are opportunities as well to consolidate our position in the market, speedilycomplete projects under implementation whilst re-prioritizing future investments and rationalizing our cost base toprotect margins which are under pressure. During the fourth quarter, all capital expenditure, other than that for projectswas frozen and operating costs were minutely scrutinized and kept to the bare essential. There was strong focus onmaintaining liquidity and working capital norms were continuously optimized.

During the year, 12 hotels were opened with an inventory of 1167 rooms. Management Contracts were signed for hotelsin Beijing, Hainan Island, Dwarka and Guwahati.. The inventory of the Taj Group now stood at 99 hotels with 11754rooms. More details on the new properties launched, product upgradation, expansion in domestic and internationalmarkets are provided under the section Management Discussion and Analysis.

Your Company wiil pursue the completion of ongoing projects, both in the domestic and international market, at differentprice points. Against this backdrop your Company expects to achieve sustainable and profitable growth.

TERRORIST ATTACK ON ‘TAJ MAHAL PALACE & TOWER’

Your Company’s flagship property, The Taj Mahal Palace and Tower in Mumbai was attacked by terrorists on November26, 2008 amongst the other targets in the city. 31 persons were killed in the attack within the hotel, including 12 membersof staff of the hotel. The Board mourns the death of innocent people in the hotel and Mumbai city and also paystribute to the exceptional services rendered by the employees of the Taj, the police, security forces, hospitals and othersduring the attack and thereafter.

The Tower Wing was re-opened after refurbishment on December 21, 2008, whilst the Heritage block will be opened inphases over the next few months. The Taj Mahal Palace & Tower is insured under two primary insurance covers forsafeguarding the hotel from property damage and business interruption.

TAJ PUBLIC SERVICE WELFARE TRUST

The unprecedented attack on Mumbai between November 26-29, 2008 saw many people from the security forces, police,hotel employees, guests of the Taj / Oberoi and general public being killed or wounded. Pursuant to the outpouring ofemotional support from well wishers in India and across the globe to provide relief for those affected by the attack, yourCompany set up the “Taj Public Service Welfare Trust” on December 12, 2008. The Trust is a registered PublicCharitable Trust. The Trust has received donations from people of all walks of life and would use the income/corpus toprovide relief to the dependants of those who were killed as well as provide medical and other assistance to those whowere injured till they lead a normal life. The Trust has so far provided assistance to 104 affected families with disbursements/ commitments of Rs. 1.63 crores.

INTERNATIONAL OPERATIONS

Revenue from International Operations constitutes 25% of the Taj group’s chain wide revenues. During the year underreview, the turnover from International hotels was lower by 23% primarily due to the ongoing renovations at The Pierre,New York and Coral Reef, Maldives. The operations of the US hotels in particular were impacted especially in the secondhalf of the year due to the global economic slowdown and consequent curtailment of business travel. Further, theincrease in unemployment and reduced income levels in the US economy did lead to a reduction of overall demand forthe lodging industry which is expected to recover by the end of this financial year. In order to intervene and to protectthe margins, in the meanwhile the Management has taken a variety of cost reduction initiatives.

13


The UK operations continued to improve during the year under review. The company fully renovated the Bombay Brasserie,its iconic restaurant in London. Despite the economic slowdown, the income and profitability from the international operationswill improve with the impending reopening of The Pierre, New York as also the Taj Coral Reef, Maldives and the strongpossibility of a global economic recovery.

THE TAJ WAY

Your Company along with its Subsidiaries, Associates and Joint Venture companies operating under the brand “Taj HotelsResorts and Palaces” run the hotels under the brands ‘Taj’, ‘Taj Residency’, ‘VIVANTA by Taj’, ‘Gateway’, and ‘Ginger’hotels, has been able to leverage the sources of competitive advantage despite the slowdown in the hospitality industry.Your Company has taken several initiatives during the year details of which are given in the section- Management Discussionand Analysis under the headings ‘Product Upgradation’, ‘New Properties’, ‘Expansion in Domestic and InternationalMarkets’, ‘Service Excellence’ and ‘Marketing Alliances’ and are not being repeated herein .

SUBSIDIARIES

Your Company has obtained an exemption from the Ministry of Corporate Affairs vide its letter no. 47/158/2009-CL-III datedMay 1, 2009, for publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the ConsolidatedFinancial Statements of the Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standardsof the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Reportand are reflected in the consolidated accounts.

The Financial Statements of the subsidiary companies and other detailed information will be made available to the investorsseeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be available forinspection at the Registered Office of the Company as well as the respective Registered Offices of subsidiary companies.

LISTING

The Ordinary Shares of your Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange ofIndia Limited. The Global Depository Shares (GDS) issued by your Company are listed on the London Stock Exchange.

FIXED DEPOSITS

Your Company launched a revised Fixed Deposit Scheme inviting deposits from the general public at a rate of 9.5% p. a. fora period of two years and 10% p.a for a period of three years with the minimum amount of deposit being Rs.25,000.Additional interest of 0.25% p.a. is payable on deposits received from shareholders/senior citizens/employees.

The outstanding amount of fixed deposits placed with the Company amounted to Rs 27.18 crores. (previous yearRs. 3.08 crores) excluding Rs. 0.41 crores (previous year Rs. 0.42 crores), which remained unclaimed by depositors as onMarch 31, 2009.

DIRECTORS

Mr. Nadir Godrej and Ms. Arnavaz Aga were appointed as Additional Directors with effect from November 7, 2008. Theyrespectively hold office upto the date of the forthcoming Annual General Meeting and are eligible for appointment. Yourapproval for their appointment as Directors has been sought in the Notice convening the Annual General Meeting of theCompany.

In accordance with the Companies Act, 1956, and the Articles of Association of the Company, three of your Directors, viz.,Mr. Ratan N. Tata, Mr. N. A. Soonawala and Mr. Deepak Parekh retire by rotation, and are eligible for re-appointment.

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion andAnalysis, Corporate Governance as well as the Auditors’ Certificate regarding compliance of conditions of CorporateGovernance, form part of the Annual Report.


14

AUDITORS

The Members are requested to re-appoint M/s. Deloitte, Haskins & Sells, Chartered Accountants, Mumbai and M/s. N.M.Raiji & Co., Chartered Accountants, Mumbai as Joint Auditors for the current year and authorise the Board of Directors tofix their remuneration.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of Particularsin the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is inNote Nos.22, 23 & 24 of the Notes to the Accounts.

STAFF

As required by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,1975, a statement of information relating to employees has been given in the Annexure to the Report and forms a part of it.

The Board desires to place on record, its appreciation to all employees of the Company and pays its respects to all thosewho laid down their lives in the course of duty to protect the lives of our valued guests without whose sustained dedicatedeffort the Company would not have been able to overcome the crisis it met with during the year.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, based on therepresentations received from the Operating Management, hereby confirms that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there areno material departures;

ii. it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistentlyand made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state ofaffairs of the Company as at March 31, 2009 and of the profit of the Company for that period;

iii. it has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should berecognized while relying on any system of internal control and records; and

iv. it has prepared the annual accounts on a going concern basis.

GLOBAL COMPACT

As part of the Tata Group, your Company had signed up to promote the United Nations “Global Compact” which lays downten key principles to specifically address issues in the areas of human rights, labour, corruption and the environment. YourCompany continues to be an active member of Global Compact. Your Company annually submits a ‘Corporate SustainabilityReport’ detailing its economic, environmental and social performance.

On behalf of the Board of Directors

Ratan N. TataChairman

Mumbai, June 12, 2009

Registered Office:Mandlik HouseMandlik RoadMumbai 400 001.

15


Annexure to the Directors' ReportINFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956, READ WITHCOMPANIES ( PARTICULARS OF THE EMPLOYEES ) RULES 1975 & FORMING PART OFTHE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2009Sr. Name of Designation Age as on "Gross“ Net Qualification Experience Last CommencementNo. Employee 31/3/2009 Remuneration" Remuneration (No. of Years) Employment of Employment

As on 31/03/09 Held

1 Aiyer Mahesh General Manager - 38 2,620,229 1,791,759 PGDBM (Marketing), 14 First Employment April, 1995Taj Deccan, Hyderabad B. Tech (Mech.),

2 Ananda S. Corporate Chef - Premium 53 9,156,250 5,894,130 Dip. In H.M.C.T 26 Hotel Blue Diamond March, 1990Hotels & Executive Chef - TajPresident Hotel, Mumbai

3 Arulmani General Manager - Learning 44 2,463,157 1,654,037 B.Sc., Dip. In H.M.C.T 20 First Employment July, 1989& Development

4 Avasthi Alok Director - Operations, Taj 46 3,700,690 2,503,490 B. Com., Dip In 23 First Employment August, 1986Luxury Hotels International Hotel Management,

MBA - IMHI-Cornell -Essec,FranceDip. In Systems Management

5 Ayyapan Director - Corporate 51 2,617,512 1,795,912 B.Sc., PGDM (Marketing) 29 Hotel Inter-Continental July, 1995Vasant Sustainability Initiatives Al-ain, UAE

6 Banerjee General Manager - 39 2,637,522 1,812,482 PGDM, B.Sc. (Eco Hons) 16 Orient Fans August, 2005Sandeep Human Resources,

Luxury International

7 Basu Renu (Ms.) Vice President - Sales 49 6,254,785 3,997,445 B.A (Hons.) L.L.B, 27 HDFC Bank Mumbai January, 1999Dip. In Business Management

8 Batliwala S. R. Vice President - Food & 58 5,262,574 3,410,954 Dip. In H.M.C.T., Post Dip. In 38 First Employment May, 1970(Ms.) Beverage Spl. Hotel Management

F.H.C.I.M.A. (UK)

9 Beri D K Vice President - Business & 60 7,332,527 4,731,227 B.Sc. Dip. In H.M.C.T 38 ITDC January, 1982Corporate Affairs Advance Dip. In Hotel

Management (Germany)

10 Bhatia Director - Legal & 51 3,751,304 2,448,164 M.Com., A.C.S 30 Indian Overseas Bank February, 1986Prakash K Secretarial (North)

11 Bhesania Director - Human Resources 41 3,652,105 2,423,735 B.A(Eco.), Dip. In Personnel 17 Tata NYK Transport August, 2000Kristyl P (Ms.) (Premium Hotels) Management., MBA, Systems

12 Bickson. R Managing Director 53 53,099,832 35,159,682 Advance Mgmt. Program - 36 The Mark Hotel January, 2003Harvard University Boston, New York, U.S.AMA, USAInternational Senior ManagersProgram - Harvard UniversityBoston, MA, USAFinancial Mgmt. Course -Cornell University (U S A)Production & Services -Ecole Lernania de Lausanne,SwitzerlandHonorary Doctorate inHospitality Management fromJohnson & Wales University,USA

13 Bose Sanjay Director - Human Resources 40 2,979,157 2,008,577 B A, PGDPM 14 First Employment September, 1995(New Strategic Initiatives)

14 Chandwani General Manager - 40 2,981,222 2,016,692 MHRDM, MA(Psychology) 15 Application Company August, 2003Maria D'Costa Human Resources, Sales(Ms.) & Marketing

15 Chawla Simi Vice President - 44 5,901,959 3,841,189 B.Com., A.C.A 21 Tata Administrative June, 1988Kumar (Ms.) Internal Audit Service

16 Commissariat Director - Marketing 52 3,096,772 2,027,942 B.Com. (Hons) 29 Mahindra & December, 1999Rohinton K (Premium Hotels) Dip. In Management Studies, Mahindra Ltd.

Dip In Advertising & Marketing,Dip In Public Relations,

17 Daboo Jamshed Chief Operating Officer - 47 7,726,888 4,937,398 B.E. (Mech.), 22 Tata Administrative July, 2000Premium Hotels PGDBM (Marketing & Service

Finance)


16

18 Dasgupta General Manager - IS 49 2,759,778 1,925,088 B. Com 27 Hotel Sofitel Surya, December, 1983Debashish New Delhi

19 Drego Allwyn General Manager - Taj Coral 41 2,518,420 1,677,650 Dip In Hotel Mgmt., B.A 14 The Oberoi June, 2005Reef, Maldives Dip In Hospitality., Amarvilas, Agra

(Sales & Marketing)Post GraduateDip. In Hotel Mgmt.,

20 Dutt Salil Chairman - Taj Trade & 60 4,208,077 2,729,187 B.A, Dip In H.M.C.T 36 First Employment October, 1973Kumar Transport Company Limited

21 Dutta Dibyendu Director - Finance 42 3,806,049 2,494,809 B.Com., A.C.A, AICWA 16 Tata Steel April, 2001(Gateway Hotels)

22 Dutta Mohini Executive Director - 61 7,621,487 4,853,427 B. Com., Dip In Travel & 35 Stallion Travel October, 2001TC Travel Services Ltd. Tourism from the Services pvt ltd.

University of Hawaii

23 D'souza Vida Director - Business Excellence 40 3,860,423 2,577,323 B.A (Eco), Dip In H.M.C.T, 19 First Employment September, 1990J (Ms.) PGDBM

24 Farooqi Zaid Director - Marketing 44 4,338,090 2,763,815 B.A., PGDBM 19 Air France November, 2000Communications

25 Gangrade General Manager - Sales & 31 2,438,461 1,663,001 B Tech, PGDM (IIM Calcutta) 7 Tata Administrative June, 2002Ashish Marketing, Gateway Hotels Services

26 Gimi Feroze Jal Director - Legal 53 3,050,535 2,023,585 B.A (Economics), LLB 33 Shri A. S. Bobde April, 1980Civil Lines, Nagpur

27 Goel Anil P Executive Director - Finance 52 11,536,396 8,029,306 B.Com.(Hons.) A.C.A 26 Tata Tea Limited July, 2004

28 Guha Sumit Vice President - Projects 43 8,302,170 5,436,280 B.E (IIT) Kharagpur, 19 Tata Administrative June, 1990& Development PGDM (IIM Ahmedabad) Services

29 Gujral Rajiv Senior Vice President - 58 8,487,474 5,458,944 B B M ( Mkt.), FHCIMA 36 Quality Traders August, 1973Mergers, Acquisitions &Development

30 Gulati Bhavya Director - Mergers & 40 3,499,800 2,294,330 B. Com., ACA, 15 Larson & Toubro October, 2007Surinder Acquisitions M.Sc (International Limited

(Vice Chairman's Office) Marketing & Finance)London University

31 Gupta Mohit Financial Controller & 40 2,626,987 1,833,187 B. Com., ACA, A.C.S 13 HEG Ltd.(LNJ October, 2005Company Secretary Bhilwara Group)Taj SATS Air Catering Limited

32 Gupta Ritika (Ms.) Director - Sales, Luxury India 37 3,173,728 2,080,448 M. Com 15 First Employment November, 1993

33 H N Shrinivas Senior Vice President - 55 7,493,302 4,691,482 B.Sc., MSW (PM&IR), 35 Hewlett-Packard November, 2007Nagaraj Human Resources L.L.B, L.L.M

34 Iranpour Nowzer Pastry Chef - Western Region 57 2,832,569 1,887,589 S.S.C, Course in Bakery 37 First Employment October, 1972

35 Iyer Executive Sous Chef - 49 2,856,390 1,944,307 Dip. In Hotel Mgmt., B.A 29 First Employment August, 1980Ramchandran Taj Mahal Palace & Tower,

Mumbai

36 Jain Sonika (Ms.) Director - Sales, Tamil Nadu 39 2,938,300 1,934,880 B.A, M.A 18 Video Express, April, 1994and Premium Hotels, South New Delhi

37 Shyam Kaikini Director - Operations 36 3,083,339 2,036,439 MBA - Cornell -Essec 13 Jumeirah Hospitality August, 2006Dip In Hotel Mgmt. & Leisure Dubai UAE

38 Kamat S B Company Secretary & 36 2,603,975 1,782,645 B. Com., ACA, A.C.S 16 Tata Tea Ltd March, 2006Financial ControllerTaj GVK Hotels

39 Kang Karambir Vice President - 41 4,400,490 2,837,470 B.A (Eco.), PGDBM 17 First Employment October, 1991Singh Mumbai Hotels (Marketing)

& General Manager -The Taj Mahal Palace &Tower, Mumbai

40 Kanda Noriyuki Japanese Chef - 33 3,562,497 2,450,189 Pre University 12 Suankawa Food & August, 2004The Taj Mahal Palace & Planning, JapanTower, Mumbai

41 Kaur General Manager - Interiors 55 2,776,444 1,838,174 B.A (Hons) 29 Taj Services Ltd. June, 2000Hardeepak (Ms.) Dip. In Interior Design

42 Khosla Pradeep Executive Chef - 51 2,436,186 1,672,406 Dip. In. Hotel Management, 33 Hotel Holiday Inn, August, 1978Kumar Taj Krishna, Hyderabad Faridabad

Sr. Name of Designation Age as on "Gross“ Net Qualification Experience Last CommencementNo. Employee 31/3/2009 Remuneration" Remuneration (No. of Years) Employment of Employment

As on 31/03/09 Held

17


43 Khosla Rohit General Manager - 42 3,167,424 2,053,784 Dip. In. Hotel Management, 21 Hyatt Regency, Delhi November, 1999Taj Lands End, Mumbai Post Graduate Dip. In Hotel

Admin. & Management

44 Khullar Deepak Director - Sales TIS 44 3,643,750 2,435,760 B.A, Dip. In Hotel 23 Ramada Hotels (I) February, 1995Management, PGDBM Limited

45 Kumar General Manager ( Designate) 54 3,562,903 2,366,773 B.A.(Hons.) 26 First Employment August, 1976Perpetua (Ms.) New Premium Hotel

Yeshwantpur, Bangalore

46 Kumar Parveen General Manager - 38 2,575,582 1,710,292 Dip. In. Hotel Management, 17 First Employment June, 1992Chander Taj Lake Palace, Udaipur

47 *Kumar Rakesh Head - Techical Services 44 5,230,031 3,563,621 B.Arch (Architecture), 17 University of December, 2006M.Arch (Architecture) Chicago

48 Kunar Arindam General Manager - 39 3,139,427 2,089,387 Dip. In. Hotel Management, 18 Hyatt Regency Delhi December, 2000Taj West End, Bangalore

49 *Kunjur Director - Marketing 52 1,395,923 915,505 B.A, Dip. In Social 30 Trikaya Grey April, 1999Sandhya (Ms.) (Gateway Hotels) Communication Media Adverstising

(Specialisation in Advertising& Marketing)

50 Lakhmana Director - Product & Services 47 3,987,448 2,669,858 B.A (English Literature) 26 Savvy & Bokaro August, 1992Monicaa (Ms.) Operations (Gateway Hotels) News

51 Lalvani Rakhee Director of Public Relations, 38 2,613,185 1,755,325 Dip. In. Hotel Management, 17 First Employment June, 1992(Ms.) South

52 Lalvani Vikram General Manager - 35 2,616,960 1,729,500 B E (Mechanical), PGDM 12 First Employment June, 1997Taj Malabar, Cochin (Marketing)

53 Lin Shi Xi Chinese Chef - The Taj Mahal 50 2,566,697 1,790,571 Degree In Hotel Management, 14 Park Sheraton, January, 1997Palace & Tower, Mumbai Chennai

54 Madhukar General Manager - 45 2,969,330 2,014,660 B.Com., BGL 22 First Employment October, 1986Dinaz (Ms.) Taj Connemara, Chennai

55 Mahal Inderjeet Laundry Manager - 46 2,532,380 1,747,260 Dip In Management & 23 First Employment July, 1986Singh The Taj Mahal Palace & Marketing of Man Made

Tower, Mumbai TextileDip In Textile Tech.

56 Mahindroo Corporate Director of Revenue 31 2,987,491 2,042,561 Dip. In. Hotel Management, 10 Intercontinental Hotel November, 2005Puneet Management & Bachelor's Degree in Strategic Group, Bangkok

Global Distribution Hospitality Management

57 Malhotra Anil General Manager - 45 3,115,491 2,098,421 B. Com 23 Kuwait Hotels. Co. February, 1992Taj Chandigarh, Chandigarh

58 *Manchanda Director - Co-ordination 61 1,634,286 1,281,276 B. Com, Executive Masters 40 Indian Airlines September, 1978Ajit In Intl. Trade

59 Maru Niyant Vice President - Finance 46 6,284,344 4,104,164 B.Com, A.C.A 18 Tata Tele Services, July, 1999

60 Matcheswala General Manager - Taj 49 3,751,816 2,443,916 Dip. In. Hotel Management, 28 First Employment September, 1981Ashrafi (Ms.) Wellington Mews, Mumbai Post Graduate Dip. In Hotel

Admin. & Management,MBA from Les RochesHotelschool, Switzerland

61 *Mehendale Director - Mergers & 35 2,790,034 1,844,420 B Com., ACA 15 Edelweiss Capital July, 2008Managesh AcquisitionMadhav

62 Merchant General Manager - 50 2,515,688 1,729,778 B. Com 31 Sheraton, Deira July, 1999Darius The Gateway Hotel,

Ahmedabad

63 Misra A.K Sr. Vice President - Sales & 52 11,219,145 7,099,915 B.E.(Hons.)-Civil, M.B.A. 29 Tata Administrative June, 1980Marketing Services

64 Misra Deepa Vice President - 51 8,371,572 5,406,212 B.A, M.A (English.), 25 Fashion Magazine July, 1983H (Ms.) Marketing Dip. In Journalism

65 *Miyashita Japanese Chef - 25 2,263,164 1,491,110 March, 2007Takahito The Taj Mahal Palace &

Tower, Mumbai

66 Mohankumar Chief Operating Officer - 57 4,394,288 2,853,738 Dip. In. H.M.C.T 35 First Employment June, 1974P K Gateway Hotels

67 Momen Faisal Chief Operating Officer - 40 4,325,913 2,772,123 B.B.A (Wharton School of 17 White Cliff Tea (P) August, 2002Taj Trade & Transport Business) LTDCompany Limited & Universtity of PennsylvaniaInditravel Private Limited


As on 31/03/09 Held


18

68 Mukerji Abhijit Executive Director - 46 8,910,599 5,596,947 Dip. In Hotel. Management, 24 First Employment December, 1984Hotel Operations MBA - Cornell -Essec, CHA,

TGMP (Harvard University)

69 Mukherjee Diretor - Projects 44 4,899,217 3,226,197 B.Tech (Hons) 21 Bovis Land Lease February, 2004Arindam

70 Mukherjee Director of Operations 51 2,661,071 1,757,861 Dip. In. Hotel Management, 32 Carlsons Hospitality May, 1998Sandip (Luxury India) B.A, Worldwide

Masters Degree in Tourism PT Tri Sagar SaranaMgmt (IGNOU)

71 Nagpal Rajesh Advisor - Project 41 3,780,000 2,603,660 MBA (London Business School) 16 Alliance Capital Mgt., August, 1998Bachelor of Science in Business MumbaiAdministration (Finance/Intl.Bsuiness)

72 Nagpal Sudhir Advisor - IT 50 3,780,000 2,603,660 MBA (Indiana University of 26 MPOWER Information August, 1998Pennsylvania, U.S.A) Systems (P) Ltd.

73 N Prakash Director - Operations, OHL 46 3,775,440 2,483,017 B.Com 24 Food Specilaities Ltd., September, 1988& General Manager -Taj Coromandel, Chennai

74 Narang Chief Operating Officer - 51 7,917,371 5,035,031 B.A. (Eco), M.B.A 30 Spica Group of October, 1982Jyoti (Ms.) Luxury India Indusrties

75 *Noronha Joyce Staff Officer 58 2,429,631 1,851,781 Class XI, Secretarial Course - 40 Stock Exchange September, 1997Barbara (Ms.) Pitman

76 Natarajan K Corporate Chef - 53 5,796,027 3,787,697 B.Sc. D.H.M.C.T 28 First Employment September, 1981Gateway Hotels

77 Newar Rajeev Director - Finance 41 3,859,156 2,612,346 B.Com (Hons), A.C.A, A.C.S 17 Birla Corporation Ltd June, 2000(Luxury India)

78 Oberoi H.K. Corporate Chef - 55 9,362,145 6,053,425 Dip. in H.M.C.T. 34 First Employment July, 1974Luxury Hotels Division &Executive Chef The Taj MahalPalace & Tower, Mumbai

79 Panchanatheeswaran Director - Total Productive 52 2,977,821 1,954,151 B.E(Mechanical) 29 Sundram Fasteners May, 2000B Maintenance Ltd.,

80 *Pandey General Manager - 38 2,335,820 1,569,101 B.Sc.(Engg), M.B.A 11 Accenture January, 2006Ashutosh Development

81 Parekh Director - Finance 47 3,844,288 2,473,228 B.Com, A.C.A, A.C.S 24 Tata Chemicals Ltd., March, 2001Rajeshkumar H International Companies

82 Parvatha General Manager - Sales, 40 2,519,816 1,718,816 Bachelors In Hotel 16 ITC Hotels Limited March, 2000Kiran V. Andhra Pradesh Management, MBA

83 Parvathy Director - Coordination 55 3,652,170 2,506,740 B.Sc. (Home Science) 35 First Employment July, 1974M M (Ms) (Operations) Premium Hotels

84 Pasupathy General Manager - 56 3,091,604 2,122,224 Dip. In Hotel Management 35 Hotel Ramada November, 1980Rajamani The Gateway Hotel, Coonoor International

& The Gateway Hotel, Ooty Doha - Qatar

85 Patel Bina Vice President - Spa 38 3,645,200 2,557,610 B.A (Hons) in Corporate Law 18 Gurudev Siddha August, 2003S (Ms) Operations & Development Peeth, Ganeshpuri

86 Patel Gev Nari Vice President - Sales & 48 5,001,341 3,287,201 B.Sc. 26 Eureka Forbes Ltd., March, 1984Marketing (LuxuryInternational)

87 *Patel Samir Vice President - Spa 45 5,839,584 4,071,724 B.E (Production) 22 Gurudev Siddha September, 2003Operations & Development Peeth, Ganeshpuri

88 Pavithran Ajit General Manager - Vivanta 35 2,775,376 1,912,006 Dip. In. Hotel Management, 15 The Oberoi, August, 2007by Taj, Bangalore Bangalore

89 Pokhariyal Area Director - Goa & 41 3,661,247 2,389,797 Dip. In. Hotel Management, 17 Park Hotel, June, 1993Gaurav General Manager - New Delhi

Taj Exotica, Goa

90 Poupon Yannick Chief Operating Officer - 60 23,012,206 15,303,936 Graduate Hotel Management 37 Intercontinental September, 2001Luxury International School Strasbourg, France Group

91 Rao Pradip Vice President - Materials 57 4,484,082 2,898,272 B.Sc., A.C.A 30 ITC Hotels Ltd., September, 1999

92 *Late Rao Executive Sous Chef - - 2,127,553 1,529,690 Dip. In. Hotel Management, 28 First Employment October, 1980Vijay Banja Taj Mahal Palace & Tower,

Mumbai

93 Rathore Mahavir Head - Security Taj Group 51 3,373,064 2,177,654 B.A, M.A, 26 First Employment October, 1982Singh


As on 31/03/09 Held

19


94 Rebello Jessica Executive Assistant to 41 2,444,684 1,689,968 B.A 24 Dow Chemical August, 2003(Ms.) Managing Director International Pvt.

Ltd., Mumbai

95 Reshamwala General Manager - Taxation 42 2,520,735 1,804,325 B. Com., M.Com., & ACA 17 S R Batliboi & Co. January, 1999Kunal

96 Roy Sarita Director of Public Relations 41 2,542,702 1,681,622 BA (Economics & 22 HRH Group of February, 2003Hegde (Ms.) Psychology) Hotels, Rajasthan

Diploma in MarketingMngt. and AdvertisingPost Graduate Diploma inPublic RelationsPost Graduate Diploma inComputer Science

97 Saher Pervez Senior Operator 60 15,297,921 10,077,066 S S C 35 First Employment January, 1974Pestonji

98 Sampat Pankaj General Manager - 36 2,536,751 1,717,221 Dip. In. Hotel Management 16 First Employment June, 1993Taj President, Mumbai

99 Sanker Vice President - 49 5,393,800 3,443,940 B.Sc., L.L.M, A.C.S 27 Amway India March, 2008Parameswaran Legal & Company Secretary Associate Member of The Enterprises

Institute of Chartered Secretaries& Administration (London)

100 *Schmidt Justin Corporate Fitness Consultant 29 719,358 595,138 B A in Philosophy from 7 January, 2009University of San FranciscoCertified Fitness Trainer,International Sports ScienceAssociation USACertified Nutritional MicroBiologist, from PH MiracleCenter & Doctor Robert Young.USA

101 Seeni M Director - Projects (South) 54 3,130,340 2,078,970 Dip. In Civil Engineering 34 Southern December, 1986PetrochemicalIndustries CorporateLimited, Madras

102 Sengupta P Director - Finance 43 3,717,289 2,495,389 B.Sc.(Hons), A.C.A 17 Sarova Group of August, 2003(Premium Hotels) Hotels

103 Sethi Gautam Financial Controller - 41 2,699,658 1,867,868 B.Com., A.C.A 14 Unipatch Rubber Ltd., December, 1995The Taj Mahal Palace &Tower, Mumbai

104 Sharma Rajni General Manager - 58 2,578,139 1,788,449 Dip. In Hotel Management 35 First Employment July, 1974Mohan Deccan Odyssey

105 Sharma General Manager - 51 2,496,706 1,659,816 Dip In Cookery, Dip In Bakery 32 Mansingh Hotel, October, 1979Sanjeev The Gateway Hotel, Agra & Confectionery Jaipur

106 Shinde Hemant Manager - Human Resources 51 2,570,398 1,709,588 B. Com., LLB 26 Blue Diamond, Pune November, 1999Arjoonrao Taj Lands End, Mumbai

107 Shukla Prakash Senior Vice President - 46 16,707,273 11,136,953 Graduate from Rutgers 25 IBM August, 1999Technology University with Degree in& Chief Information Electrical Engineering &Officer English

Master Degree in ComputerScience from New YorkPolytechnic UniversityAMP from HarvardUniversty (U.S.A)

108 Shyam Aekta General Manager – Online 33 3,429,667 2,256,967 Masters of International 9 Tata Administrative June, 2000(Ms.) Marketing & Technology Business, BA (Hons) Eco. Services

MBA (INSEAD)

109 Siganporia Director - Information Systems 44 3,909,893 2,538,143 B.Sc., Dip. In Computer 22 Everest Marketing Ltd. December, 1990Khushru Maintenance & Architecture

110 Singh Digvijay General Manager - 43 3,411,516 2,314,427 Dip. in H.M.C.T. 23 The Bristol Hotel, April, 2001Taj Mahal Hotel, New Delhi DLF, Gurgaon

111 Singh Sarabjeet Director (Operations) Taj 44 4,151,725 2,648,195 B.A, Dip. In Hotel 21 First Employment September, 1988GVK Hotels & Resorts Ltd. & ManagementGeneral Manager -Taj Krishna, Hyderabad

112 Singh Taljinder General Manager - 40 3,499,991 2,324,561 B.Com (Hons) 19 First Employment September, 1990Taj Palace Hotel, New Delhi


As on 31/03/09 Held


20

113 Singh Veer Chief Operating Officer - 55 7,970,916 5,216,786 Dip. In Hotel Management, 33 First Employment December, 1976Vijay Premium Hotels IHM PUSA

114 Sood Sanjay General Manager - 45 2,998,411 1,997,021 Dip. In Hotel Management 23 First Employment August, 1986Taj Mount Road, Chennai

115 Srinivasan K S Vice President - 50 6,253,398 4,168,958 B.Com.(Hons) L.L.B, 25 Hyderabad Allwyn April, 1989Human Resources PGDPM CHRE Ltd,

116 Suma Director - Business 40 4,190,393 2,865,823 B.E - Hons.(Electrical), 19 Portman Overseas October, 2002Venkatesh (Ms.) Development MMS (Marketing & Finance)

117 T Murugan General Manager - Sales, 41 2,875,308 1,952,708 B.Sc., M.A 18 United Liner Agencies February, 1992Rajan Premium Hotels (Chennai) of India Pvt. Ltd.

118 Takulia Ramesh Director - Learning & 57 3,731,369 2,434,439 Dip. In H.M.CT, Salzburg, 38 Hotel Jaipur Ashoka May, 1992Development (Luxury India) Austria

119 Taneja Sunil Director - Marketing & 49 3,519,119 2,291,749 B.Com, Dip In Hotel 29 First Employment September, 1980Business Development Management, MHCIMA(TSACL)

120 Tangirala Director - Operations - 37 2,961,819 1,952,859 B.Arch, PGDM 12 Tata Administrative June, 1997Mridula (Ms.) Taj Wilderness Lodge (IIM Lucknow) Services

121 Umashankar General Manager - 46 3,624,250 2,438,190 B.Sc., Dip. In. Hotel 23 Radisson Hotel, June, 2001Sanjay Blue Hotel Sydney Management Chennai

122 V Mohan Area Financial Controller - 49 2,570,625 1,740,095 B. Com (Hons) M.Com 28 M/s. Print House October, 1982Taj Palace Hotel, New Delhi

123 Valson Vinod General Manager - The 51 2,423,351 1,688,591 Dip. In Hotel Management 29 Sindoori Hotel, October, 1996Gateway Hotel, Bangalore Madras

124 Vesavevala Vice President - 44 4,824,613 3,166,472 B.Com., M.M.S 20 Tata Administrative June, 1989Rustom Learning & Development Services

125 Vaidya General Manager - 49 3,136,700 2,092,730 B.A, M.A, Dip. In Industrial 24 First Employment February, 1985Vidyadhar Human Resources Relations & Personnel

The Taj Mahal Palace & ManagementTower, Mumbai Dip. In Marketing & Sales

Management

126 Vohra Divyesh General Manager - Materials 55 2,652,058 1,748,488 B.A 33 V R Doshi & Co. November, 1976

127 Yousuff Saleem General Manager - 45 2,723,315 1,777,605 B.A 22 First Employment May, 1986Taj Residency, Bangalore

128 Zakaria Editor & Sr. Vice President - 72 6,183,738 4,198,658 Graduated from Institute of 50 October, 2001Fatma (Ms) Taj Magazine Social Science, Nirmala Niketan

129 Zaveri Sumit General Manager - Finance 35 2,834,530 1,873,900 B. Com, ACA, ICWA 11 A F Ferguson & Co., February, 2001Chartered Accountants

130 Zeller Franz Senior Vice President & 62 23,397,183 15,552,963 Certified Food & Beverage 45 Millennium Hotels & November, 2003Chief Operating Officer - Executive from ResortsTaj Luxury Hotels - Institute of American Hotel &International Motel Association Course in

LondonBusiness School, London, UK

131 Zorniger Deputy General Manager - 45 7,963,222 5,347,526 German Professional Hotel & 25 The Mark Hotel, March, 2003Birgit (Ms) The Taj Mahal Palace & Restaurant Diploma (Hons) New York

Tower, Mumbai from Hotel SchoolVillingen-SchwenningenPDP Program from CornellUniversity

Note :

1. Net Remuneration is arrived at by deducting from the remuneration received, Income Tax, Company's Contribution to provident fund and superannuation fund.

2. All employees are entitled to Gratuity, Medical Benefits & Leave Travel Assistance as per rules of the Company.

3. All the employees have Adequate experience to discharge the responsibilities assigned to them.

4. The nature of employment in all cases is contractual.

5. No . Employees is related to any director of the company.

6. None of the above employees hold more then 2% of paid up capital of the company.

*7. Employed only for part of the year.

On behalf of the Board of Directors

Ratan N. TataMumbai, June 12, 2009 Chairman


As on 31/03/09 Held

21


MANAGEMENT DISCUSSION AND ANALYSISIn line with the international practice, The Indian Hotels Company Limited (IHCL) has been reporting consolidated resultstaking into account the results of its subsidiaries, joint ventures and associates (together referred to as “the Group”). Thisdiscussion, therefore, covers the financial results and other developments during April, 2008 to March, 2009 in respect ofthe Group. Some statements in this discussion describing the projections, estimates, expectations or outlook may beforward looking. Actual results may, however, differ materially from those stated on account of various factors such aschanges in government regulations, tax regimes, economic developments within India and the countries within which yourCompany conducts its business, exchange rates and interest rates fluctuations, impact of competition, demand and supplyconstraints.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Global and Indian Economy

Fiscal 2008-09 started off on a note that the economy was decidedly on a higher growth path with the macro-economicfundamentals inspiring confidence and a general optimism about the medium to long term prospects of the economy. Theeconomy was expected to slowdown marginally from the three years of 9 per cent plus growth in real Gross DomesticProduct (GDP), reflecting a cyclical downturn in the global economy and expectations were that growth would be 7.5 to 8 percent. High oil prices and domestic inflation were definite areas of concern, as was the possibility of a worsening of theinternational financial crisis which had surfaced in 2008. As it happened, the global situation deteriorated massively aftermid September 2008 following the collapse of several leading financial institutions in the US . There has been a massivechoking of credit since then and a global crash in stock markets. The slowdown that was expected in the global economybecame much worse with the US, Europe and Japan moving into recession.

A crisis of this magnitude in industrialized countries is bound to have an impact around the world, and it did. Most emergingmarket countries have slowed down significantly and India has also been affected. While the slowdown in economy wasprimarily driven by the knock on effects of the global economic crisis, it also reflected to some extent the slowdownassociated with cyclical factors. Industrial growth experienced a significant downturn and the loss of growth momentumwas evident in all categories, viz., the basic, capital, intermediate and consumer goods . In sum, the Indian economyexperienced some loss of growth momentum with major drivers of growth witnessing moderation. In particular, the broad-based industrial slowdown, dampened services sector growth, deceleration in private consumption and investment demandalong with declining export demand are some of the major concerns facing the Indian economy in the wake of the globalrecession at the present juncture. The fiscal stimulus packages of the Government and the monetary easing of the ReserveBank will, however, arrest the moderation in growth and revive consumption and investment demand, though with somelag, in the months ahead. Furthermore, prospects of the agricultural sector also remain bright, and this will continue tosupport the rural demand. Notwithstanding widened current account deficit in 2008-09, the balance of payments positionremains sustainable in the context of the present level of foreign exchange reserves and external debt. Finally, in the wakeof expected improvement in agricultural production as well as low international commodity prices, inflationary pressures arealso anticipated to remain at a low level through the greater part of the 2009-10.

An Overview of the Global Tourism Industry

The year 2008-09 was a difficult year for the tourism and hospitality industry. After having four years of robust growth,global tourism slowed down during the global economic downturn. The global economic downturn which started in early2008 impacted the Company’s business and performance, as also the hospitality industry and will likely continue to impactthe sector in the near term. The terrorist attack on the Company’s iconic property Taj Mahal Palace & Tower and the city ofMumbai in November 2008 further impacted the hospitality industry in the country.

Travel & Tourism growth in 2008 slowed down to just 1% and is likely to contract further by 3.3% in 2009 only to expand by0.3% in 2010. However looking beyond the current crisis, Travel & Tourism is expected to resume its leading, dynamic rolein global growth. World travel & tourism is expected to contribute nearly US$5,474 billion to global GDP in 2009, rising to


22

approximately US$10,478 billion over the next ten years, according to the latest tourism satellite accounting (TSA) researchfrom the World Travel & Tourism Council (WTTC). In terms of regional performance, Africa, Asia Pacific and the MiddleEast are experiencing higher growth rates than the world average, in terms of total Travel & Tourism Demand while thematured markets – most notably the Americas and Europe – are falling below the world average.

Indian Tourism Industry

The global recessionary trend has had its impact on Indian Tourism and Hospitality industry . There was a decline in theforeign tourist arrivals to India from 5.27 million in FY 2007/08 to 5.13 million in FY 2008/09 a decrease of 3%. The foreigntourist arrival in March 2009 was 4.72 lakh as compared to 5.41 lakh during March 2008, a decrease of 12.8%. Consequentlyforeign exchange earning during March 2009 was USD 867 million as compared to USD 1248 million in March 2008. Despiteshort and medium term setbacks, tourism revenues are expected to rise by 42% from 2007 to 2017, according to a report ofIndian Brand Equity Foundation on Tourism and Hospitality.

The slowing tourism industry has had a cascading effect on the hospitality sector with a decrease in the occupancy ratioand average room rates. The Government of India has taken a number of initiatives to support the Tourism Industry someof which are as under:

� Launch of Incredible India campaign to promote tourism both in domestic and international markets.

� Recognition of spare rooms available with various house owners by classifying these facilities as “Incredible IndiaBed and Break fast Establishments”’, under ‘Gold’ or ‘Silver’ category.

� A new category of visa, “Medical Visa” (‘M’-Visa), has been introduced which can be given for specific purpose toforeign tourists coming into India. Foreign medical tourists will be offered one additional treatment for free.

� Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for Ayurveda andPanchkarma Centres.

� A number of reasonably priced wellness centres and health spas are coming up in several destinations.

� Ministry of tourism has tied up with United Nations Development Programme (UNDP) to promote rural tourism.

� The Government is offering free air ticket for companion, travel to additional places and extended stay at hotels.

India has also received international accolades as a leading global tourist destination.

� India has been elected to head the UN World Tourism Organisation (UNWTO), the highest policy making worldtourism body represented by 150 countries.

� India is ranked 7th in terms of number of World Heritage cultural sites, according to a UNESCO report 2008.

� The world’s leading travel and tourism journal, “Conde Nast Traveller”, ranked India as the numero uno traveldestination in the world.

� The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50 places.

� India is ranked 1st with regard to tourism fair attendance.

� The “Incredible India” campaign has been ranked as the Highest Recall Advertisement worldwide by “Travel andLeisure”.

� India was adjudged Asia’s leading destination at the regional World Travel Awards (WTA).

� India’s Taj Mahal continues to figure in the Seven Wonders of the World. Every year, more than 3 million tourist visitTaj Mahal in Agra.

Despite economic slowdown, your Company would aggressively pursue its strategy both in the domestic and internationalmarket at different price points from the smart basic hotels to the luxury segment. Against this backdrop your Companyexpects to achieve sustainable and profitable growth.

23


The Taj Advantage

Your Company operates its hotels under the “Taj Hotels Resorts and Palaces” umbrella brand and is the largest hotel chainin South Asia. It comprises of 99 hotels with 11754 rooms and over 281 Food & Beverage outlets. The total numbers ofhotels which are owned or managed by the Company have grown to 99 as against 88 in 2007/08. Internationally, theCompany has hotels, among other locations, at USA, Australia, Maldives, Malaysia, UK, Sri Lanka, Africa and the MiddleEast. Your Company owns either directly or through its associates and partners, properties in many key business andleisure destinations and has built for itself several sources of competitive advantage. Among the key sources of competitiveadvantage that your Company enjoys are branding, infrastructure and best in class services. The “Taj” brand has been builtover the years by consciously investing into brand building, establishing high brand standards and adhering to the samewith the objective of providing an exclusive TAJ experience to the guests. The brand equity is further strengthened by theownership and backing of Tatas, a Group with varied business interest operating in several countries and enjoying highcredibility. The Company has a good infrastructure by way of properties at prime location in India. It has the largestportfolio of rare and authentic Original Palaces and is the largest hotel chain in South Asia. The Sales and Marketingnetwork, the network of Partners and Associates, Reservation network and the Information Technology Services add to arobust and strong infrastructure. The Company has also been a pioneer in the Food & Beverage experience in India.

Opportunities

Your Company is poised strategically to take advantage of:

� Rapidly growing market in India, South Asia and key gateway cities in source-market destinations.

� Expansion in international destinations with top-of-the-line luxury and leisure properties.

� Meeting growing demand in the budget and mid-market segments.

� Extending the product portfolio into related offerings viz. luxury residences, wildlife lodges and spas.

Key initiatives taken by your Company during the year are discussed in a separate section.

Threats

The threats identified by your Company are related mainly to the markets in which your Company operates and generalfactors related to the tourism industry. Significant among these are:

� General downturn in global & domestic economies with consequent downturn in travel & tourism.

� Interest rates fluctuation could have adverse effect on performance.

� Cheaper international airfares increasing the affordability of travel to international destinations, especially South EastAsia, Europe and Australia.

� Growing presence of international hospitality chains competing in the luxury and business segments to meet excessdemand situation.

These threats and your Company’s strategy to overcome them have been discussed in detail in the section on Risk andConcerns and the Risk Mitigation Initiatives.

Update on Key Initiatives

The Domestic market saw shrinkage especially in the second half in keeping with the global financial crisis. During the yearunder review, the Company has at strategic locations made commitments by way of acquiring properties on lease, enteringinto tie ups for equipping hotels being built by partners and executing a number of management and technical servicescontracts for managing, operating and rendering technical services.

New Properties Opened

During the year, the Company commenced operations at the “Vivanta by Taj”in Bangalore, Karnataka, a 199 room new


24

generation upper upscale hotel located in Whitefield, Bangalore. Designed by Warner Wong of Singapore, the hotel’savant garde architecture reflects the spirit of the new positioning being aimed at by this new brand.

Your company added another significant hotel to its TAJ Residency portfolio, with the opening of the TAJ Mount Road,Chennai a hotel under management contract, owned by its associate company, TAJ GVK Hotels and Resorts.

The Company also opened Nadesar Palace (owned by its associate company, Benaras Hotels), in Varanasi, a small boutiqueluxury hotel and spa. The TAJ Residency, Trivandrum, an upper upscale hotel, in the center of the city of Trivandrum alsoopened during this period. The hotel is on management contract from Dodla International. The Company opened “Vivantaby TAJ”, a hotel under management contract in the heart of Panjim city in the month of May.

Additionally, the company commenced operation of the top four floors (120 rooms) at TAJ Lands Ends in the month of June,2009.

Expansion In Domestic And International Markets

Both the domestic and international markets saw a downward turn with a large number of developer and real estatecompanies cancelling or putting projects on hold. Internationally, regions which had seen aggressive growth, such as theMiddle East and North Africa put several new projects on hold or cancelled them on account of the financial crisis. YourCompany’s expansion strategy, however, remain robust compared to the market. During the year under review, the Companyhas been able to maintain a healthy pipeline of projects with most of them still going ahead at strategic locations. Whilesome of the projects under management contracts have slowed down, none of the projects have been cancelled.

During the year, your Company successfully signed a land deal with “Delhi Metro Rail Corporation” for setting up a 400room 5-Star hotel in Dwarka, New Delhi. Your Company also signed a land lease with Assam Government to set up the first5-Star Hotel of northeast in Guwahati. The plan is to set up a 125 key hotel, which can be expanded in a phased manner to200 keys over time.

The Company also entered into management contracts for several properties which will commence operation over the nextfew years both in the domestic and international markets. In the domestic sector, the Company has signed ManagementContracts for hotels at Kakarduma, New Delhi for a 180 key “Vivanta by Taj” and a 300 key “Gateway Hotel”, a 150 keyGateway in both Navi Mumbai and Cochin.

On the international front, Management Contracts are in place for hotels in Tangiers, Morroco and a breakthrough bysigning our first hotel in China in the Temple of Heaven Complex in Beijing and in Hainan. All these new hotels will come upover the next few years.

Update on Key ongoing Expansion Initiatives

Your Company continued on its aggressive growth path through a mix of owned assets and management contracts throughboth its associate companies and new developer owners. Projects under way include a 330 room Vivanta hotel inYeshwantapur, Bangalore. The property is designed to hold the largest conference facility among hotels in Bangalore andis expected to be completed around the middle of 2010. Falaknuma Palace is going through an extensive restoration processand is expected to open in early 2010. The Falaknuma Palace, a long awaited hotel opening, is expected to be yet anotheraddition to the Luxury Collection of the TAJ. The Company has commenced work on its project in Dwarka and designplanning for its project in Guwahati. The Company’s Associate Oriental Hotels Limited is also undertaking a 70 roomexpansion of its Fisherman’s Cove Hotel project.

On the international front, work is progressing rapidly on the Company’s joint venture project in Cape Town and this hotelis expected to open towards the end of 2009. Your Company’s management contract projects in the Middle East are alsoprogressing although there has been a slackening of pace on account of the financial crisis. Work is progressing on the TajExotica Resort and Spa in Dubai and the hotel is scheduled to open in the latter half of 2010. Design work is in progress onthe TAJ Exotica Resort and Spa in Doha. The projects in Abu Dhabi and Ras Al Khaimah have slowed down and areexpected to commence only after a year.

25


Management contracts have been a route used by your Company to grow the Vivanta and the Gateway brands. For theVivanta brand, work is progressing rapidly on its projects in Gurgaon, Kakarduma, Bekal and Pondicherry. For the Gatewaybrands, projects in Pune, Kolkata, Chennai, Cochin, Bangalore are showing good progress and can be expected to open inthe next couple of years.

Product Upgradation

Your Company continues with its ongoing program of investing in renovation and upgradation of its property. The Pierre,your company’s landmark property in New York, opened its doors to guests on 1st June, 2009 after a one and a half yearrenovation, costing US $ 100 million. The renovation, undertaken by international designers such as James Park Associatesand Alexandra Champalimaud, has remained sensitive to the historic nature of the property and weaved in several facets ofthe renovation, touches of Indian elements so closely associated with the TAJ brand. The renovation has been wellappreciated by the media, guests and the hotel will be launched formally in the month of September.

During the last one year, your Company has also been undertaking an extensive makeover of the TAJ Coral Reef (anassociate company hotel) and this hotel is expected to open its doors as the first international “Vivanta by TAJ” in themonth of August.

During the year, your Company launched several unique restaurants in the domestic & international hotels, notably “Varq”the exquisite Indian specialty restaurant, the second “Wasabi” at Taj Mahal, New Delhi, “Souk” at the Taj Bengal, Kolkata.During the same year the Company also launched the newly renovated 8 bay Grand Presidential Suite at Taj Palace, NewDelhi which enhanced the hotels suite offerings and made it the preferred choice for ‘Heads of State’ visits. The Companyalso opened the newly renovated and expanded Grand Ballroom in the TAJ West End.

Your Company also undertook several renovation projects in key properties of Associate companies as part of its ongoingprogramme of investing in renovation and product upgradation. This included the Taj President Hotel in Mumbai, the TAJCoromandel in Chennai and the Blue Diamond in Pune.

Ginger Hotels

Under the ‘Ginger’ brand, your Company’s subsidiary, commenced operations of seven new hotels at Pant Nagar, NewDelhi, Panaji (Goa), Ludhiana, Ahmedabad, Mangalore and Durg. Under this brand currently there are 19 operational hotelsat Bangalore, Haridwar, Bhubaneshwar, Mysore, Trivandrum, Pune, Durgapur, Nashik, Agartala, Pondicherry, Baroda,Pantnagar, New Delhi, Panaji (Goa), Ludhiana, Ahmedabad, Mangalore, Guwahati & Durg. In addition, several projects areat various stages of construction at Jamshedpur, Wakad-Pune, Chennai and Surat. In addition, to expand the market of“Ginger Hotels”, the Company has signed up management contracts for hotels in Manesar and Agra in addition to theearlier signed locations like Jaipur, Katra, Lucknow and Tirupur.

Wildlife Lodges

Your Company’s Joint Venture operates four lodges viz. Mahua Kothi at Bandhavgarh, Baghvan Pench, Pasangarh atPanna and Banjar Tola at Kanha thereby completing the first safari circuit in India.

Spas

The philosophy of our spas is rooted inherently in India’s ancient approach to wellness. The ethos of our carefullyrecreated treatments is drawn on the rich and ancient wellness heritage of India; the fabled lifestyle and culture of Indianroyalty and the healing therapies that embrace Indian spirituality. Taj Spa is an eco-sensitive brand hence all spa productsare natural and contain Indian herbs, pure essential oils, lipids, clays, mud, salts and flower waters all of a botanical source.Taj Spa uses organic linen and eco-friendly toxin-free pottery.

In the year 2008– 09, we launched a brand new concept in spa experiences, the first of its kind in the world – the Jiva Spa boatat the Taj Lake Palace, Udaipur in October 2008. This unique spa experience, recreates the splendour of the Lake Palace, theroyal traditions of the House of Mewar and the rejuvenating experiences of the Jiva Spa.


26

Inspired by the style of the old palaces of Udaipur, the Jiva Spa Boat evokes the stately air of past royal cruises aboard theHouse of Mewar’s ceremonial Gangaur barge. The design of the boat fuses historical and regal references with contemporarydesign, featuring a spacious, air conditioned double spa suite, a relaxation lounge, steam bath and shower. The suite opensout onto a large sky deck, which offers a soak bath, traditional lounging bed and dining area with views out to the Aravallimountains – the oldest in the world.

The Spa Boat has received several international accolades which include:

1) Taj Lake Palace and the new spa boat covered in Gallivanter Guide

2) The Spa Boat, has appeared in the Condenast Traveler, UK Hot List - May issue

3) The Spa Boat appeared on the first page of Condenast Travelers, USA – Hotlist – April issue

In addition the first Business hotel spa was inaugurated at the Taj Residency Bangalore in August 2008. For the first timewe introduced special corporate spa treatments for those business people who were short on time but needed somerelaxation.

Umaid Bhavan Palace, Jodhpur, became the member of the Leading Spas, USA which has helped them with greater visibilityamongst the top customers of leading Hotels database.

As on date, 16 Taj Spas are operational in Taj Hotels Resorts and Palaces in India and international locations.

Guest Experience

Your company continues to enhance the Guest Experience by improving service levels and product upgrades. To sustainthe market leadership position, comprehensive studies and initiatives like the ‘Luxury Hotels Customer Engagement Journey’were undertaken to build new Guest experiences and unique product and service offerings. These were then documentedas Taj Luxury Experience Standards and extensive training was provided to our associates on these benchmark standards.

During the year, your company completed exposure on the Tata Business Excellence Model for colleagues in the LuxuryInternational hotels and engaged Tata Quality Management Services (TQMS) to facilitate the Juran Methodology forContinuous Improvement Projects. With comprehensive in-house training infrastructure aided by external trainers – bothoverseas and domestic - training has been a continuous process for all levels of associates in your company.

We have augmented our skills inventory of Concierges (currently 25 members of the prestigious club - Clefs d’Or), Sommeliers,Bartenders and Butlers. A separate programme with sharper focus on Grand Palaces was established for creating a team ofPalace Services professionals. The expertise of an international consultancy was sought for specialised programmes toenergise teams and ignite passion, create awareness on the cultural dimensions for senior managers and enhance skillsthrough programmes such as a Master Bartending course.

Specialist inputs were also provided for Imaging and Grooming and Communications Enhancement programmes. E –Learning modules covering the Taj Leadership System, Taj Leadership Behaviour and Tata Code of Conduct helpedassociates learn in their own time and at their own pace. The associates in your company are provided continuous traininginputs through Learning and Development Managers and specially designated ‘Certified Taj Departmental Trainers’.

The learning experience is further enhanced using varied processes such as Cross Exposure Training, Systematic InductionProgramme, Taj Luxury Experience Training and Safety Training with emphasis on Fire Safety and First Aid.

The Customer Feedback System (CFS) is now stabilized in all our international hotels. During the year, the Guest Satisfactionlevels showed appreciable improvement. The practice of mystery audits conducted by a world renowned independent auditfirm continued and their bi-annual audits at our hotels enabled us to benchmark us against the best international luxuryhotels and also to ensure adherence to the Taj Luxury Experience Standards.

In order to maintain market leadership, continual upgrades of the product and introduction of new offerings at our hotels areessential. The new additions to the Food and Beverage offering this year were restaurants such as Masala Klub at The Taj

27


West End, Bangalore; Wasabi and Varq at The Taj Mahal Hotel, New Delhi and Souk at Taj Bengal, Kolkata. The BombayBrasserie, our signature Indian restaurant in London was closed for renovation and reopened in December 2008 to fabulousreviews. To enhance the guest experience, we have added plunge pools in 21 Deluxe Lagoon Villas at The Taj Exotica Resort& Spa, Maldives and a new boardroom was launched at the Rambagh Palace Jaipur.

The impressive $100 million renovation of the iconic Beaux Arts flagship property of Taj Hotels on Fifth Avenue overlookingCentral Park will see the unveiling of new guestroom and bath interiors. The rooms at The Pierre in New York were notavailable during the year due to ongoing renovations; the hotel re-opened on 1st June, 2009.

The inviting, residential-style décor will complement The Pierre’s classic heritage and retain the hotel’s understated elegance.High ceilings, abundant natural light, rich woods, custom furnishings and hand-carved carpets have enhanced the experience,designed with comfort and quiet luxury in mind. All guestrooms will provide an interactive 40-inch flat screen television, aBose Wave Studio with iPod docking station, Wi-Fi, a working desk and large sound-insulated, energy efficient windows.New Turkish marble-clad bathrooms will feature glass-walled showers with oversized shower heads and steam-free mirrors.

Expansion continued in the other hotel divisions as well. In the course of the year, the Taj Upper Upscale Brand added 4 newproperties in 4 cities –Vivanta by Taj, Bangalore, Taj Mount Road at Chennai and Taj Residency at Trivandrum. Theerstwhile Taj Coral Reef will reopen this summer as Vivanta by Taj – Coral Reef, Maldives. The Brand has an aggressivegrowth plan with 9 projects currently under various stages of implementation which will enhance its foot-print across 9cities. All renovation plans and new builds are in keeping with the requirement of the new age guests incorporating theirrequirements iPod docking stations, rain showers, RFID locks, stylish chic interiors, private lounges, etc.

In keeping with changing guest requirements and to arrive at relevant and differentiating brand standards, a workshop witha reputed international branding consultancy was conducted. Associates at various levels were involved in conceptualisingthe music philosophy, food philosophy, healthy options and 24 x 7 in-room dining menus amongst other initiatives.

The wandering chef concept, global coffee experience, multi skilling and multi tasking of associates, new grooming standardand innovative training methods such as dance and drama were introduced to keep abreast of changing guest expectations.

In accordance with your company’s brand architecture, The Gateway Hotels brand, comprising of Upscale, full servicehotels and resorts was launched in September 2008. The Gateway Hotels brand is a pan-India network of hotels and resortsthat offers business and leisure travelers a product that has been designed keeping the modern nomad in mind.

The Gateway Hotel philosophy is to keep things simple. This is why Gateway hotels are divided into 7 simple zones - Stay,Hangout, Meet, Work, Workout, Unwind and Explore. Round-the-clock services and menus help our guests take advantageof what every day has to offer and the focus is always on creating sanctuaries that refresh, refuel and renew the modern daytraveler.

Healthy living, fitness and health consciousness are an increasingly important part of our guests’ daily lives. We helpguests stay healthy through exercise and the traditional Indian practice of Yoga. Yoga mats and instruction videos areoffered on The Gateway in-house TV channel and the branded fitness centres are available 24 x 7 for guests. Guests canplan their workout schedule taking advantage of the early opening hours for swimming pools.

During the year, aptly named as the ‘Year of the Associate’, your company launched various initiatives to engage associatesand improve their well being and satisfaction, morale and motivation. We recorded excellent Employee Satisfaction scoresas reported via an annual survey conducted by a respected independent polling agency.

The unfortunate events of 26th November 2008 at our flagship, the much loved “Taj of Apollo Bunder” serve as a reminderof the dedication to service of our associates and their heroic acts will go down in the annals of hospitality. Motivated bya clear and unyielding conviction to honour the courage of these brave men and women, we are resolute in our goal ofrestoring The Taj Mahal Palace & Tower to its original grandeur and will leave no stone unturned towards achieving this.The restoration work at the hotel is well underway, involving the best international designers and experts and we have nodoubt that The Taj Mahal Palace & Tower, Mumbai will rise again and rightfully claim its place among the legendary hotelsof the world.


28

As a commitment to the safety and security of our guests and employees, the process of independent external audits toevaluate the preparedness of our hotels has been further reinforced. Specialist agencies have been retained to evaluate thefire safety preparedness, food safety, general hygiene and cleanliness at our hotels. An international security consultancyhas been appointed to provide expert inputs and training to our associates.

EARTH (Environmental Awareness and Renewal at Taj Hotels)

To demonstrate our commitment to the Environment, EARTH (Environmental Awareness and Renewal at Taj Hotels) visionwas launched in August 2008 by the Managing Director. The EARTH program aims to put initiatives in place to reduce theimpact of our hotels’ daily operations on the environment. This means that we progressively consume less and systematicallyswitch to renewable energy sources and manage our dry and wet waste effectively. As part of the EARTH initiative we haveundertaken certification by an external agency for all our hotels in a phased manner. The certification standard complieswith the Mohonk Agreement which outlines the guidelines and principles and the standards provide a framework tomeasure, monitor and improve environmental and social performance. The external auditors adhere to the principles andrequirements of ISO 17021:2006.

Standards focus on performance outcomes in the following areas:

� Greenhouse gas emissions

� Energy efficiency, conservation and management

� Management of freshwater resources� Ecosystem conservation and management

� Management of social and cultural issues� Land use planning and management

� Air quality protection and noise control

� Waste water management� Solid waste management

� Storage of environmentally harmful substances

Since commencement in July 2008, 55 of our hotels have achieved certification in 3 phases and eight hotels have achievedSILVER certification in the first attempt itself. Your company aims to have all hotels certified by the end of 2009-10.

Business Excellence

1) Brand Standards –

IHCL continues to take significant steps to enhance guest experience by improving the product and service levels to be inline with the best-in-class hotels, in each of the segments in which it operates. Brand Experience standards have beenredefined, infusing global trends and guest preferences.

The Business Excellence Team partnered with Hotel Operations Teams to -

� Ensure consistent brand standards based on international benchmarking

� Monitor and measure customer satisfaction to bring about sharper customer focus and implement service improvements.

� Explore the latest trends hospitality for absorption / implementation into the group.

� Set standards and audit products created by new projects or renovation

� Update operating manuals for all brands, products and services.

In your company’s quest to benchmark against the world’s finest hotels, it partnered with an internationally acknowledgedexpert on hotel experiences to refine the Taj Experience Standards, thus enabling it to establish a unique identity in itsendeavor to clearly differentiate the Taj brand. World-class trainers trained associates in competencies such as personalbutler services, concierge, sommeliers and bartenders.

29


Taj fosters and encourages associate engagement in improving processes and procedures to ensure guest delight. This isreflected in the Process Improvement Teams deployed across the organization. These teams meet, analyze and implementimprovements in operational processes that to impact guest satisfaction positively.

2) Mystery Shopper Audits –

Mystery Shopper Audits continued to help your company improve associate guest service awareness by the use of auditsand detailed narratives. These audits provided an unbiased opinion of how your company is perceived by its guests anduniquely assesses each moment of truth.

3) Customer Feedback System (CFS) -

The Customer Feedback System was further refined to capture guest feedback from multiple channels. An advanced CFSdata warehouse now provides sharper and more insightful data to all user departments thus ensuring that guest feedbackdrives improvement. The system is functional at hotels across the organization, including international locations and sales& marketing offices.

4) Guest Satisfaction Tracking System (GSTS) –

The online GSTS survey allows guests to record their feedback on the entire gamut of products and services being offeredby Taj Hotels, at the convenience of the guests.GSTS includes extensive evaluation parameters pertaining to ALL aspectsof a resident guest’s experience at the hotel. These evaluation parameters have been designed to translate guest expectationsinto tangible, measurable information which is used for decision making. The GSTS form was redesigned based on guestfeedback to capture feedback on all touch points during a guest’s stay. This year, your company introduced feedbackmechanisms to capture guest feedback from non-resident guests using the restaurants.

5) Tata Business Excellence Model:

Your Company applied as one organization for the Tata Business Excellence Model (TBEM) Assessment. The feedbackfrom past assessments has gone a long way in helping your company improve its processes to deliver a robust businessperformance, building a high sense of associate commitment in a high performance work culture.

6) Accreditation Processes -

ISO 22000

Your company has taken the lead in the implementation of ISO 22000 (a food safety management system). This is an upgradeover the earlier Hazard Analysis and Critical Control Point (HACCP) certifications. Several hotels were certified last year.

ISO 14000 / Environment Management System

The ISO has developed international environmental management standards which are known as the ISO 14000. ISO 14000provides a framework for the development of an environmental management system and the supporting audit programme.Your company is conscious of the role it plays in impacting the environment and has hence commenced implementation ofISO 14000.

ISO 18001 / Occupational Health and Safety Assessment Series for Health and Safety Management Systems

Your company has adopted a systematic certification approach to manage Health and Safety for all associates and guests.OHSAS 18001 is the assessment specification used by Taj which promotes a safe and healthy working environment.

Sales & Marketing: Key Initiatives

Launch of Gateway Hotel brand :”The Gateway Hotel” was launched on 11th September 2008 with a press conference inMumbai. A national advertising campaign was launched on 12th September, 2008 with full page advertisement in Times ofIndia and all key editions of Economic times. The campaign also has an outdoor element, with hoardings and airporttranslites in Mumbai, Delhi, Chennai and Bangalore. The campaign had received very good response from the market and


30

was able to generate a buzz amongst all key stakeholders and received extensive coverage in media. All key messaging wascovered – brand proposition, footprint and growth strategy. The Gateway Hotel is a pan-India network of hotels and resortsthat offers business and leisure travelers a hotel designed, keeping the modern nomad in mind. At the Gateway Hotel, webelieve in keeping things simple and that is why, these hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work,Workout, Unwind and Explore. These hotels offer round the clock services or menus that offer a mix of options where theguest can either choose to indulge or to eat healthy. The “warm welcome “makes the guests feel at home, away from homeand the crisp and courteous service empowers them to get more done with greater effectiveness and control. The serviceprovided is effortless, simple, never overwhelming, and always warm. The focus of these hotels is to create sanctuaries thatrefresh, refuel and renew the modern day traveler. The Gateway Hotel today is in 19 cities with 12 hotels under development.

The brand now has its own website – www.thegatewayhotel.com. The website was designed by Razor fish, keeping in mindthe brand values of contemporary and crisp. The website is very user friendly with reservation tool on very page to enhanceconvenience. The visual experience is much stronger with images on every page and has a new contemporary lay out whichallows users to pan between images and information. While it is a stand alone website, Gateway and Taj website areinterlinked at appropriate sections.

Re Opening of The Taj Mahal Tower, Mumbai : Post 26/11, a crisis management cell was put in place. Some key activitiesundertaken by sales and marketing involved managing and communicating with customers, information dissemination,managing the environment and ensuring business continuity. To put all this into effect, a communication centre was set upwhich was manned on a 24/7 basis during this period. Additionally, the Taj micro site was set up within hours of the crisistaking place to give regular updates and to provide necessary information to customers during and post the crisis. Immediatelyafter the crisis, we released the “I Will Prevail” ad to reassure our guest and to emphasize on business continuity. The adwas released in key domestic and international markets. It received an overwhelmingly response from people across theworld and also from our media partners, who supported us by giving heavily discounted and in many cases, complimentaryadvertising space. Post the crisis, a “Guest Outreach Program” was put into place to establish contact with all the guestswho were staying at the hotel during those days to reach out and empathize with them.

From 21st December, 2008 onwards, advertisements were released in the domestic market, announcing the reopening of theTower wing and also welcoming the guest back home. The Tower Wing reopened on 21st December, 2008 with most of theF & B outlets. The event started with a multi religion prayer service followed by felicitation of all the hotel staff who wereon duty that fateful night. Key clients and stakeholders expressed their support and over 1000 guests graced this occasion.Marketing initiatives for re opening the hotel included re-opening advertisements in key domestic and internationalpublications, press release and E Mailers to our 2,00,000 strong databases. Integrated marketing initiatives to build businessare ongoing, like F& B promotions, Stay Over Packages, Electronic marketing and PR initiatives.

� Re Launch of Bombay Brasserie: Bombay Brasserie, reopened on 5th January 2009 after an extensive refurbishmentprogramme. The restaurant has a completely new interior that retains the charm of the original whilst still being chicand contemporary. To celebrate the occasion, The Bombay Brasserie joined forces with Tatler magazine to co-host astar-studded party. The restaurant has been receiving excellent reviews and the same have been showcased on thenew website. All marketing collaterals including the logo, signage, menu cards and other collaterals, was revamped,keeping the new theme and décor of the restaurant. A new micro site – www.bombaybrassierielondon.com has alsobeen launched with all information on the restaurant.

� Launch of 2009 as “Visit India”: this is an initiative by the Ministry of tourism to attract inbound tourists fromvarious markets across the globe. MOT has partnered with major hotel chains in India, major airlines and IATO, todevelop a special “Visit India “offer and marketing campaign. The Taj Group has taken a lead role in creating thisconsumer offer which involves one complimentary service to the guest during his stay in India (which includes hotel,airline and tour component), on the purchase of one trip to India during the period April 1, 2009 to Dec 31, 2009. TheVisit India campaign also includes pro active sourcing of media press trips, travel agents educational tours and roadshows across various regions of the world, targeting travel trade and consumers.

31


� Taj Hotels Resorts and Palaces have signed on as the “hero partner”: or First amongst Equals partner for thePlatinum Charge card in India with exclusive lodging offers and Taj Epicure Plus offered as an opt in card. We haveleveraged our relationship to get a preferential status amongst all the Platinum charge card partners. This partnershipentails embedded “lodging partnership” and an opt in offer for the Taj Epicure Plus and privileges on other selectservices like Khazana, Jiva Spas etc.

Outlook

On the backdrop of economic slowdown, the outlook for the hotel industry in the coming year does not look bright. Butlooking beyond the current crisis, Travel & Tourism is expected to resume its leading, dynamic role in global growth. Indiahaving a diverse cultural and geographical centre will continue to attract tourist from all over the world. With the recoveryof global economy which is expected around end of this fiscal, the flow of tourist is expected to grow. Tourism revenues areexpected to rise by 42% from 2007 to 2017, according to a report of Indian Brand Equity Foundation on Tourism andHospitality. Certain major events like the Commonwealth Games planned in Delhi in 2010 would require addition to theinventory of rooms which would again help the hotel industry. Despite economic slowdown, your Company wouldaggressively pursue its strategy both in the domestic as well as the international market at different price points from theSmart Basic Hotels to the luxury segments. With its leadership position in most markets in the luxury and leisure segments,your Company expects to achieve sustainable and profitable growth in the coming years.

Management discussion & Analysis of Operating Results and Financial Positions

The Annual Report contains Financial Statements of your Company, both on a stand-alone and consolidated basis. Ananalysis of the financial affairs is discussed below under summarized headings.

Results of Operations for the year ended March 31, 2009

Standalone Financial Results

The following table sets forth financial information for the Company for the year ended March 31, 2009Rs/Crores

Particulars Year ended

March 31, 2009 March 31, 2008IncomeSales & Other operating income 1706.52 1823.16Expenditure

Consumption of Raw Materials 114.54 128.24Staff Costs 389.80 312.77License Fees 97.51 104.73Fuel, Power and Light 98.50 92.61Depreciation 94.46 85.48Other Expenditure 463.17 436.00

Less: Unallocated expenditure during construction periodtransferred to Fixed Assets (10.41) (11.42)Total Expenditure 1247.57 1148.41Profit before Interest and Tax 458.95 674.75Interest (net) 90.44 94.28Profit before Tax and Exceptional Items 368.51 580.47Exceptional Items 6.21 -Profit before Tax 362.30 580.47Provision for tax (incl for earlier years) 128.27 203.01Profit after Tax 234.03 377.46


32

Revenues:

The summary of total income is provided in the table below:

Rs/Crores

Particulars Year Ended% Change

March 31, 2009 March 31, 2008

Room Income 843.19 978.71 (14)Food & Beverage Income 508.99 585.32 (13)

Other Operating Income 267.39 200.48 33

Non-Operating Income 86.95 58.65 48Total Income 1706.52 1823.16 (6)

Statistical Information

Average Room Rate (Rupees) 10504 10674 (2)Occupancy (%) 66 73 - 7% pts

� Room sales were mainly driven by Average Room Rate being maintained at previous year levels albit a drop inoccupancy rates.

� Reduction in Food & Beverages sales due to lower room occupancy.

� Other operating income mainly includes income from management fees, insurance claim on account of businessinterruption and other operating income from hotels. Other Operating Income for the year includes Rs 85.54 crores forclaim for Business Interruption filed on account of closure of Taj Mahal Palace & Tower following the terrorist attackon November 26, 2008.

� Non-operating income was higher mainly due to Dividend Income earned on Surplus Rights Issue proceeds investedwith various mutual funds.

Operating expenses:

The operating expenses increased by 8% from Rs. 1148.41 crores to Rs. 1247.57 crores. The increase was mainly on accountof payroll to keep in line with competition and industry, wage settlement and reduction in interest rates leading to highergratuity liabilities, increase in advertisement and general administration expenses. The increased advertisement expensesare an endeavour to make Taj a global brand and create awareness of its rapid international expansion.

Depreciation for the year was higher due to addition of Vivanta, Bangalore and capital expenditure incurred to upgrade ourproperties.

Profit before Interest and Tax (PBIT):

The PBIT was Rs 458.95 as compared to Rs 674.75 crores reflecting a reduction by 32%.

Interest costs:

Interest cost at Rs. 90.44 crores for the year ended March 31, 2009 as compared to Rs. 94.28 crores in the previous year. Inview of the increase in debt levels, gross interest cost increased to Rs 122.21 crores as compared to Rs 101.30 crores. Netinterest costs were lower on account of interest earned on unutilized rights issue proceeds.

Profit before Tax:

Profit before tax, was Rs. 362.30 crores as compared to Rs. 580.47 crores achieved in the previous year.

33


Profit after Tax:

Profit after tax for 2008/09 reduced to Rs. 234.03 crores from Rs. 377.46 crores.

Cash Flow DataRs/Crores


March 31, 2009 March 31, 2008

Net Cash from operating activities 294.31 522.96

Net cash used for investing activities (1105.74) (541.57)Net cash from financing activities 1182.59 24.29

Net Increase in cash and cash equivalents 371.16 5.68

Operating Activities:

Net cash from operating activities was lower at Rs 294.31 crores as compared to Rs 522.96 crores in the previous year, mainlydue to lower operational profits and advance paid for purchase of Company to acquire a hotel property.

Investing Activities:

Net cash used for investing activities of Rs 1105.74 was mainly on account of amounts spent towards expansion plans,renovation of existing properties and replacement/up-gradation of existing fixed assets. The major spends were as follows:

� Rs. 262.44 crores spent towards expansion plans, renovation of existing properties and replacement/up-gradation ofexisting fixed assets.

� Rs 152.96 crores for purchase of investment.

� Rs 482.72 crores invested in subsidiaries companies for renovation of The Pierre, New York and repayment of existingdebt in various subsidiaries companies.

Financing Activities

The Company during the year raised Rs 843.87 crores by issue of equity and Rs 602.77 crores as 6% Secured Non-convertible debentures on rights issue basis. Further, the Company also raised Rs 300 crores by issue of 11.80% SecuredNon-Convertible Debentures on a private placement basis. In view of the availability of the liquidity, the Company repaidall its short term debt existing as at March 31, 2008 and prepaid the secured term loan amounting to Rs 83.29 crores takenfrom Housing Development Finance Corporation Limited.

Certain Financial Ratios for Standalone Financials:

Rs/Crores


March 31, 2009 March 31, 2008

Net Debt to Total Capital (total debt less cash and cashequivalents divided by the sum of net debt and net worth) 0.30 0.34

Net Debt to Equity (total debt less cash and cashequivalents divided by the net worth) 0.43 0.53


34

Consolidated Financial Results

Your Company has Consolidated its Financial Statements with those of its Subsidiaries, Joint Ventures and Associates(together referred as ‘Group Companies’ or ‘Group’) in accordance with generally accepted accounting practices prevailingin India. The Consolidated statements include the financial position of Subsidiaries on line by line basis, Jointly Controlledentities on a line by line basis to the extent of proportionate holding and Associates by a one-line consolidation of share ofprofit after tax.

The following table sets forth the Consolidated Financial results for the year ended March 31, 2009.


March 31, 2009 March 31, 2008

Income

Sales & Other operating income 2686.13 2920.03

Other Income 70.50 92.59

Share of Profit in Associates 25.49 64.18

Total Income 2782.12 3076.80

Expenditure

Consumption of Raw Materials 277.22 278.19

Staff Costs 855.16 764.44

License Fees 106.42 113.64

Fuel, Power and Light 167.74 154.68

Depreciation 188.53 167.62

Other Expenditure 790.38 735.95

Less: Unallocated expenditure during construction

period transferred to Fixed Assets (22.55) (18.90)

Total Expenditure 2362.90 2195.62

Profit before Interest and Tax 419.22 881.18

Interest (net) 230.46 202.32

Profit before Tax and Exceptional Items 188.76 678.86

Exceptional Items 4.76 54.16

Profit before Tax 184.00 624.70

Provision for tax (incl for earlier years) 155.77 246.98

Profit after Tax before minority interest 28.23 377.72

Minority Interest 15.77 22.74

Profit after Tax 12.46 354.98

Total Income:

The Company, its subsidiaries and its Jointly Controlled Entities (the Group) are primarily engaged in the business ofhoteliering with the exception of two Jointly Controlled Entities, which are engaged in the business of Air Catering. Theother areas of business primarily include Ready to Eat / Ready to Cook foods business.

35


The segment wise break-up of revenue is as follows:

Rs/Crores


March 31, 2009 March 31, 2008

Hoteliering 2364.25 2641.15

Air Catering 281.65 298.87Others 59.24 25.93

Unallocable Income 51.49 46.67

Share of Profit in Associates 25.49 64.18Total Income 2782.12 3076.80

� Hoteliering revenue is lower due to the slowdown of demand on account of current market condition, closure of ThePierre, New York and Coral Reef Maldives.

� Air Catering business showed only marginal drop inspite of current economic downturn on account of increasedmarket share through new catering units in Amritsar, Bangalore and Goa.

� Unallocable Income represents Dividend Income and Profit on sale of Investments.

� Share of profit in Associates represents Company’s proportionate share in Profit After tax of its associates.

Operating expenses:

The operating expenses increased by 8% from Rs. 2195.62 crores to Rs. 2362.90 crores. The increase was mainly on accountof payroll to keep in line with competition and industry and impact of reduction in benchmark interest on retirement costs,partially off-set by lower employee costs in The Pierre on account of closure of property for renovation. The increasedadvertisement expenses are an endeavour to make Taj a global brand and create awareness of its rapid internationalexpansion.

Consolidated Profits:

Profit Before tax & Interest was lower at Rs 419.22 crores as compared to Rs 881.18 crores achieved in the previous financialyear on account of global financial meltdown which affected the industry as also the Company’s operating in all its keymarkets.

Interest costs:

Interest cost was higher at Rs. 230.46 crores for the year ended March 31, 2009 as compared to Rs. 202.32 crores in theprevious year. The gross interest costs were higher at Rs 271.09 crores as compared to Rs 220.29 crores mainly on accountof Rs 902.77 crores raised by issuances of Secured Non-Convertible Debentures and impact of loan taken for acquisition ofshares of Orient-Express Hotels Ltd. The increase in gross interest costs was partially off-set by interest earned onunutilized Rights Issue proceeds.

Profit after Tax:

Profit after Tax was at Rs 12.46 crores as compared to Rs 354.98 crores achieved in the previous year.


36

Cash Flow Data

The following table sets forth selected items from the consolidated cash flow statements:

Rs/Crores


March 31, 2009 March 31, 2008

Net Cash from operating activities 338.97 579.85

Net cash used for investing activities (1161.05) (1650.98)Net cash from financing activities 1231.56 1146.19

Net Increase in cash and cash equivalents 409.48 75.06

Operating Activities:

Net cash from operating activities was lower at Rs 338.97 crores as compared to Rs 579.85 crores in the previous year, mainlydue to lower operating profit for the year.

Investing Activities

Net cash used for investing activities was mainly on account of

� Rs 793.64 crores were utilized towards addition to Fixed Assets, mainly covering the renovation of The Pierre, NewYork, ongoing construction of a new property in South Africa and capital expenditure incurred for renovation ofexisting properties and replacement/up-gradation of existing fixed assets.

� Rs 250 crores paid as advance consideration towards acquisition of shares of the Company that owns the Sea Rockhotel in Mumbai.

Financing Activities

Net cash raised from financing activities was mainly due to

� The Company during the year raised Rs 843.87 crores by issue of Equity and Rs 602.77 crores as 6% Secured Non-Convertible Debentures on Rights Issue basis.

� The Company also raised Rs 300 crores by issue of 11.80% Secured Non-Convertible Debentures on a private placementbasis.

� In view of the availability of the liquidity, the Company repaid

� All its short term debt existing as at March 31, 2008 on the standalone Balance Sheet.

� Prepaid the secured term loan amounting to Rs 83.29 crores taken from Housing Development Finance CorporationLimited.

� Prepaid debt of its international subsidiaries amounting to US$ 25 million.

Rs/Crores


March 31, 2009 March 31, 2008

Net Debt to Total Capital (total debt less cash and cash equivalentsby the sum of net debt and net worth) 0.55 0.59

Net Debt to Equity (total debt less cash and bank balances dividedby the net worth) 1.25 1.41

37


RISKS & CONCERNS

Industry Risk

General economic conditions

Hotel business in general is sensitive to the economic environment. The hotel sector may be unfavourably affected bychanges in global and domestic economies, changes in local market conditions, excess hotel room supply, reduced internationalor local demand for hotel rooms and associated services, competition in the industry, government policies and regulations,fluctuations in interest rates and foreign exchange rates and other natural and social factors. Since demand for hotels isaffected by world economic growth, a global recession could lead to a downturn in the hotel industry.

Socio-political risks

In addition to economic risks, your Company faces risks from the socio-political environment, internationally as well aswithin the country and is affected by events like political instability, conflict between nations, threat of terrorist activities,occurrence of infectious diseases, extreme weather conditions and natural calamities, etc. which may affect the level oftravel and business activity.

Company specific Risks

The Company specific risks remain by and large the same as enumerated last year. These are:

Heavy Dependence on India

A significant portion of your Company’s revenues are realised from its Indian operations, making it susceptible to domesticsociopolitical and economic conditions. Moreover, within India, the operations and earnings are primarily concentrated inhotel properties in five cities.

Dependence on the high-end Luxury segment

Luxury hotels contribute a significant proportion of the total revenue and earnings of your Company. This segment isaffected by the international events and travel behaviour and suffers from high operating leverage. Adverse developmentaffecting these hotels or the cities in which they operate could have a materially adverse effect on the Taj Group.

Competition from International Hotel Chains

The Indian subcontinent, South East Asia and Asia Pacific with high growth rates have become the focus area of majorinternational chains. Several of these chains have announced their plans to establish hotels to take advantage of thedemand supply imbalance. These entrants are expected to intensify the competitive environment. The success of Taj Groupwill be dependent upon its ability to compete in areas such as room rates, quality of accommodation, brand recognition,service level, convenience of location and to a lesser extent, the quality and scope of other amenities, including food andbeverage facilities.

Increased outbound travel

Recent competitiveness in international airfares has resulted in destinations like Europe, South East Asia and Australiabecoming more affordable to the average Indian traveler. This has increased outbound travel and presents a risk to thedomestic segment for leisure resorts.

High Operating Leverage

The industry in general has a high operating leverage which has further increased with on-going renovations and productupgrades. However, it has been observed that your Company has been able to earn higher revenues with acceptance of itsproducts in the market and improved economic conditions.


38

Foreign exchange fluctuation risks

Your Company also has a portfolio of foreign currency debt, in respect of which it faces exposure to fluctuations in currencyas well as interest rate risks.

Risk mitigation Initiatives

Your Company employs various policies and methods to counter these risks effectively, as enumerated below:

� In view of the recent terrorist attack, the Company has taken various measures to enhance guest and proper securityacross all its properties.

� To reduce the geographical and economic risk, your Company is looking at increasing its presence internationally inkey gateway cities and resorts in South East Asia, West Asia and the Indian Ocean rim.

� To counter the risk of dependence on the high end luxury segment, your Company is entering the mid-market segmentwhich is comparatively insulated from political and social changes in India. The Company through its subsidiaryRoots Corporation Limited is also increasing its presence in ‘Budget Hotel’ segment under the brand ‘Ginger’.

� To successfully counter the risk from growing competition and new properties, your Company is renovating andrepositioning all its key properties. It is also improving its service standards in consultation with international expertsto provide exceptional service consistently across its hotels.

� Operating and financial leverage, by expansion through management contracts and leveraging the strengths of itsAssociates and subsidiary companies.

� Your Company closely monitors foreign currency exposures and hedges in consultation with its advisors. Netexposures, including those from derivative instruments, are kept at acceptable levels and within overall limits approvedby the Board. These exposures are subjected to regular reviews.

Internal control systems and their adequacy

Your Company has reviewed internal controls and its effectiveness through the internal audit process. Internal audits wereundertaken for every operational Unit and all major corporate functions under the direction of the Group Internal Auditdepartment. The focus of these reviews are as follow:

� Identify weaknesses and areas of improvement

� Compliance with defined policies and processes

� Safeguarding of tangible and intangible assets

� Management of business and operational risks

� Compliance with applicable statutes

� Compliance with the Tata Code of Conduct

The ‘Taj Positive Assurance Model’, which is an objective methodology of providing a positive assurance based on theaudits of operating units and corporate functions, was institutionalized in 2004/05 as a standard audit process in conjunctionwith empanelled internal audit firms. While this methodology was adopted for select Units in the year 2004/05 and 2005/06,it was successfully implemented at all operational Units including all International Units during the last three years. Thenovelty of this model is that it is a convergence of Process Framework, Risk and Control Matrix and a Scoring Matrix. Aframework developed for each functional area identified on the basis of an assessment of risk and control and provides ascore, allowing the Unit to improve on high risk and weak areas.

The Audit Committee of the Board oversees the adequacy of the internal control environment through regular reviews ofthe audit findings and monitoring implementations of internal audit recommendations through the compliance reportssubmitted to them.

39


Human Resources & Industrial Relations

In keeping with the established traditions of Taj, we have been continuously enhancing people practices to make itemployee friendly, to create a congenial and high performance work culture across the company. Since ‘guest’ is at the heartof our business, and receives service through associate actions, ensuring a well trained, motivated frontline and back-endwork force is central to our business. Some specific initiatives implemented to achieve this during the year 2008-09 andfocused efforts to manage work force costs more efficiently to cope with the current recessionary trends are listed below :A. HR initiatives for building a high performance work culture1. Hewitt Best Employers Award- Taj Hotels Palaces and Resorts have been recognized as the third best employer in the

country by Hewitt Associates on a nation wide survey on HR Practices, ahead of all other hospitality companies inIndia, like the Marriotts, Oberois and ITC. Some of the key people initiatives in the group like the PerformanceManagement System, Employee engagement i.e. Year of the Associate, and the high potential leadership programcalled EL Taj (Emerging Leader of the Taj) are considered by the Hewitt Associates as the best people practices in thecountry.

2. Employee Satisfaction Scores - Gold Standards under Gallup Survey - Taj Hotels Palaces and Resorts have beenadjudged as reaching the gold standard on the overall satisfaction of employee survey conducted for 2009 by theGallup Organization. We have scored the highest Q12 grand mean in the Tata Group and we are in the top quartileperformance in Asia Pacific and highest in Indian organizations employing more than ten thousand plus employees,with a grand mean Q12 of 4.28.Some specific initiatives implemented during the year 2008-09 and focused efforts to manage work force costs moreefficiently to cope with the current recessionary trends are listed below :a. Career Architecture. The job architecture exercise aims at classifying of jobs scientifically and defining roles

and responsibilities to align with the strategic goals of the company. Each job is assessed to establish therelative internal value of the job within the organization. This will provide an equitable basis for broad bandingcompensation, grading system, job transfers, career / succession planning and other related HR interventions.This exercise will also identify areas of organizational inefficiencies in terms of non value add reportingrelationships.

b. Regional Training Centers. With a view to strengthen operational skills of front line staff, which is core to thehotel business and to hire and develop entry level talent in the operational areas, Regional Training Centershave been commissioned in key cities like Chennai, Bangalore, Goa, Mumbai and Delhi. These Regional TrainingCenters, apart from training the existing staff in the hotels based in that city, will also train young apprenticesin various skills like F&B (Services and Cookery) and Housekeeping and facilitate certification in different skillsets.

c. SPEED program This is a Career Development Program for Operational Associates in the hotels viz. SPEED(Special Program for Employee Education & Development). This program is a part of our endeavour to provideopportunities for talented associates, working in operational departments (including FTCs) to advance theircareers into supervisory / managerial positions at a quicker pace.All the above measures have yielded a positive result as reflected in the positive Employee satisfaction surveyscores. Work force productivity standards have also improved from 1:3 room to employee ratio to 1:2.7.

B. Initiatives for efficient work force cost management for this year (2009-10)1. Freeze on recruitments .Given the current slowdown in business, a mandate has been issued across the company to

put a freeze on recruitment, including attrition backfill hiring. We have intensified our efforts to redeploy staff intovacant positions internally.

2. Filling most positions in the new hotels through internal redeployment .For all new hotels that are opening up in thenear future like the new VIVANTA by Taj in Panjim, Bangalore, Hyderabad and the new Luxury hotel - FalaknumaPalace, executive and supervisory positions will be filled through internal redeployment.

3. Holiday for salary increase and accumulation of earned leave etc. Increases in salaries will be frozen for the year2009-10. Also with a view to decrease the liability on accrued leave all executives were mandated to fully avail theirprivilege leave.


40

AWARDS & ACCLAIMS

Date Hotel and Details of the Award

GROUP Taj Hotels Resorts and Palaces

April ‘2009 Hewitt Associates’ third Best Employers in India 2009 in partnership with Outlook Business 81%employees stated that future career opportunities at their organization seem to look good

April ‘2008 IHCL one of 5 Indian firms in world’s 25 ‘unsung’ innovative companies - Business Standard Magazine

Nov ‘2008 The Taj Hotels Resorts & Palaces ‘No room for the Ordinary’ advertising campaign print media category2008 PATA Gold Award in the Marketing – Hospitality category

Oct ‘2008 Skal International, International Association of Travel and Tourism Professionals Ecotourism Award2008 - Building Livelihoods, Eco Taj India winner of the Ecotourism Award in Rural Accommodation

LUXURY HOTELS

The Taj Mahal Palace & Tower, Mumbai

April ‘2009 Taj Wellington Mews, Mumbai ‘Best Day Spa’ Pevonia Asia Spa India Awards 2008

March ‘2009 Ranked 1st in Asiamoney’s Travel Poll 2009. Asia’s Best Hotels in Individual Cities

March ‘2009 National Tourism Award - Atithi Devo Bhava: Pride of India for exemplary service going beyond the callof duty.

March ‘2009 Economic Times Special Corporate Citizen Award for its brave staff for putting service before self , forsaving the lives of others at the risk of their own.

Feb-Mar ‘2009 DestinAsian Readers’ Choice Awards 2009 - Best Hotel in Mumbai

Feb ‘2009 National Tourism Award: new award “The pride of India”

Feb ‘2009 2009 Tablet Hotels Selection Award - Hotels Worldwide Honored for Excellence in Industry

Nov ‘2008 Conde Nast Traveler, USA Reader’s Choice Awards - Best of the Best Top 100 in Asia

Nov ‘2008 2nd Place in the best hotels in Mumbai category for 2008 by FinanceAsia’s influential audience+A1

Sept ‘2008 Institutional Investor Magazine Survey September ’08 - The World’s Best Hotels 2008-09 - Top 100hotels

Sept ‘2008 Forbes Traveler 400, USA The World’s Very Best Hotels & Resorts

Sept ‘2008 Condé Nast Traveller Readers’ Travel Awards, UK - TMPT Best Overseas Business Hotel in the Worldand 23rd within the World’s Top 100 for the best travel experiences worldwide

Sept ‘2008 Smart Travel Asia Magazine Top 25 list - Best Business Hotels of Asia 2008 Best In Travel

July ‘2008 Wine Spectator - Best of Award of Excellence - The Zodiac Grill, Wasabi by Morimoto, Golden Dragon,Souk, Masala Kraft

2008 Conde Nast Traveller, UK - 4th Annual Gold List of the Best Hotels in the World - Best for Food

2008 Conde Nast Traveler, USA - Gold List 2008

Taj Lands End, Mumbai

July ‘2008 Wine Spectator Award of Excellence - Pure at the Taj Lands End, Mumbai

Taj Coromandel Hotel, Chennai

July ‘2008 Wine Spectator Award of Excellence - Prego at the Taj Coromandel Hotel, Chennai.

June ‘2008 Conde Nast Traveler, USA - Prego-Taj Coromandel, Chennai - Hot List Tables 2008

41


Taj Lake Palace, Udaipur

May ‘2009 Conde Nast Traveler, USA Hot List 2009 - 50 New Spas to Lose Yourself in - Spa Boat at Taj Lake Palace,Udaipur

March ‘2009 GAYOT.com - The Top 10 Castle Hotels Worldwide - Taj Lake Palace, Udaipur

Dec ‘2008 The Gallivanter’s Guide 2009 - Editor’s Choice Award for Excellence

Nov ‘2008 Conde Nast Traveler, USA Reader’s Choice Awards - Best of the Best Top 100


May ‘2008 World Luna Spa awards, Italy


Umaid Bhawan Palace, Jodhpur

April ‘2009 Best Palace in The 2009 Best List of Vanity Fair, U.K

Ministry of Tourism for National Tourism Awards – 2007 – 08- Best Five Star Deluxe Hotel Category


Oct ‘2008 Forbes Traveler 400, USA The World’s Very Best Hotels & Resorts

Sept ‘2008 Most Romantic Retreats Worldwide - Conde Nast Traveller, U.K.

July ‘2008 Wine Spectator Award of Excellence – Risala

June ‘2008 T+L USA “IT List” editors’ picks of the best new hotels in the world. Top pick for “renovation”

June ‘2008 T+L “IT LIST” of 30 Best New Hotels around the Globe Editors’ Top Picks for 2008, Asia, Australia andNew Zealand

May ‘2008 Gold E Award of Excellence one of the World’s Best Hotels by ENTRÉE dedicated to very special placesfor the discriminating and sophisticated traveller.

Rambagh Palace, Jaipur

Jan ‘2009 Conde Nast Traveller, UK - The Gold List 2009 - World’s Best Hotels for Ambience & Design in Asia


Sept ‘2008 Tatler Spa Guide 2008 the 101 Best Spas in the world

Sept ‘2008 The 10th Condé Nast Traveller Readers’ Travel Awards, UK - Overseas Leisure Hotels: Asia & theIndian Subcontinent

July ‘2008 Wine Spectator Award of Excellence - Rajput Room, Suvarna Mahal

Taj Palace Hotel, New Delhi

May ‘2009 Times food Guide, Delhi, 2009 - the Orient Express restaurant under the “Best European” category

July ‘2008 Wine Spectator - Best of Award of Excellence - Kafe Fontana, Masala Art, Orient Express, Tea House ofthe August Moon

Taj Mahal Hotel, New Delhi

May ‘2009 Conde Nast Traveler, USA 50 Hot Tables – Varq

May ‘2009 Times food Guide, Delhi, 2009 - Wasabi restaurant under the “Best Japanese” category

March ‘2009 Ranked #2 in Asiamoney’s Travel Poll 2009. Asia’s Best Hotels in Individual Cities



42

Feb ‘2009 Wasabi - Whisky Restaurant of the Year by Whisky Magazine, Icons of Whisky India Awards 2009.


July ‘2008 Wine Spectator - Award of Excellence - House of Ming

The Taj West End, Bangalore

Feb ‘2008 Department of Tourism’s National Awards for 2006-07 for the Best Eco-friendly Hotel

Taj Bengal, Kolkata

July ‘2008 Wine Spectator - Award of Excellence - The Chambers, The Hub and The Chinoiserie

Taj Safaris

May ‘2009 Conde Nast Traveler, USA Hot List 13th Annual 140 Top New Hotels

Jan ‘2009 Conde Nast Traveller, UK - Gold List 2009 - World’s Best Hotels - Asia - Best for Facilities

Jan ‘2009 Luxury Travel Magazine’s Gold List 2006-Australia - Best Overseas Resort and Best Overseas Spa

May ‘2008 The 100 Best hotels - Ultra Travel Daily Telegraph - best African/Indian Ocean hotel category asrunners up

Taj Exotica Resort & Spa, Mauritius

Feb ‘2009 CONDE NAST Traveller - one of the best 28 Beach Resorts in the world.

May ‘2008 Ranked #1 the best Spa in the world on “Luna” ITALY Spa awards

The Pierre, New York, USA

Sept ‘2008 Institutional Investor Magazine Survey “The World’s Best Hotels 2008-09 - Top 100 hotels”

Taj Boston, USA

Jan ‘2009 2009 Mobil Four-Star honors, USA

Nov ‘2008 Commitment to Quality Award - LHW Membership Services

Sept ‘2008 Institutional Investor Magazine Survey “The World’s Best Hotels 2008-09 - Top 100 hotels”


Campton Place, USA


PREMIUM HOTELS

Taj President, Mumbai

July ‘2008 Wine Spectator - Award of Excellence - Thai Pavilion

Usha Kiran Palace, Gwalior

Sept ‘2008 Tatler Spa Guide 2008 ‘Secret Stars’ section of the 101 Best Spas in the world

Taj Ambassador Hotel, New Delhi

July ‘2008 Wine Spectator Award of Excellence - Larry’s China

Jai Mahal Palace, Jaipur

Sept ‘2008 Conde Nast Traveler 2008 World Savers Awards, New York - Honorable Mention for “Health”


43


Taj Exotica, Goa


Sept ‘2008 Best resort in India - “www.travel.ru” through on-line voting of Russian tourists and travelers.

Taj Malabar, Cochin

Sept ‘2008 The 10th Condé Nast Traveller Readers’ Travel Awards, UK - Overseas Leisure Hotels: Asia & theIndian Subcontinent

March ‘2008 Taj Spa - 8th Best Spa in Asia & the Indian Subcontinent in Conde Nast Traveller, UK Reader’s SpaAwards 2008 - The World’s 100 Best Spas

Taj Connemara, Chennai

July ‘2008 Wine Spectator - Award of Excellence - Hip Asia

Taj Residency, Bangalore

July ‘2008 Wine Spectator - AwArd of Excellence – Graze

June ‘2008 Conde Nast Traveler, USA - Graze - Hot List Tables 2008

Nadesar Palace, Varanasi

June ‘2009 Travel + Leisure, USA - It List: 45 Best New Hotels of 2009

May ‘2009 Conde Nast Traveler, USA Hot List 13th Annual 140 Top New Hotels

Taj Tashi, Thimpu, Bhutan

March ‘2009 Asia Spa & Wellness Festival 2009 Gold Awards - “Best Traditional Treatment”

2008 Conde Nast Traveller, UK - The Hot List 2008 - The 65 most stylish, most innovative, most luxurioushotels

Rebak Island Resort, Langkawi

July ‘2008 Elite Traveler’s Top 101 Best Suites in the World

BLUE Woolloomooloo Bay, Sydney

Jan ‘2009 2009 Tablet Hotels Selection Award - Hotels Worldwide Honoured for Excellence in Industry

Jan ‘2009 No.16 in the Luxury Travel Magazine, Australia - Gold List 2009 - Best Australian Hotel

Nov ‘2008 Conde Nast Traveler, USA Reader’s Choice Awards - Best of the Best Top 20 Australia/Pacific HotelsNo.16

July ‘2008 Elite Traveler, USA - runner-up for the best massage therapist in Sydney

Taj Palace, Dubai

Nov ‘2008 Dubai International Holy Quran Award - best hotel hosting the personality of the year: Mr. PeterMansourian, General Manager



44

REPORT ON CORPORATE GOVERNANCEPhilosophy on Corporate Governance

Corporate Governance goes beyond mere financial measurement of the performance of the Company, taking into considerationa basket of parameters such as employee satisfaction, shareholder satisfaction, commitment to quality etc. It rests uponstrong foundations of transparency, disclosure, fairness, monitoring and review.

The Company is committed to Corporate Governance and endeavours to adhere to the highest standards of corporatevalues and ethics and in doing so, has consistently enhanced shareholder’s value.

The Company has complied with the provisions of Clause 49 of the Listing Agreement of the Stock Exchange, which dealswith the compliance of Corporate Governance requirements as detailed below:

The Board of Directors:

1. The Board of Directors comprises Executive, Non-Executive as well as Independent Directors. Non-Executive Directorscomprise more than 50% of the Board of Directors, with the Chairman being a Non-Executive Director. The Directorspossess experience in fields as diverse as hoteliering and architecture, to banking, finance and social service. Theexperience and wisdom of the Directors who are captains of industry, have proved to be of immense assistance to theCompany. The details of Directors seeking re-appointment have been attached along with the Notice of the AnnualGeneral Meeting.

2. “Independent Directors,” i.e. Directors who apart from receiving Directors’ remuneration, do not have any othermaterial pecuniary relationship or transactions with the Company, its promoters, its management or its subsidiaries,which, in the judgement of the Board, may affect the independence of judgement of the Director, comprise over halfof the Board.

3. During the year under review, the Board of Directors of the Company met six times and the period between any twomeetings did not exceed three months. The dates of the Board Meetings held during each quarter are as follows :

No. Date of Meeting For The Quarter

1 April 15, 2008 April to June

2 June 23, 2008 April to June3 July 25, 2008 July to September

4 October 20, 2008 October to December

5 November 7, 2008 October to December6 January 29, 2009 January to March

As required under Annexure I to Clause 49 of the Listing Agreement with the Stock Exchanges, all the necessaryinformation was placed before the Board from time to time.

4. All the relevant information, as recommended by the Securities and Exchange Board of India (SEBI) /Stock Exchanges,is promptly furnished to the Board from time to time in a structured manner.

5. The Non-Whole-time Directors of the Company are paid, in addition to commission, sitting fees @ Rs. 20,000/- permeeting for attending meetings of the Board of Directors, Audit Committee and Remuneration Committee and forShare Transfer & Shareholders’ / Investor Grievance meetings the sitting fees is paid @ Rs. 10,000/- per meeting.

6. None of the Directors of the Board serve as members of more than 10 Committees nor are they Chairmen of more than5 Committees, as per the requirements of the Listing Agreement. “Committees” for this purpose include the AuditCommittee and the Shareholders’ / Investor Grievance Committee under the said Clause 49 of the Listing Agreement.

45


7. A detailed explanation, in the form of a table illustrating the above is given on page No. 50 for ready reference.

8. The Company has adopted a Code of Conduct for its Non-Executive Directors and all Non-Executive Directors haveaffirmed compliance with the said Code. All Senior Management of the Company have affirmed compliance with theTata Code of Conduct. The Code of Conduct is also displayed on the Company’s web site. The Annual Report of theCompany contains a Certificate duly signed by the Managing Director (CEO) in this regard.

9. Other than transactions entered into in the normal course of business, the Company has not entered into anymaterially significant related party transactions during the year, which could have a potential conflict of interestbetween the Company and its Promoters, Directors, Management and / or relatives.

Committees of the Board :

The Committees constituted by the Board of Directors of the Company are as under :

1. Audit Committee:

The Company’s Audit Committee comprises entirely of Independent Directors. Each Member of the Committee hasthe relevant experience in the field of finance, banking and accounting, with a majority of the Members beingChartered Accountants. The Committee has, inter alia, the following terms of reference:

i. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensurethat the financial statements are correct, sufficient and credible.

ii. Recommending the appointment and removal of statutory auditors, fixation of audit fee and also approval forpayment for any other services.

iii. Reviewing with management the annual financial statements before submission to the Board for approval, withparticular reference to:

� Matters required to be included in the Board’s Report in terms of clause 2AA of Section 217 of theCompanies Act, 1956.

� Any changes in accounting policies and practices and reasons thereof.

� Major accounting entries based on the exercise of judgement by the Management.

� Qualifications in the draft audit report.

� Significant adjustments made in the financial statements, arising out of audit findings.

� The Going Concern assumption.

� Compliance with Accounting Standards.

� Compliance with listing and other legal requirements relating to financial statements.

� Any related party transactions i.e. transactions of the Company of material nature, with Promoters or theManagement, their subsidiaries or relatives etc. that may have potential conflict with the interests of theCompany at large.

iv. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.

v. Reviewing, with the management, the statement of uses / application of funds raised through an issue (publicissue, rights issue, preferential issue etc.) the statement of funds utilised for purposes other than those statedin the Offer Document / prospectus / notice and the report submitted by the Monitoring Agency monitoring theutilisation of the proceeds of a public or rights issue and making appropriate recommendations to the Board totake steps in this matter.


46

vi. Reviewing with the management, performance of statutory and internal auditors and the adequacy of internalcontrol systems.

vii. Reviewing the adequacy of internal audit function, including the structure of the internal audit department,staffing and seniority of the official heading the department, reporting structure coverage and frequency ofinternal audit.

viii. Discussion with internal auditors on any significant findings and follow-up thereon.

ix. Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the Board.

x. Discussion with external / statutory auditors before the audit commences, nature and scope of audit, as well ashave post-audit discussion to ascertain any area of concern.

xi. Reviewing the Company’s financial and risk management policies.

xii. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,shareholders (in case of non payment of declared dividends) and creditors.

The details of the composition, names of Members and Chairman as well as the number of meetings held and Directorsattendance thereat during the year are as under:

NO. MEMBERS ATTENDANCE AT AUDIT COMMITTEE MEETINGS HELD ON

23.05.08 23.06.08 25.07.08 20.10.08 29.01.09

1. Mr. S. K. Kandhari – Chairman � � � � �

2. Mr. Deepak Parekh - - - � �

3. Mr. Jagdish Capoor � � � � �

The Committee met five times during the period under review.

Audit Committee meetings are attended by invitation by the Executive Director –Finance, Executive Director – HotelOperations, Group Internal Audit and the Statutory Auditors. The Company Secretary acts as the Secretary to theAudit Committee.

2. Share Transfer & Shareholders’ / Investor Grievance Committee :

The Share Transfer & Shareholders’/Investor Grievance Committee has the required powers to carry out the handlingof shareholders / investor grievances. The brief terms of reference of the Committee include redressing shareholderand investor complaints like transfer of shares, non-receipt of Annual Reports, non-receipt of dividends etc.

The Committee met twice during the period under review.

NO. MEMBERS ATTENDANCE AT SHARE TRANSFER & SHAREHOLDERS’ / INVESTOR GRIEVANCE COMMITTEE MEETINGS HELD ON

09.06.08 08.08.08

1. Mr. N. A. Soonawala - Chairman � �

2. Mr. R. K. Krishna Kumar � -

3. Mr. Raymond N. Bickson � �

47


Share transfers are processed weekly and approved by the Committee. Investor grievances are placed before theCommittee. There were no pending investor complaints which remained unresolved. All share transfers lodged up toMarch 31, 2009 have been processed by the Committee. The status of the complaints received from shareholders from01.04.08 to 31.03.09 is as under:

Complaints received Pending as on 31.03.09

52 -

As per the provisions of Section 205A read with Section 205C of the Companies Act, 1956, the Company is requiredto transfer unpaid dividends, matured deposits, redeemed debentures and interest accrued thereon remaining unclaimedand unpaid for a period of 7 years from the due date to the Investor Education and Protection Fund (IEPF) set up bythe Central Government.

Given below are the proposed dates for transfer of the unclaimed dividend to the IEPF by the Company: -

Financial Year Date of declaration of Dividend Proposed Date of transfer to IEPF*

2001-02 June 13, 2002 August 17, 20092002-03 September 5, 2003 November 9, 2010

2003-04 August 10, 2004 October 15, 2011

2004-05 August 12, 2005 October 16, 20122005-06 August 5, 2006 October 9, 2013

2006-07 August 4, 2007 October 8, 20142007-08 April 15, 2008 June 20, 2015

* Indicative dates, actual dates may vary

It may be noted that no claims will lie against the Company nor the IEPF in respect of the said unclaimed amountstransferred to the Fund.

Amounts Transferred to IEPF

The following amounts have been transferred to IEPF of the Central Government as at March 31, 2009:

Particulars Rs.

Amounts transferred upto March 31, 2008 (a) 2,28,96,506.67Amounts transferred during the year:

- Unpaid / unclaimed dividend with the Company 15,91,528.00- Unpaid / unclaimed matured deposits with the Company 2,30,000.00- Unpaid matured debentures with the Company 1,63,478.00- Interest accrued on the unpaid matured deposits 2,24,604.00- Interest accrued on the unpaid matured debentures -Total (b) 22,09,610.00Amount transferred upto March 31, 2009 (a+b) 2,51,06,116.67*

* Includes transfers for the financial year 2008-09.


48

Compliance Officer

Mr. P. SankerVice President (Legal) & Company SecretaryThe Indian Hotels Company LimitedAddress: Mandlik House, Mandlik Road, Mumbai – 400 001

Phone : 022-6665 3238Fax : 022-2202 7442E-mail : [email protected]

3. Remuneration Committee :

The Listing Agreement with the Stock Exchanges provides that a Company may appoint a Committee for recommendingmanagerial remuneration payable to the Directors. The Company has in place a Remuneration Committee for the saidpurpose. The main function of the said Committee is to determine the remuneration payable to the Whole-timeDirectors.

The Chairman of the Remuneration Committee was present at the last Annual General Meeting of the Company.During the year, the Committee met once as under :

NO. MEMBERS ATTENDANCE AT THE REMUNERATIONCOMMITTEE MEETING HELD ON 23.06.08

1. Mr. Jagdish Capoor - Chairman �

2. Mr. Ratan N. Tata �

3. Mr. N. A. Soonawala �

4. Mr. R. K. Krishna Kumar �

4. Remuneration Policy :

The remuneration of the Whole-time Director(s) is recommended by the Remuneration Committee based on factorssuch as industry benchmarks, the Company’s performance vis-à-vis the industry, performance/ track record of theWhole-time Director(s) etc, which is decided by the Board of Directors. Remuneration comprises a Fixed Componentviz. salary, perquisites and allowances and a variable component viz. commission. The Remuneration Committee alsorecommends the annual increments (which are effective April 1 annually) within the salary scale approved by theMembers as also the Commission payable to the Whole-time Director(s) on determination of profits for the financialyear, within the ceilings on net profits prescribed under Sections 198 and 309 of the Companies Act, 1956.

The commission payable to Non-Executive Directors is decided by the Board and is distributed based on a number offactors, including number of Board and Committee meetings attended, individual contribution thereat etc.

Service Contract and Notice Period of the Managing Director and the Executive Directors

Mr. Raymond N. Bickson’s contract as a Managing Director is for a period of 5 years, commencing from July 19, 2008up to and including July 18, 2013 terminable by 6 months notice on either side.

Mr. Anil P. Goel’s contract as Whole Time Director of the Company is for a period of 5 years, commencing from March17, 2008 up to and including March 16, 2013 terminable by 6 months notice on either side.

Mr. Abhijit Mukerji contract as Whole Time Director of the Company is for a period of 5 years, commencing fromMarch 17, 2008 up to and including March 16, 2013 terminable by 6 months notice on either side.

The Company has no scheme for stock options.

49


Details of ordinary shares of the Company held by the Non-Executive Directors as on March 31, 2009, are as under:

Mr. Ratan N. Tata 59,792

Mr. Deepak Parekh 1,845

Mr. Jagdish Capoor 2,400

Details on General Meetings:

Location, date and time of the General Meetings held in the last 3 years are as under:

Location Date Time

ANNUAL GENERAL MEETINGS

Birla Matushri Sabhagar, August 14, 2008 3.30 p.m.19, Sir Vithaldas Thackersey Marg, August 3, 2007 3.30 p.m. Mumbai - 400 020 August 4, 2006 3.30 p.m.

COURT CONVENED MEETING

Birla Matushri Sabhagar, December 13, 2006 10.30 a.m.19, Sir Vithaldas Thackersey Marg,Mumbai - 400 020

All special resolutions passed in the previous three Annual General Meetings of the Company were unanimously passedby a show of hands by the Members of the Company present and voting at the said meetings.


50

Boa

rd o

f Dir

ecto

rs:

Nam

esC

ateg

ory

Rem

un

erat

ion

pai

dN

o. o

f ou

tsid

eN

o. o

f ou

tsid

eN

o. o

fA

tten

dan

ceD

irec

tors

hip

s C

omm

itte

e P

osit

ion

sB

oard

at t

he

last

Rs.

Hel

dM

eeti

ngs

An

nu

alat

ten

ded

Gen

eral

Sal

ary

&S

itti

ng

Com

mis

sion

Ind

ian

For

eign

as

as

Mee

tin

g h

eld

Per

ks

Fee

s20

07–2

008

Mem

ber

Ch

airm

anon

14.

08.2

008

2008

-200

920

08-2

009

Mr.

R.

N.

Tata

Pro

mot

er-

1,20

,000

74,0

0,00

01

01

0-

-5

Yes

(Cha

irm

an)

Non

-Exe

cuti

ve

Mr.

R.K

. Kri

shna

Kum

arP

rom

oter

-1,

30,0

0072

,50,

000

11

71

15

Yes

(Vic

e C

hair

man

)N

on-E

xecu

tive

Mr.

N. A

. Soo

naw

ala

Pro

mot

er-

1,60

,000

62,5

0,00

05

--

26

Yes

Non

-Exe

cuti

ve

Mr.

S.K

. Kan

dhar

iN

on-E

xecu

tive

-1,

80,0

0077

,00,

000

-1

--

4Y

esIn

depe

nden

t

Mr.

K. B

. Dad

iset

hN

on-E

xecu

tive

-1,

00,0

0016

,00,

000

61

22

5Y

esIn

depe

nden

t

Mr.

Dee

pak

Par

ekh

Non

-Exe

cuti

ve-

1,20

,000

22,5

0,00

01

72

15

4N

oIn

depe

nden

t

Mr.

Jagd

ish

Cap

oor

Non

-Exe

cuti

ve-

2,20

,000

44,0

0,00

05

-3

25

Yes

Inde

pend

ent

Mr.

Sha

poor

Mis

try

Non

-Exe

cuti

ve-

80,0

0025

,50,

000

10

-4

-4

Yes

Inde

pend

ent

**M

r. N

adir

God

rej

Non

-Exe

cuti

ve-

20,0

00-

13

72

11

-In

depe

nden

t

**M

s. A

nu A

gaN

on-E

xecu

tive

-20

,000

-4

--

-1

-In

depe

nden

t

Mr.

Ray

mon

d N

. Bic

kson

Exe

cuti

ve3,

89,1

0,26

5-

15,0

00,0

009

72

36

Yes

Mr.

Ani

l P. G

oel

Exe

cuti

ve98

,64,

486

--

71

34

-6

Yes

Mr.

Abh

ijit

Muk

erji

Exe

cuti

ve59

,11,

101

--

2-

2-

6Y

es# D

r. J.

J. B

habh

aP

rom

oter

--

3,00

,000

--

--

--

Non

-Exe

cuti

ve@

Mr.

Teje

ndra

Kha

nna

Non

-Exe

cuti

ve-

-3,

00,0

00-

--

--

-In

depe

nden

t

**A

ppoi

nted

with

eff

ect f

rom

Nov

embe

r 7, 2

008

@ R

esig

ned

effe

ctiv

e A

pril

2, 2

007

#P

asse

d aw

ay o

n M

ay 3

0, 2

007

NO

TE

:Tra

diti

onal

ly, t

he D

irec

tors

are

pai

d co

mm

issi

on e

ach

year

, aft

er th

e A

nnua

l Acc

ount

s ar

e ap

prov

ed b

y th

e M

embe

rs a

t the

Ann

ual G

ener

alM

eetin

g of

the

Com

pany

. A s

um o

f Rs.

3.6

0 C

rore

s ha

s be

en p

rovi

ded

as c

omm

issi

on to

Non

– E

xecu

tive

Dir

ecto

rs fo

r the

yea

r 200

8-09

. An

amou

ntof

Rs.

3.0

0 cr

ores

is p

rovi

ded

as c

omm

issi

on to

the

Man

agin

g D

irec

tor

and

Exe

cuti

ve D

irec

tors

. Pay

men

t of

com

mis

sion

to th

e D

irec

tors

– b

oth

Man

agin

g, E

xecu

tive

and

Non

- E

xecu

tive

Dir

ecto

rs w

ill b

e m

ade

afte

r th

e ac

coun

ts a

re a

ppro

ved

at th

e A

nnua

l Gen

eral

Mee

ting

.

51


Means of Communication:

Quarterly, half-yearly and annual results of the Company were published in leading English and vernacular newspapers viz.Business Standard, Financial Express, Indian Express and Loksatta. Additionally, the results and other important informationis also periodically updated on the Company’s website viz. www.tajhotels.com, which also contains a separate dedicatedsection “Investor Relations”.

Further, the Company also holds an Analysts’ Meet after the quarterly, half-yearly and Annual Accounts have beenadopted by the Board of Directors, where information is disseminated and analysed. Moreover, the Company also givesimportant Press Releases from time to time.

The Stock Exchanges have vide introduction of Clause 52 in the Listing Agreement, introduced the Corporate Filing andDissemination System (CFDS) which is a portal jointly owned, managed and maintained by the Bombay Stock ExchangeLimited (BSE) and the National Stock Exchange of India Limited (NSE). This system has been introduced in place ofupdation of information on www.sebiedifar.nic.in . It is a single source to view information filed by listed companies.Commencing with the quarter ending October, 2007, all disclosures and communications to the BSE and NSE are filedelectronically through the CFDS portal www.corpfiliing.co.in . Hard copies of the said disclosures and correspondence arealso filed with the BSE and NSE.

Reminders are sent each year to investors for unclaimed dividend or unclaimed interest on debentures.

The Annual Report containing inter alia the Audited Accounts, Consolidated Financial Statements, Directors Report,Auditors Report and other important information is circulated to the investors. Management Discussion and Analysisforms part of the Annual Report. The Annual Reports are also available in the Investor Relations section on the Company’sweb site www.tajhotels.com.

Disclosures :

The Board of Directors receive, from time to time, disclosures relating to financial and commercial transactions from keymanagerial personnel of the Company, where they and / or their relatives have personal interest. There are no materiallysignificant related party transactions, which have potential conflict with the interest of the Company at large.

The details of the Related Party transactions are placed before and reviewed by the Company’s Audit Committee.

The Company has complied with the requirements of the Stock Exchanges / Securities and Exchange Board of India /statutory authorities on all matters relating to capital markets, during the last 3 years.

Pursuant to the provisions of sub – clause V of the revised Clause 49 of the Listing Agreement with the Stock Exchanges,the Managing Director (CEO) and the Executive Director - Finance have issued a certificate to the Board, for the FinancialYear ended March 31, 2009.

Risk Management

The Company has in place a Risk Management Policy, which lays down a vigorous and active process for identification andmitigation of risks. This Policy has been adopted by the Audit Committee as well as the Board of Directors of the Company.The Audit Committee reviews the risk management and mitigation plan from time to time.

Subsidiary Companies

The Company does not have any material unlisted subsidiary and hence is not required to have an Independent Director ofthe Company on the Board of such subsidiary. The Audit Committee reviews the financial statements of the Company’sunlisted subsidiary companies.

The Minutes of the subsidiary companies are periodically placed before and reviewed by the Board of Directors of theCompany.


52

Compliance with non-mandatory requirements

1. The Board : The Non-Executive Chairman has a separate office in his capacity as the Group Chairman at the TataGroup headquarters at Bombay House, 24 Homi Mody Street, Mumbai - 400 001 and hence a separate office is notmaintained. The Company has adopted the Tata Guidelines for composition of the Board of Directors, Committees ofthe Board and Retirement Age of Directors, which take into account the provisions of the Listing Agreement, theCompanies Act, 1956 and other applicable laws.

2. Remuneration Committee: Details already given under the caption ‘Remuneration Committee’ in an earlier part of theReport.

3. Shareholders Rights : In addition to publishing its quarterly results in leading English and a Marathi newspaperhaving wide circulation, the Company publishes its quarterly results on its website www.tajhotels.com. Additionally,the same is also available on www.corpfiling.co.in Hence, a quarterly declaration of financial performance includingsummary of the significant events is presently not being sent to each household of shareholders individually.

4. Audit qualifications : For the financial year 2008-09, there are no audit qualifications to the Company’s financialstatements. The Company continues to adopt best practices to ensure a regime of unqualified financial statements.

5. Mechanism for evaluating Non-Executive Board members : The Board of Directors of the Company presently comprisesten Non-Executive Directors. The Directors appointed on the Board are from diverse fields relevant to the Company’sbusiness and have long-standing experience and expertise in their respective fields. They have considerable experiencein managing large corporates and have been in public life for decades. The enormously rich background of theDirectors is of considerable value to the Company.

Non-Executive Directors add substantial value through the deliberations at the Meetings of the Board and Committeesthereof. To safeguard the interests of the investors, they also play a control role. In important Committees of theBoard like the Audit Committee, the Remuneration Committee etc., they play an important role by contributing to thedeliberations of the Committee Meetings. Besides contributing at the meetings of the Board and Committees, theNon-Executive Directors also have off-line deliberations with the Management of the Company and add valuethrough such deliberations.

In the light of the above, the Chairman under authority from the Board decides on the performance of each Non-Executive Director and they are accordingly evaluated and remunerated.

6. Whistle Blower Policy: The Company has adopted the Whistle Blower policy pursuant to which employees can raisetheir concerns relating to fraud, malpractice or any other activity or event which is against the Company’s interest. Noemployee has been denied access to the Audit Committee in this regard.

As regards the other non-mandatory requirements, the Board has taken cognisance of the same and shall consider adoptingthe same as and when necessary.

53


General Shareholder Information

Annual General Meeting

� Date and Time August 3, 2009 at 3.00 p.m.

� Venue Birla Matushri Sabhagar,19, Sir Vithaldas Thackersey Marg,Mumbai 400 020

Registered Office Mandlik HouseMandlik RoadMumbai 400 001

Telephone No. 91- 22- 6639 5515

Facsimile No. 91- 22- 2202 7442

Website www.tajhotels.com

E-mail [email protected]

Financial Calendar

Financial reporting for:

� Quarter ending 30th June, 2009 July 2009

� Quarter ending 30th September, 2009 October 2009

� Quarter ending 31st December, 2009 January 2010

� Quarter ending 31st March, 2010 May /June 2010

Date of Book Closure July 21, 2009 to August 3, 2009(both days inclusive)

Dividend Payment Date On or after August 4, 2009

Listing

� Ordinary Shares Bombay Stock Exchange Ltd.

National Stock Exchange of India Ltd.

� Global Depository Shares London Stock Exchange

The Company has paid annual listing fees to each of the above Stock Exchanges in respect of the financial year 2009-2010.

Stock Codes

STOCK EXCHANGE STOCK CODE

Bombay Stock Exchange Ltd. 500850

National Stock Exchange of India Ltd. INDHOTEL EQ


54

Market Price Data : High, Low during each month in last financial year

Months BSE High BSE Low No. of Shares traded NSE High NSE Low No. of Shares traded

Apr-08 118.75 107.10 30,62,730 118.80 107.50 1,61,04,707

May-08 122.00 108.00 39,34,843 122.00 108.00 1,47,77,340

Jun-08 112.70 76.20 37,66,376 112.95 76.30 1,97,99,586

Jul-08 93.00 75.00 62,69,457 93.80 75.00 2,07,78,928

Aug-08 90.00 74.50 1,01,73,296 90.00 74.60 2,38,41,293

Sep-08 79.00 65.10 88,33,047 85.00 65.05 2,79,19,500

Oct-08 69.25 43.00 57,28,134 69.60 39.60 1,98,53,093

Nov-08 55.00 40.00 75,73,119 58.00 39.85 1,98,23,322

Dec-08 51.00 36.25 95,99,183 50.35 36.20 2,37,22,252

Jan-09 48.00 37.75 78,92,378 47.90 37.10 1,20,52,619

Feb-09 42.50 35.20 47,94,751 41.30 35.35 85,40,109

Mar-09 41.15 34.00 58,23,387 41.20 34.05 1,84,05,701

55


Performance in comparison to broad-based indices such as BSE Sensex

Two-way Fungibility of Global Depository Receipts (GDRs)

Reserve Bank of India, vide its circular dated February 13, 2002, had brought into force the Operative Guidelines for thetwo–way fungibility under the “Issue of Foreign Currency Convertible Bonds and Ordinary shares (through DepositoryReceipt mechanism) Scheme 1993. Consequent thereto, the Company has executed documents with Citibank N.A., NewYork, Depository for GDR holders, supplemental to the Depository Agreements executed by the Company at the time ofissue of GDRs in 1995 and 1997, whereby the Company offers investors the facility for conversion of Ordinary Shares intoGDRs, within the limits prescribed for two-way fungibility.

Registrar and Share Transfer Agent The Company has obtained Category I Registrar to an Issue & Share TransferAgent Certificate from SEBI

SEBI Registration No. Category I - INR000003746

Share Transfer System

All shares have been transferred and returned within 21 days from the date of lodgement, provided the necessary documentswere in order.


56

IHCL Distribution of Shareholding as on March 31, 2009

Category of Shareholders No. of Shares held % to total capital

Promoters 21,36,13,999 29.53

Directors & Their Relatives 4,42,682 0.06

Foreign Institutional Investors 12,42,28,242 17.17

Foreign Banks 7,108 0.00

Resident Individuals & HUF 15,55,56,328 21.50

Non-Resident Indians 53,24,350 0.74

Global Depository Receipts 24,16,790 0.33

Financial Institutions / Banks 11,11,78,317 15.37

Insurance Companies 3,72,37,180 5.15

Mutual Funds / UTI 3,12,39,124 4.32

Clearing Members 5,02,862 0.07

Corporate Bodies 4,15,43,064 5.74

Trusts 1,12,342 0.02

Central / State Governments 2,900 0.00

Total 72,34,05,288 100.00

57


Distribution Schedule of The Indian Hotels Company Limited as on March 31, 2009

No. of Shares held Total Total Total % toMembers Shares Paid up Capital

Upto 100 66,477 34,33,297 0.47

101 to 1000 72,214 2,71,73,217 3.76

1001 to 2500 16,017 2,59,55,209 3.59

2501 to 5000 6,324 2,29,38,830 3.17

5001 to 10000 4,001 2,84,09,936 3.93

10001 to 20000 1,774 2,41,39,535 3.34

20001 to 30000 427 1,04,12,232 1.44

30001 to 40000 172 60,44,724 0.84

40001 to 50000 95 42,22,894 0.58

50001 to 100000 173 1,20,22,313 1.66

100001 & above 245 55,86,53,101 77.22

Total 1,67,919 72,34,05,288 100.00

Secretarial Audit

In keeping with the requirements of the SEBI and the Stock Exchanges, a secretarial audit by a practicing CompanySecretary is carried out to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital.The said audit confirms that the total issued / paid – up capital tallies with the total number of shares in physical form andthe total number of dematerialised shares held with NSDL and CDSL.

A certificate from the Statutory Auditors of the Company on Corporate Governance is attached as an annexure to theReport.

Report on Corporate Governance

The Company regularly submits to the Stock Exchanges, within the prescribed period, quarterly reports on CorporateGovernance. A certificate from the Statutory Auditors of the Company on Corporate Governance is attached as an annexureto the Report.

Dematerialisation of Shares & Liquidity

� As of the end of March 31, 2009, shares comprising approximately 96.35% of the Company’s Equity Share Capitalhave been dematerialised.

� Trading in the Company’s shares in a dematerialised form has been made compulsory with effect from April 5, 1999.


58

ISIN No. INE053A01029

Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity

6,02,76,898 Detachable Warrants were issued along with 6% Secured Redeemable Non-Convertible Debentures. The Warrantholder has the right to purchase 1 Ordinary Equity share of face value of Re.1/- each of the Company at a price ofRs. 150/- per share against 1 Warrant held during the warrant exercise period i.e. starting from September 1, toSeptember 30, 2009 only.

The paid-up equity capital of the Company would be Rs.78.37 crores, if all the warrants are exercised.

Sub-Division of Shares

The Ordinary Equity Shares of the Company were sub-divided from Rs.10/- each to Re.1/-each w.e.f. 3rd day of November,2006 being the “Record Date” fixed for the purpose.

The Members whose name/s was appearing on the Register of Members on the Record Date, was entitled to get 10 fullypaid up ordinary shares of the face value of Re. 1/- each for every 1 ordinary share of face value of Rs.10/- held by them.

The Company called back the existing share certificates having paid-up value of Rs.10/- each and issued the new sharecertificate of face value of Re.1/- each. The members who have still not exchanged their share certificates are requested tokindly get in touch with the Company.

The Members are requested not to deal with share certificates of face value of Rs.10/- each in any manner whatsoever. If anymember deals, sell, transfers, pledge such share certificate of a paid value of Rs.10/- each shall do so at his own cost andconsequence and the Company shall not be held responsible or liable for such acts of the Members.

59


Registrars to the Company’sFixed Deposit Scheme Sharepro Services (I) Pvt. Ltd.

Samhita Warehousing Complex13 AB, Gala No.52Near Sakinaka Telephone ExchangeOff. Kurla Andheri RoadSakinaka, Mumbai 400072.

Tel. No.91-22-67720400Fax No.91-22-28508927Email : [email protected]

Investor Correspondence

For any queries, investors are requested to get in touch with the Company’s share department at Mandlik House, MandlikRoad, Mumbai 400 001. A dedicated e-mail id [email protected] has been set up for investor complaints.

Electronic Clearing Service (ECS)

The Company is availing of the ECS facility to distribute dividend to those members who have opted for it.

DECLARATION BY THE MANAGING DIRECTOR UNDER CLAUSE 49 OF THE LISTING AGREEMENT REGARDINGADHERENCE TO THE CODE OF CONDUCT

In accordance with sub-clause I (D) of Clause 49 of the Listing Agreement with the Stock Exchanges, I hereby confirm that,all the Directors and the Senior Management personnel of the Company have affirmed compliance with their respectiveCodes of Conduct, as applicable to them, for the Financial Year ended March 31, 2009.

For The Indian Hotels Company Limited

Raymond N. BicksonManaging Director


60

HOTELS LOCATIONS:The various hotels/units of the Taj Group are tabled as under:

TAJ LUXURY HOTELS TAJ PREMIUM HOTELS GATEWAY HOTELSG I N G E RH O T E L S

I n d i aThe Taj Mahal Palace & Towers, Mumbai

Taj Lands End, Mumbai

The Taj Mahal Hotel, New DelhiTaj Palace Hotel, New Delhi

Taj Bengal, Kolkata

The Taj West End, BangaloreTaj Lake Palace Hotel, Udaipur

Taj Wellington Mews, Mumbai

Taj Coromandel, ChennaiTaj Krishna, Hyderabad

Rambagh Palace, Jaipur

Umaid Bhawan Palace, JodhpurMahua Kothi, Bandhavgarh

Baghvan, Pench

Pasangarh, PannaBanjar Tola, Kanha

OverseasThe Pierre, New YorkTaj Boston, Boston

Campton Place, San Francisco

Taj Exotica Resort & Spa, MaldivesTaj Palace Hotel, Dubai

Crown Plaza / St. James - London

51 Buckingham Gate, London

I n d i aTaj Connemara, Chennai

Taj Exotica, Goa

Fort Aguada Beach Resort, GoaTaj Holiday Village, Goa

Usha Kiran Palace, Gwalior

Taj Hari Mahal Palace, JodhpurJai Mahal Palace, Jaipur

Vivanta by Taj, Whitefield Bengaluru

Taj President, MumbaiTaj Residency, Bangalore

Ambassador Hotel, New Delhi

Taj Residency, AurangabadTaj Banjara, Hyderabad

Taj Deccan, Hyderabad

Taj Chandigarh, ChandigarhTaj Residency, Lucknow

Blue Diamond, Pune

Fisherman’s Cove, ChennaiTaj Malabar, Cochin

Taj Garden Retreat, Kumarakom

Taj Green Cove Resort, KovalamSawai Madhopur Lodge, Sawai Madhopur

Ramgarh Lodge, Jaipur

Taj Residency, TrivandrumTaj Mount Road, Chennai

Vivanta by Taj, Panaji, Goa

OverseasTaj Samudra, Colombo

Taj Exotica, Bentota

Vivanta by Taj, Coral Reef, MaldivesRebak Island Resort, Langkawi, Malaysia

Taj Tashi, Thimphu, Bhutan

Taj Pamodzi, LusakaAirport Garden Hotel, Colombo

Blue, Sydney, Australia

BangaloreHaridwarBhubaneshwarMysoreTrivandrumPuneDurgapurNashikAgartalaPondicherryBarodaPant NagarDelhiGoaLudhianaAhmedabadMangaloreGuwahati

AIR CATERING

MumbaiNew DelhiKolkataChennaiGoaAmritsarBangalore

TGH - Residency Road, BangaloreTGH - Beach Road, Calicut

Hotel Chandela, Khajuraho

TGH - Savoy, OotyTGH - Rawalkot, Jaisalmer

TGH - Kuteeram, Bangalore

The Gir Lodge, Sasan GirTGH - City Inn, Baramati

TGH - Beach Road, Vizag

TGH - Pasumalai Hills, MaduraiTGH - Sylks Road, Coonoor

TGH - Port Road, Manjarun, Mangalore

TGH - Fatehabad Road, AgraTGH - Ambad, Nasik

TGH - Varanasi

TGH - ErnakulamTGH - Varkala

TGH - Chikmagalur

TGH - Athwa Lines, SuratTGH - M. G. Road, Vijaywada

TGH - Ummed, Ahmedabad

TGH - Akota Gardens, VadodaraTGH - SMS, Jaipur

Nadesar Palace, Varanasi

61


AUDITORS’ CERTIFICATE

TO THE MEMBER OFTHE INDIAN HOTEL COMPANY LIMITED

We have examined the compliance of conditions of Corporate Governance by The Indian Hotel Company Limited(“the Company”) for the year ended 31st March, 2009 as stipulated in Clause 49 of the Listing Agreements of the Companywith the stock exchanges.

The compliance of conditons of Corporate Governance is the responsibility of the Management. Our examination waslimited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance ofthe conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements ofthe Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationsmade by the Management, we certify that the Company has complied with the condition of Corporate Governance asstipulated in the abovementioned Lisiting Agreements.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the Management has conducted the affairs of the Company.

For DELOITTE HASKINS & SELLS For N. M. RAIJI & CO.Chartered Accountants Chartered Accountants

Nalin M. Shah Vinay D. BalsePartner PartnerMembership No. 15860 Membership No. 39434

Mumbai, 26th June, 2009


62

Community Initiatives of the Taj Group of Hotels – 2008-09Your company has been steadfast in its belief that it is in existence not only to make profits but also play a role asresponsible corporate citizens, who add value to the society and the nation. With the growing focus on CorporateSustainability and Triple Bottom Line approach in the contemporary business environment and as a brand of internationalvisibility and repute, it has become increasingly imperative that your company updates its approach and processes towardsthe same.

It has been our conscious endeavor to align our existing corporate sustainability activities to the global benchmarks. Thishas required us to upgrade our structure including aligning it with the company values, establishing robust processes andeffectively cascading them down to the various properties. Your company is currently in the process of publishing acomprehensive GRI (Communication on Progress to UN Global Compact) report that reflects the company vision, approachand performance on three simultaneous measures – economic, social and environmental.

Further, a Director level position for Corporate Sustainability has been created to integrate both social and environmentalfunctions and drive the development of these initiatives.

Social

The Taj continues to believe in working symbiotically with the larger community and our goals is to empower our identifiedcommunities to be independent, earning members of society. By adapting some of our core strengths in hoteliering, we workalongside the state systems towards evolving realistic and sustainable solutions for national challenges like malnutrition,unemployment & gaps in vocational training and education. Our association with the rich heritage of India enables us toprovide a platform to showcase indigenous art and culture to the world, while encouraging the craftsmen who create it.

Last financial year, the total expenditure on social initiatives by the Taj Group of Hotels was to the tune of 25 Lacs, with thefocus being on long-term, sustainable projects. This year, to back our growing commitment, an amount of Rs 35 Lacs hasbeen allocated for both social and environmental projects.

The growing significance of Corporate Sustainability in the current organization processes is apparent through theimprovement in the data capturing systems and quality of the data collected.

Data for 2008-09

Community Development 2008-09

Volunteering hours 73710

Volunteers 7415

Number of people impacted 57688

In the year 2008-09, the total number of volunteering hours spent on various activities increased by 94% to 73,710, while thenumber of employees who volunteer for the various initiatives has increased by 73% to 7415. There has been a reductionin the number of people impacted through these projects from 58,045 last year to 57,688 in the course of this financial yearsince the nature of projects has been changing from charities and one-time events to more long-term initiatives thateconomically empowers its beneficiaries in the long run.

Our growing thrust on community initiatives has helped streamline our broad social theme of ‘building livelihoods’ toinclude projects that use the Taj’s core competency as leaders in hospitality:

1. Increasing employability and self – employability by empowering candidates from marginalized socio-economicbackgrounds through vocational skill training, personality development, grooming and mentoring

2. Reduction of malnutrition

3. Promotion of indigenous artisans and craftsmen

4. Training & recruitment of Persons with Disabilities

63


A brief summary of our projects is presented below

Skill trainings for less privileged women & youth

Taj-Pratham Skill Training Center

This project aims to train school dropouts and other less-privileged aspirants from rural areas in hotel operations like FoodProduction, House-keeping, Food & Beverage Services. More than 300 youth of Khaultabad region near Aurangabad areto be trained in a year, starting from June 2009.

ITI Upgradation Program

Your company has been tying up with rural ITIs in order to reach out to youth from less-privileged socio-economicbackgrounds by facilitating market-relevant skill-trainings and on-the-job exposure in identified rural areas. Two suchpartnerships are in progress and two more shall be operational by the end of this calendar year.

Skill trainings for grooming youth for Service Industry

Taj President Mumbai, in partnership with TRENT & Kherwadi Social Welfare Association (KSWA) conducted youthdevelopment programmes at Geeta Nagar, a slum in South Mumbai. More than 70 young men and women were trained inbeautician courses, hospitality and retail industry skill sets through this partnership. Interested candidates also weresupported with accessing employment/self employment opportunities.

Empowerment of Women

Rehabilitation of commercial sex workers

Your company’s hotels in Goa support 40 women of Swift Wash, an income generation initiative by the NGO Arz, whichrehabilitates women from human trafficking. The hotel volunteers support to this NGO through skill trainings in laundry,team-building & business development inputs. These women today are capable of managing the laundry load of two Tajhotels in Goa and many other commercial establishments.

Nutrition Support and Training

IHCL has entered into a knowledge partnership with the government supplementary nutrition scheme through the supportof Bhavishya Alliance which promotes public-private partnerships for the cause of child-malnutrition. Taj hotels providesinputs and trainings for government functionaries and relevant target groups to enhance the quality and taste of food beingserved through supplementary nutrition program to children between 0-6 years, pregnant and lactating women through apilot venture in the Nandurbar district of rural Maharashtra. A training of trainers approach was followed to reach out tomore than 12,000 grassroot stakeholders who have been trained in diverse low cost cooking, personal and cooking hygiene.

Promoting Art, Culture and Artisans

Your company supports and revives dying arts, unique to India’s heritage. In particular, with an aim to revive the handloomindustry from extinction, your company uses hand-woven saris from the master weavers of Varanasi for uniforms across tenTaj Luxury properties.

Disability Training and Recruitment

People with disability are celebrated in your company where people with hearing and learning disabilities are trained inhospitality skills and employed across our properties in collaboration with the DEEDS Catering College for the HearingImpaired and the SPJ Sadhana School for the Mentally Challenged.

Environmental Initiatives

The commitment of your company to the environment has been to reduce the impact of our daily operations on it. The broadareas of focus have been identified as:


64

1. Improving Energy Efficiencies

2. Water (Fresh & Waste) management

3. Solid Waste Management

To reiterate our commitment to preservation of the environment, to boost sustainable tourism and integrate environmentmanagement in all business areas, your company launched the EARTH (Environment Awareness & Renewal at Taj Hotels)vision in August last year. Further your company decided to go in for the prestigious Green Globe certification - the onlyworldwide environmental certification program for travel and tourism industry. In the first year itself 55 of our hotels haveachieved Green Globe certification. We expect all our hotels to achieve certification by the end of this year.

Consumptions have been well under control despite increase in number of rooms by opening of new hotels

Emissions & discharge of pollutants have always been maintained well below stipulated norms.

Usage of Energy / Water 2008-09

Quantity of energy generated by unconventional methods (KwH) 43600651

Quantity of water recycled (KL) 1148999.2

Air Emission Tracking (ìgs/m³) 2008-09

NoX (permitted level upto 120 micro grams / m3) 11.5

SoX (permitted standard upto 120 micro grams / m3) 9.7

Particulate Matter (SPM) 221.7

Pollutants discharge in Waste Water (g/lt) 2008-09

CoD (permitted standard <250) 41

BoD (permitted standard <30) 20

TSS (permitted standard <100) 30

Oil & Grease (permitted standard <10) 3

Waste Disposal (Tons / Day) 2008-09

Waste for composting 24.91

Waste to Municipality 27.8

In our effort to reduce dependence on fossil fuels, the Taj has constantly looked at renewable sources of energy. Over thelast year, the Taj has seen many initiatives towards the saving of precious natural resources like the installation of solarpanels, heat exchangers and heat pumps. This has helped us increase the quantity of energy generated by unconventionalmethods by 58% over the last year from 43600651 KwH. Your company has remained well under the stipulated norms of upto 120 micro grams / m3. We have also taken active measures to ensure that the pollutants discharged in waste water remainwithin the norms as well.

65



66

AUDITORS’ REPORTTO THE MEMBERS OF

THE INDIAN HOTELS COMPANY LIMITED

1. We have audited the attached Balance Sheet of THE INDIAN HOTELS COMPANY LIMITED (“the Company”) as atMarch 31, 2009, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on thatdate, both annexed thereto. These financial statements are the responsibility of the Company’s Management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accounting principles used and thesignificant estimates made by the Management, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms ofSection 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appearsfrom our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are inagreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act,1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accountsgive the information required by the Companies Act, 1956 in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on 31st March, 2009 and taken on record bythe Board of Directors, none of the Directors is disqualified as on 31st March, 2009 from being appointed as a directorin terms of Section 274(1)(g) of the Companies Act, 1956.


Nalin M. Shah Vinay D. BalsePartner Partner(Membership No.15860) (Membership No. 39434)MUMBAI, 12th June, 2009

67


ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’s business/activities and results for the year, clauses (viii), (x), (xiii) and(xiv) of paragraph 4 of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situationof the fixed assets. The fixed asset records of the Taj Mahal Palace & Towers, Mumbai have not been updated,pursuant to the terrorist attack in November 2008, as the unit is in the process of restoration of its property,which is covered by a reinstatement policy. The records, we are informed, will be updated only after theinsurance claim for reinstatement has been settled.

(b) Physical verification of fixed assets has been carried out by the Management at most of the units in accordancewith a programme of verification which, in our opinion, provides for physical verification of all the fixed assetsat reasonable intervals. We have been informed that the reconciliation of assets verified with the fixed assetsregister is still in progress at some of the units. Discrepancies, if any, arising out of verification and reconciliationare yet to be determined.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixedassets of the Company and such disposal has, in our opinion, not affected the going concern status of theCompany.

(iii) In respect of inventory of stores, operating supplies and food and beverages:

(a) As explained to us, inventories were physically verified during the year by the Management at reasonableintervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physicalverification of inventories followed by the Management were reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintainedproper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in theRegister maintained under Section 301 of the Companies Act, 1956, according to the information and explanationsgiven to us:

(a) The Company has granted loans aggregating Rs. 500 crores to seven parties during the year. At the year-end,the outstanding balances of such loans granted aggregated Rs. 650.77 crores (number of parties – six) and themaximum amount involved during the year was Rs. 1,150.92 crores (number of parties – eleven).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicialto the interests of the Company.

(c) The receipts of principal amounts and interest have been regular/as per stipulations, except in the case of a jointventure company, wherein interest of Rs. 4.42 crores remains overdue.

(d) In respect of overdue amounts of over Rs.1 lakh remaining outstanding as at the year-end, as explained to us,the Management has taken reasonable steps for recovery of the overdue interest.

(v) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered inthe Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanationsgiven to us:

(a) The Company has taken loans aggregating Rs. 1.85 crores from one party during the year. At the year-end, theoutstanding balances of such loans taken aggregated Rs. 3.76 crores (number of parties – two) and the maximumamount involved during the year was Rs. 46.56 crores (number of parties – five).


68

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicialto the interests of the Company.

(c) The payments of principal amounts and interest in respect of such loans are regular/as per stipulations.

(vi) In our opinion and according to the information and explanations given to us, there is an adequate internal controlsystem commensurate with the size of the Company and the nature of its business for the purchase of inventory andfixed assets and for the sale of goods and services. In the course of our audit, we have not observed any majorweakness in such internal control system.

(vii) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of theCompanies Act 1956, to the best of our knowledge and belief and according to the information and explanations givento us:

(a) The particulars of contracts or arrangements referred to Section 301, that needed to be entered in the Registermaintained under the said Section, have been so entered.

(b) Where each of such transactions (excluding loans reported under paragraphs (iv) and (v) above) is in excess ofRs. 5 lakhs in respect of any party, the transactions have been made at prices which are, prima facie, reasonable,having regard to the prevailing market prices at the relevant time.

(viii) In our opinion and according to the information and explanations given to us, the Company has complied with theprovisions of Sections 58A and 58AA, or any other relevant provisions of the Companies Act, 1956 and the Companies(Acceptance of Deposits) Rules, 1975, with regard to deposits accepted from the public. According to informationand explanations given to us, no order has been passed by the Company Law Board or the National Company LawTribunal or the Reserve Bank of India or any Court or any other Tribunal.

(ix) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the natureof its business.

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, InvestorEducation and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,Customs Duty, Excise Duty, Cess and any other material statutory dues with the appropriate authorities duringthe year.

(b) There were no undisputed amounts outstanding as at 31st March, 2009 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Sales Tax and Service Tax which have not been deposited as on 31st March, 2009, on accountof disputes, are given below:

Name of Nature Amount Period to which Forum whereStatute of Dues (Rs.in the amount relates dispute is pending

crores)

Central Sales Sales Tax 0.11 2000-01/2002-03 AdditionalTax Act, 1956 Commissioner ofand Sales Tax Act Sales Taxof various states

0.38 1997-98/1999-2001 Assessing Officer ofSales Tax

1.23 2001-02 Deputy Commissionerof Sales Tax

0.11 1992-95 Tribunal

0.27 1995-96 Appellate Board

69


Name of Nature Amount Period to which Forum whereStatute of Dues (Rs.in the amount relates dispute is pending

crores)

0.23 1996-98 Appellate &Revision Board

2.53 2001-06 Deputy Commissionerof Commercial Taxes

0.06 2003-05 Joint Commissioner ofTrade Tax, Noida

Finance Act, 1994 Service Tax 0.05 2002-05 Deputy Commissionerof Central Excise

1.10 2002-05 Commissioner ofService Tax

Total 6.07

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in therepayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loansand advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of theguarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie,prejudicial to the interests of the Company.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion,term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes forwhich the loans were obtained.

(xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of theCompany, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xvi) According to the information and explanations given to us, the Company has not made any preferential allotment ofshares to parties and companies/firms covered in the Register maintained under Section 301 of the Companies Act,1956.

(xvii) According to the information and explanations given to us and the records examined by us, securities have beencreated in respect of the debentures issued.

(xviii) We have verified the end use of money raised by the Rights Issue of simultaneous but unlinked issue of EquityShares and Non Convertible Debentures as disclosed in Note 3 of Schedule 14 “ Notes to the Balance Sheet and theProfit and Loss Account”.

(xix) To the best of our knowledge and according to the information and explanations given to us, no fraud by theCompany and no material fraud on the Company was noticed or reported during the year.


Nalin M. Shah Vinay D. BalsePartner Partner(Membership No.15860) (Membership No. 39434)

MUMBAI, 12th June, 2009


70

Balance Sheet as at March 31, 2009March 31, 2008

Schedule Rupees Rupees Rupeescrores crores crores

SOURCES OF FUNDSShareholders’ Funds

Share Capital 1 72.34 60.29Share Application Money - 19.97Reserves and Surplus 2 2,975.29 1,956.29Total 3,047.63 2,036.55

Loan FundsSecured Loans 3 1,598.02 755.58Unsecured Loans 4 168.45 378.60Total 1,766.47 1,134.18

Long Term Trade Deposits 23.53 23.63Deferred Tax Liability (Refer Note 5 (b), Page 94) 146.94 137.86

4,984.57 3,332.22APPLICATION OF FUNDSFixed Assets 5

Gross Block 2,362.23 2,069.68Less : Depreciation 776.83 700.56Net Block 1,585.40 1,369.12Capital work-in-progress 215.10 267.93Total 1,800.50 1,637.05

Investments 6 2,026.88 977.58Long Term Deposits 7 677.78 585.55Foreign Currency Monetary Item Translation 11.63 -Difference Account(Refer Note 18, Page 99)Current Assets, Loans and Advances 8

Inventories 38.91 32.85Sundry Debtors 101.70 138.41Cash & Bank Balances 23.44 74.43Loans & Advances 776.76 330.01

940.81 575.70Less: Current Liabilities and Provisions 9

Liabilities 320.36 401.14Provisions 153.40 43.97

473.76 445.11Net Current Assets 467.05 130.59Miscellaneous Expenditure (to the extent not adjusted or written off) 10 0.73 1.45

4,984.57 3,332.22The accompanying notes form an integral part of the Balance Sheet 13 / 14

As per our report attached. For and on behalf of the Board

For DELOITTE HASKINS & SELLS For N. M. RAIJI & CO. R. N. TATA ChairmanChartered Accountants Chartered Accountants R. K. KRISHNA KUMAR Vice - Chairman

RAYMOND N. BICKSON Managing DirectorANIL P. GOEL Executive Director - FinanceABHIJIT MUKERJI Executive Director - Hotel

OperationsNalin M. Shah Vinay D. Balse N. A. SOONAWALAPartner Partner S. K. KANDHARI

JAGDISH CAPOOR DirectorsSHAPOOR MISTRYARNAVAZ AGANADIR GODREJ

Mumbai, June 12, 2009 SANKER PARAMESWARAN Vice President - Legal& Company Secretary

}

71


Profit and Loss Account for the year ended March 31, 2009Previous Year


INCOMERooms, Restaurants, Banquets and Other Income 11 1,706.52 1,823.16

EXPENDITUREOperating and General Expenses 12 1,163.52 1,074.35Depreciation 94.46 85.48Interest (net) (Refer Note 15, Page 98) 90.44 94.28Total 1,348.42 1,254.11Less : Expenditure during construction period transferred 10.41 11.42to Fixed Assets

1,338.01 1,242.69PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS 368.51 580.47EXCEPTIONAL ITEMS (Refer Note 2(b), Page 92) 6.21 -PROFIT BEFORE TAX 362.30 580.47

Less : Provision for Tax (Refer Note 5, Page 93) 124.58 198.91Less : Short Provision of Tax of earlier years (Net) 3.69 4.10

PROFIT AFTER TAX 234.03 377.46Add : Balance brought forward from Previous Year 536.78 331.33Amount available for Appropriation 770.81 708.79Appropriation:

Interim Dividend - 114.54Tax on Interim Dividend - 19.47Proposed Dividend 86.81 -Tax on Dividend 14.75 -Transfer to Debenture Redemption Reserve 100.00 -Transfer to General Reserve 30.00 38.00Balance carried forward 539.25 536.78

770.81 708.79Earnings Per Share - (In Rupees) (Refer Note 36, Page 116)

Basic and Diluted 3.28 5.77Face Value per equity share - (In Rupees) 1.00 1.00The accompanying notes form an integral part of the 13 / 14Profit and Loss Account







}


72

Cash Flow Statement for the year ended March 31, 2009Previous Year

Rupees Rupees Rupees Rupeescrores crores crores crores

Cash Flow From Operating ActivitiesNet Profit Before Tax 362.30 580.47Adjustments For :Depreciation 94.46 85.48Amortisation of VRS Expenditure 0.13 0.51Provision for Doubtful Debts and Advances 2.98 (1.26)Loss / (Profit) on sale of assets (4.09) 5.98Dividend Income (69.50) (19.98)Interest (Net) 90.44 94.28Unrealised Exchange Loss / (Gain) 10.03 (14.23)Provision for Diminution in value of Investments written back - (0.25)Provision for Loyalty Programmes (net of Redemptions) 1.61 2.14Provision for Employee Benefits 6.45 0.93

132.51 153.60Cash Operating Profit before working capital changes 494.81 734.07Adjustments For :Trade and Other Receivables (70.55) 29.04Inventories (6.06) (3.83)Trade Payables 31.25 (29.24)

(45.36) (4.03)Cash Generated from Operating Activities 449.45 730.04Direct Taxes Paid (155.14) (207.08)

Net Cash From Operating Activities 294.31 522.96Cash Flow From Investing Activities

Purchase of Fixed Assets (262.44) (259.00)Sale of Fixed Assets 8.67 2.06Purchase of Investments (including Advance paid) (353.36) (112.72)Interest Received 31.77 7.02Dividend Received 69.50 19.98Long Term Deposits Placed with Subsidiaries (482.72) (179.02)Long Term Deposits Placed with Others (7.25) (27.74)Long Term Deposits Refunded by Other Companies 10.17 0.25Loans repaid by Subsidiaries 19.46 9.17Short Term (Loans to) / Loans repaid by Other Companies (net) (139.54) (1.57)

Net Cash Used In Investing Activities (1,105.74) (541.57)Cash Flow From Financing Activities

Share Application money collected - 19.97Debenture Application money collected - 3.88Proceeds from Issue of Equity Shares 823.90 -Debenture issue costs (9.44) (0.69)Interest Paid (80.69) (101.08)Repayment of Long Term Loans and Debentures (142.52) (352.75)Proceeds of Long Term Loans and Debentures 922.99 422.73Short Term Loans Raised / (Repaid) (net) (197.71) 136.53Long Term Trade Deposits Raised/(Repaid) (net) (0.10) 8.34Dividend Paid (Including tax on dividend) (133.84) (112.64)

Net Cash Used In Financing Activities 1,182.59 24.29Net Increase / (Decrease) In Cash and Cash Equivalents 371.16 5.68Cash and Cash Equivalents - Opening - 1st April - (Refer Note 11 (b), Page 96) 74.43 68.75Cash and Cash Equivalents - Closing - 31st March - (Refer Note 11 (b), Page 96) 445.59 74.43







}

73


Schedules forming part of the Balance Sheet

Schedule 1 : Share CapitalMarch 31, 2008

Rupees Rupeescrores crores

AUTHORISED SHARE CAPITAL

Ordinary Shares

100,00,00,000 Ordinary Shares of Re. 1/- each 100.00 100.00

Preference Shares

1,00,00,000 Cumulative Redeemable Preference Shares of Rs. 100/- each 100.00 100.00

200.00 200.00

ISSUED SHARE CAPITAL

72,34,21,792 (Previous Year - 60,28,51,493) Ordinary Shares of Re. 1 /- each 72.34 60.29

72.34 60.29

SUBSCRIBED AND PAID UP

72,34,05,288 (Previous Year - 60,28,51,493) Ordinary Shares of Re. 1 /- each,Fully Paid ( See Notes below ) 72.34 60.29

72.34 60.29

Notes :

1. Of the total paid up capital :

(i) 4,90,04,000 Ordinary Shares, of the face value of Re. 1/- each, were issued as fully paid Bonus Shares bycapitalisation of Reserves.

(ii) 24,88,77,170 Ordinary Shares, of the face value of Re. 1/- each, were issued as fully paid Bonus Shares bycapitalisation of Securities Premium Account.

(iii) 13,54,84,873 Ordinary Shares, of the face value of Re. 1/- each, were issued as fully paid shares, pursuant toexercise of option for conversion by holders of Foreign Currency Convertible Bonds (FCCBs).

(iv) 1,62,19,670 Ordinary Shares, of the face value of Re. 1/- each, were allotted as fully paid shares, pursuant toamalgamation of Gateway Hotels & Getaway Resorts Limited and Indian Resort Hotels Limited with the Company.

(v) 12,05,53,795 Ordinary Shares, of the face value of Re 1/- each, were allotted on May 23, 2008 as fully paid shares,pursuant to Rights Issue of Equity Shares by the Company (Refer Note 3, Page 92).

(vi) 16,504 Ordinary Shares have been issued but not subscribed to as at the end of the year and have been kept inabeyance pending resolution of legal dispute.


76


Schedule 4 : Unsecured LoansMarch 31, 2008


FIXED DEPOSITS

From Shareholders: (Refer Note 1 below ) 22.14 1.91

[Repayable within one year - Rs. 0.03 crore (Previous Year - Rs. 1.05 crores)]

From Others : 5.04 1.17


SHORT TERM LOANS FROM BANKS - 89.18

INTER - CORPORATE DEPOSITS (Refer Note 2 below ) 0.41 57.05


COMMERCIAL PAPER (Refer Note 3 below ) - 50.00

FOREIGN CURRENCY TERM LOAN FROM BANKS 140.86 179.29

[Repayable within one year - Nil (Previous Year - Rs. 59.23 crores)]

TOTAL 168.45 378.60

Note:

1) Includes Fixed deposits from a Director - Rs. 0.60 crore (Previous Year - Rs. 1.00 crore).

2) Includes deposits from a subsidiary - Rs. 0.41 crore (Previous Year - Rs. 14.05 crores).

3) Maximum amount outstanding during the year - Rs. 150.00 crores (Previous Year - Rs. 170.00 crores).


74


Schedule 2 : Reserves and SurplusMarch 31, 2008

Rupees Rupees Rupeescrores crores crores

Capital ReserveBalance as per Last Account 43.91 43.91

Capital Redemption ReserveBalance as per Last Account 1.12 1.12

Securities Premium AccountBalance as per Last Account 851.37 852.06Add: On allotment of Rights Issue of Equity Shares

(Refer Note 3, Page 92) 831.82 -Less: Share / Debenture Issue Expenses written off

(Refer Notes 3 and 4 , Page 92 and 93) 7.91 0.69Total 1,675.28 851.37

General ReserveBalance as per Last Account 404.63 366.63Add: Transferred from Profit and Loss Account 30.00 38.00Less: Transferred to Foreign Currency Monetary ItemTranslation Difference Account (Refer Note 18 , Page 99 ) 3.82 -Total 430.81 404.63

Investment ReserveBalance as per Last Account 5.00 5.00

Investment Allowance Utilised ReserveBalance as per Last Account 4.03 4.03

Export Profits ReserveBalance as per Last Account 0.41 0.41

Debenture Redemption ReserveBalance as per Last Account 88.67 88.67Add : Transferred from Profit and Loss Account 100.00 -Total 188.67 88.67

Foreign Exchange Earnings ReserveBalance as per Last Account 7.51 7.51

Foreign Exchange Earnings Utilised ReserveBalance as per Last Account 2.31 2.31

Foreign Currency Translation Reserve (Refer Note 1 (f), Page 90)Balance as per Last Account 10.55 35.41Add / (Less) : Foreign Exchange fluctuation for the year 86.63 (24.86)Less : Transferred to Profit and Loss Account

(Refer Note 10 (e), Page 95) 20.19 -Total 76.99 10.55

Profit and Loss AccountBalance carried forward 539.25 536.78

2,975.29 1,956.29

75



Schedule 3 : Secured LoansMarch 31, 2008


DEBENTURES

2,500, 9.5% Secured Non-Convertible Debentures ofRs.10 lakhs each, allotted on February 27, 2007, and repayableat the end of the 5th year from the date of allotment 250.00 250.00

3,000, 9.86% Secured Non-Convertible Debentures ofRs.10 lakhs each, allotted on September 3, 2007, and repayableat the end of the 3rd year from the date of allotment 300.00 300.00

6,02,76,898, 6% Secured Non-Convertible Debentures ofRs.100 each, allotted on May 13, 2008, and repayable at theend of the 3rd year from the date of allotment 602.77 -

3,000, 11.8% Secured Non-Convertible Debentures ofRs.10 lakhs each, allotted on 18th December, 2008, andrepayable in 3 annual instalments commencing from theend of the 3rd year 300.00 -

Security :

All the above Debentures are secured by a pari passu firstcharge created on all the fixed assets of the Company, bothpresent and future, other than immovable properties andmovable assets of Taj Wellington Mews, Mumbai

Term loan from a Bank [Repayable within one year -Rs. 100 crores (Previous year - Nil)] 100.00 100.00

Add : Exchange Loss / (Gain) on Currency Swapof the above Term Loan 15.81 (9.04)

115.81 90.96

Security :

The Term Loan is secured by a specific charge on theimmovable properties and movable assets ofTaj Wellington Mews, Mumbai

Term loan from Housing Development FinanceCorporation Limited (HDFC) - 83.29

Security :

Term Loan from HDFC was secured by a specific chargeon the immovable properties of Taj Exotica, Goa

FROM BANK

Bank Overdraft 29.44 31.33

( Secured by hypothecation of Operating Supplies, Stores,Food & Beverages and Receivables )

TOTAL 1,598.02 755.58

77



Schedule 5 : Fixed Assets

Rupees crores

Gross Block Additions Deductions Gross Block Accumulated Depreciation Deductions Accumulated Net Block Net Block(at cost ) for the for the (at cost ) Depreciation for the for the Depreciation as at as at

as at Year Year as at as at Year Year as at01.04.2008 31.03.2009 01.04.2008 31.03.2009 31.03.2009 31.03.2008

(See Note 2) (See Note 2)

TANGIBLE ASSETS

Freehold Land 136.28 - - 136.28 3.88 - - 3.88 132.40 132.40

135.47 0.81 - 136.28 3.88 - - 3.88 132.40

Leasehold Land 12.44 - - 12.44 0.32 0.14 - 0.46 11.98 12.12

12.02 0.61 0.19 12.44 0.20 0.12 - 0.32 12.12

Buildings(See Note 1 below) 838.58 139.61 2.54 975.65 102.98 19.39 0.44 121.93 853.72 735.60

815.49 25.21 2.12 838.58 88.65 14.68 0.35 102.98 735.60

Plant and Machinery 740.91 133.79 13.16 861.54 387.55 47.48 11.70 423.33 438.21 353.36

710.69 52.28 22.06 740.91 363.20 44.54 20.19 387.55 353.36

Furniture, Fixtures andOffice Equipment 304.59 34.91 5.05 334.45 188.74 22.84 4.17 207.41 127.04 115.85

290.90 18.11 4.42 304.59 170.72 21.44 3.42 188.74 115.85

Vehicles 13.00 3.75 0.62 16.13 5.70 1.03 0.48 6.25 9.88 7.30

13.19 0.80 0.99 13.00 5.27 1.07 0.64 5.70 7.30

INTANGIBLE ASSETS

Wesbite DevelopmentCost 4.61 - - 4.61 4.55 0.01 - 4.56 0.05 0.06

4.53 0.08 - 4.61 4.53 0.02 - 4.55 0.06

Customer ReservationSystem 6.57 2.15 - 8.72 1.55 1.29 - 2.84 5.88 5.02and licensed software 17.44 3.97 14.84 6.57 13.37 1.99 13.81 1.55 5.02

Service and OperatingRights 12.70 1.12 1.41 12.41 5.29 2.28 1.40 6.17 6.24 7.41

13.22 2.06 2.58 12.70 4.42 1.62 0.75 5.29 7.41

TOTAL 2,069.68 315.33 22.78 2,362.23 700.56 94.46 18.19 776.83 1,585.40 1,369.12

2,012.95 103.93 47.20 2,069.68 654.24 85.48 39.16 700.56 1,369.12

Notes :

(1) Gross Block includes improvements to buildings constructed on leasehold land - Rs. 423.10 crores; Previous Year -Rs. 406.98 crores .

(2) Accumulated Depreciation includes adjustment for impairment of Rs. 9.25 crores made in the earlier years.

(3) Attention is invited to Note 2 of Schedule 14 regarding the damage to The Taj Mahal Palace & Tower in Mumbai.

(4) Figures in italics are in respect of the previous year.


78


Schedule 6 : InvestmentsFace Holdings Holdings March 31,

Value As at Rupees Rupees As at 2008Long Term Rupees March 31, crores crores March 31, Rupees

(unless 2009 2008 croresTrade Investments : otherwise

stated)Fully Paid Unquoted Equity Shares(unless otherwise stated) :Hotels and Restaurant Co-op. ServiceSociety Ltd. (Rs. 1,000/-) 50 20 - 20 -Ideal Ice & Cold Storage Co. Ltd. 10 107,224 0.06 107,224 0.06India Tourism Development CorporationLtd.(Listed but not quoted) 10 67,50,275 44.58 67,50,275 44.58Inditravel Pvt. Ltd. 10 2,40,003 0.24 2,40,003 0.24Kumarkrupa Hotels Ltd. 10 96,432 0.94 96,432 0.94Piem Hotels Ltd. 10 8,81,228 35.27 8,81,228 35.27Rallis India Ltd. (7.5% CumulativeRedeemable Preference Shares) 10 2,00,00,000 20.00 2,00,00,000 20.00Taida Trading & Industries Ltd. 100 26,912 0.27 26,912 0.27Taj Air Ltd. 10 1,47,060 0.15 1,47,060 0.15Taj Asia Ltd. US$ 1 13,29,778 13.63 13,29,778 13.63Taj Enterprises Ltd. 100 7,000 0.07 7,000 0.07IHMS Hotels (SA) (Proprietary) Ltd.(formerly known as Taj InternationalHotels (South Africa) (Proprietary) Ltd.) South African(Rs. 3,052) Rand 1 500 - 500 -Taj Karnataka Hotels & Resorts Ltd. 10 3,00,000 0.30 3,00,000 0.30Taj Kerala Hotels & Resorts Ltd. 10 1,41,51,663 15.67 1,41,51,663 15.67Taj Madras Flight Kitchen Pvt. Ltd. 10 79,44,112 8.56 79,44,112 8.56Taj Madurai Ltd. 10 9,11,994 0.95 9,11,994 0.95Taj Rhein Shoes Co. Ltd. 100 45,000 0.45 45,000 0.45Taj Trade & Transport Co. Ltd. 10 12,54,000 2.67 12,54,000 2.67Taj Safaris Ltd. (12,50,000 sharesacquired during the year) 10 59,16,667 7.92 46,66,667 6.67Tata Projects Ltd. ( 75, 000 bonusshares allotted during the year) 100 90,000 0.17 15,000 0.17Tata Services Ltd. 1,000 421 0.03 421 0.03Tata Sons Ltd. 1,000 4,500 25.00 4,500 25.00BJETS Pte Ltd. , Singapore US$ 1 2,00,00,000 102.59 - -Tril Infopark Ltd. 10 4,91,18,060 49.12 - -

328.64 175.68Quoted Equity Shares - Fully Paid :Tourism Finance Corporation of India Ltd. 10 50,000 0.10 50,000 0.10Benares Hotels Ltd. 10 2,93,000 0.69 2,93,000 0.69Taj Lanka Hotels Ltd. Sri Lankan Rs 10 3,43,75,640 18.72 3,43,75,640 18.72Oriental Hotels Ltd. 10 33,76,455 28.72 33,76,455 28.72Taj GVK Hotels & Resorts Ltd. 2 1,60,00,000 40.34 1,60,00,000 40.34Tata Consultancy Services Ltd. 1 614,376 0.05 614,376 0.05

88.62 88.62Carried over 417.26 264.30

79



Schedule 6 : Investments (Contd.)Face Holdings Holdings March 31,

Value As at Rupees Rupees As at 2008Rupees March 31, crores crores March 31, Rupees(unless 2009 2008 crores

otherwisestated)

Brought over 417.26 264.30Investments in Subsidiary CompaniesUnqoted Equity Shares - Fully Paid :International Hotel Management Services Inc.(includes Rs. 365.08 crores by way of additionalpaid-in capital during the year) US $ 1 100 783.55 100 418.47KTC Hotels Ltd. 10 6,04,000 0.70 6,04,000 0.70Residency Food & Beverages Ltd. 10 1,85,00,000 18.25 1,85,00,000 18.25Roots Corporation Ltd. 10 5,10,00,000 51.00 5,10,00,000 51.00Taj International Hotels (H.K.) Ltd.(2,32,45,000 shares alloted during the year) US $ 1 5,00,00,000 190.23 2,67,55,000 81.12TIFCO Holdings Ltd. (formerly known asTaj Investment & Finance Company Ltd. ) 10 8,15,00,000 81.50 8,15,00,000 81.50Taj SATS Air Catering Ltd. 10 88,74,000 61.82 88,74,000 61.82United Hotels Ltd. 10 25,18,320 1.11 25,18,320 1.11

1,188.16 713.97Non-trade Investments - Long TermCentral India Spinning Weaving &Manufacturing Co. Ltd. 500 50 - 50 -(10% unquoted Cumulative Preference Shares)(Rs. 27,888/-)HDFC Bank Ltd. (quoted Equity Shares) (Rs. 5,000/- ) 10 500 - 500 -National Savings Certificate (Rs 10,000) - -

- -Total Long Term Investments - Gross 1,605.42 978.27Less : Provision for Diminution in Value of Investments 0.69 0.69Total Long Term Investments - Net 1,604.73 977.58Current Investments (Refer Note 3 below)Investments in Mutual Fund Units (Unquoted)ABN Amro Money Plus IP fund-Daily Dividend 10 6,60,81,388 66.10 -DWS Money Plus Fund-IP-Daily Dividend 10 4,08,81,766 40.92 -Kotak Floater-LT-Daily Dividend 10 3,98,15,614 40.13 -Birla Sun Life Liquid Plus-IP-Daily Dividend 10 5,62,92,424 56.33 -ICICI Prudential Flexible Income Plan-Daily Dividend 10 4,94,02,547 52.24 -JM Money ManagerFund-Super Plan- Daily Dividend 10 50,24,833 5.03 -Templeton IndiaUltra Short BondFund-IP-Daily Dividend 10 4,57,84,604 45.84 -Tata Floater Fund-Daily Dividend 10 5,10,02,326 51.18 -UTI Liquid Plus Fund- IP-Daily Dividend 1,000 2,08,201 20.82 -Sundaram BNP Paribas-Liquid Plus-Super IP-Daily Dividend 10 4,14,47,061 41.55 -Fidelity Ultra Short Term Debt Fund-Super IP-Daily Dividend 10 20,16,879 2.01 -

422.15 -TOTAL 2,026.88 977.58Notes :1 Aggregate of Quoted Investments - Gross : Cost 88.62 88.62

: Market Value 184.92 335.022 Aggregate of Unquoted Investments - Gross : Cost 1,938.95 889.653 The unutilised monies out of the Rights Issue proceeds as at the year end aggregating Rs. 105.50 crores have been temporarily invested

in various Liquid Mutual Fund Schemes. (Refer Note 3, Page 92 )


80


Schedule 6 : Investments (Contd.)

During the year the Company acquired and sold the following investments in Mutual FundsMarch 31,

2008Rupees Rupees Rupees

crores crores croresParticulars Face value No of Units Purchase No of Purchase

Cost Units CostABN AMRO Interval Fund - Montly Plan A- Dividend-Red 10 2,51,77,027 25.36ABN AMRO Overnight Fund - Institutional PlusPlan - Daily Dividend 10 13,60,59,167 136.08AIG India Liquid Fund - Super IP - Daily Dividend 1,000 4,69,721 47.01AIG India Treasury Plus Fund -Super IP - Daily Dividend 10 7,53,67,185 75.45DWS Insta Cash Plus - Super IP - Daily Dividend 10 16,54,04,003 165.73DWS Liquid Plus Fund - IP - Daily Dividend 10 17,61,11,508 176.30DWS FTF - Series 57 - IP - Dividend 10 1,02,06,017 10.21Grindlays Floating Fund LT -Inst Plan B - Daily Dividend 10 - - 1,50,19,042 15.02IDFC Liquidity Manager Fund Plus - Daily Dividend 1,000 9,99,960 100.02IDFC F R F - IP - LTP - Plan B - Daily Dividend 10 15,03,05,712 150.39IDFC Liquid Plus - Treasury Plan -Plan B - Daily Dividend 10 2,61,09,587 26.29IDFC Liquid Plus - Treasury Plan - PlanC - Daily Dividend 10 1,50,25,846 15.03IDFC Cash Fund - Plan B - Daily Dividend 10 75,61,892 8.00IDFC Cash Fund - Plan C - Daily Dividend 10 2,79,98,362 28.01ING Liquid Fund - Super IP - Daily Dividend 10 17,34,78,913 173.56ING Liquid Plus Fund - IP - Daily Dividend 10 20,05,34,414 200.60HSBC Cash Fund - Super IP - Daily Dividend 10 5,29,84,395 53.04HSBC Cash Fund-Institutional Plus - Daily Dividend 10 10,99,11,639 110.04HSBC FTS 60 - IP - Dividend 10 2,55,54,228 25.55Kotak FMP- 1 Months- Series 1- Dividend 10 5,07,92,668 50.79Kotak FMP- 3 Months- Series 33- Dividend 10 5,18,77,738 51.88Kotak FMP- 1 Months- Series 3 - Dividend 10 2,51,80,479 25.18Kotak Monthly Interval Plan - Series II - Dividend 10 2,53,47,051 25.35Kotak FMP- 1 Months- Series III - Dividend 10 4,02,70,267 40.27Kotak Liquid - Inst Premium Plan - Daily Dividend 10 65,43,523 8.00Kotak Flexi Debt Fund- Daily Dividend 10 12,00,85,807 120.49Kotak Liquid - Inst Premium Plan - Daily Dividend 10 7,78,47,348 95.19Birla Sun Life Cash Plus- InstitutionalPremium Plan-Daily Dividend 10 23,71,02,202 237.59 4,74,51,669 47.54Birla Sun Life Interval Income FundMonthly Plan - Series I - IP - Dividend 10 50,35,870 5.04Birla Sun Life Interval Income FundMonthly Plan - Series II - IP - Dividend 10 3,51,05,626 35.27HDFC Cash Management Fund-Savings Plan-Daily Dividend 10 2,77,39,359 29.51HDFC FRIF-STF-WP-Daily Dividend 10 14,53,83,770 146.56Carried over 2,397.79 62.56

81







Cost Units Cost

Brought over 2,397.79 62.56HDFC Cash Management Fund- SavingsPlus- Wholesale- Daily Dividend 10 10,95,44,616 110.46 1,88,24,755 20.02HDFC Cash Management Fund- Call Plan - Daily Dividend 10 57,62,078 6.01ICICI Prudential Liquid-Super IP-Daily Dividend 10 40,12,25,178 401.25 3,50,30,457 35.03ICICI Prudential FMP- Series 44-1MPLan A- Ret Dividend 10 7,00,00,000 70.42ICICI Prudential FMP- Series 44-1MPLan B- Ret Dividend 10 3,01,93,500 30.19ICICI Prudential FMP- Series 44-1MPLan C- Ret Dividend 10 3,00,00,000 30.21ICICI Prudential FRF - Plan D - Daily Dividend 10 7,53,85,401 75.40ICICI Prudential FMP - S 48 - 1 Months -Plan A - IP - Dividend 10 2,00,00,000 20.16ICICI Prudential FMP - Series 44 - 1M -Plan D - Ret - Dividend 10 7,00,00,000 70.49ICICI Prudential Interval Fund -Monthly Interval I - IP - Dividend 10 13,68,98,349 136.90ICICI Prudential Interval Fund -Monthly Interval III - Dividend 10 6,54,37,245 65.47ICICI Prudential Interval Fund II -Quarterly Interval - Plan A - Dividend 10 1,53,30,720 15.33ICICI Prudential Flexible Income Plan - Daily Dividend 10 - - 66,33,044 7.01JM High Liquidity- Super IP- Daily Dividend 10 27,05,43,679 270.99JM Money Manager Fund- Super Plan - Daily Dividend 10 21,47,20,813 214.81JM Money Manager Fund-Super Plan-Daily Dividend 10 38,75,66,594 387.82JM Money Manager Fund-Super Plan-Daily Dividend 10 2,51,93,922 25.21JM Money Manager Fund- Super Plan - Daily Dividend 10 2,02,11,053 20.22JM FMF - Series XII - Monthly Plan 3 - IP - Dividend 10 2,01,48,971 20.15JM FMF - Series XII - Monthly Plan 3 - IP - Dividend 10 2,01,52,604 20.15Standard Chartered Liquidity Manager -Plus - Daily Dividend 1,000 3,30,265 33.03Templeton India TMA - IP - Daily Dividend 1,000 1,54,926 15.50Templeton India Ultra Short Bond Fund -Super IP - Dividend 10 7,27,58,712 72.90Templeton India Ultra Short Bond Fund - IP - Dividend 1,000 5,69,725 57.01Templeton India TMA - Super IP - Daily Dividend 1,000 4,49,776 45.01Tata Liquid Fund - SHIP - Daily Dividend 1,000 25,47,923 281.39 6,73,678 75.08Tata Dynamic Bond Fund - Option B - Dividend 10 7,40,14,183 75.90Tata FIP Fund - Series A2 - IP - Monthly Dividend 10 5,54,46,674 55.59Tata FIP Fund - Series A3 - IP - Monthly Dividend 10 3,61,50,429 36.32Tata FIP Fund - Series A3 - IP - Monthly Dividend 10 1,50,27,132 15.36UTI Liquid Fund - Cash Plan - IP - Daily Dividend 1,000 7,40,731 75.51UTI Fixed Income Interval Fund - MonthlyPlan I - IP - Dividend 10 15,73,86,465 157.39Carried over 5,277.31 232.73


82






Cost Units CostBrought over 5,277.31 232.73

UTI Fixed Income Interval Fund -Monthly Plan II - IP - Dividend 10 7,63,63,000 76.36 - -

UTI Money Market - Daily Dividend 10 5,53,51,518 100.27 - -

SBI Magnum Insta Cash - Daily Dividend 10 29,94,765 5.02 - -

Sundaram BNP Paribas Money Fund - IP- Daily Dividend 10 49,54,531 5.00 - -

Sundaram BNP Paribas Money Fund -Super IP - Daily Dividend 10 3,56,67,811 36.01 - -

Fidelity Cash Fund - Super IP - Daily Dividend 10 99,96,054 10.00 - -

ABN Amro Money Plus IP fund-Daily Dividend 10 7,86,40,962 78.65 - -

DWS Money Plus Fund-IP-Daily Dividend 10 69,94,065 7.00 - -

Kotak Floater-LT-Daily Dividend 10 2,48,02,079 25.00 - -

Birla Sun Life Liquid Plus-IP-Daily Dividend 10 28,57,08,886 285.90 - -

ICICI Prudential Flexible Income Plan-Daily Dividend 10 23,22,61,567 245.58 - -

JM Money ManagerFund-Super Plan-Daily Dividend 10 14,61,26,150 146.20 - -

Templeton IndiaUltra Short Bond Fund-IP-Daily Dividend 10 49,99,839 5.01 - -

Tata Floater Fund-Daily Dividend 10 24,76,29,343 248.51 - -

UTI Liquid Plus Fund- IP-Daily Dividend 1,000 99,979 10.00 - -

Fidelity Ultra Short Term Debt Fund-SuperIP-Daily Dividend 10 79,98,001 8.00 - -

Total 6,569.82 232.73

Schedule 7 : Long Term DepositsMarch 31, 2008


Long term deposits placed for Hotel Properties [includes Rs. 3.50 croresplaced with subsidiaries (Previous Year - Rs. 3.50 crores)] 139.89 142.81

Shareholder’s Deposit placed :

(i) With Subsidiary Companies (Refer Note 6, Page 94) 508.30 417.63

(ii) With Others 29.59 25.11

TOTAL 677.78 585.55

83



Schedule 8 : Current Assets, Loans and AdvancesMarch 31, 2008


InventoriesStores and Operating Supplies 17.96 15.16Food and Beverages 20.95 17.69

38.91 32.85Sundry Debtors (Unsecured) (See Note 1 below)

Outstanding over six months :Considered good 21.89 20.91Considered doubtful 10.39 10.32

32.28 31.23Others (Considered good) 79.81 117.50

112.09 148.73Less : Provision for Doubtful Debts (Refer Note 28, Page 107 ) 10.39 10.32

101.70 138.41Cash and Bank Balances

Cash on Hand [Including Cheques on Hand - Rs.4.10 crores;(Previous Year - Rs. 16.61 crores)] 5.24 19.03Balances with Scheduled Banks :In Current Accounts 15.63 28.92In Call and Short Term Deposit Accounts 1.46 1.43In Rights Issue Collection Account - 23.85

17.09 54.20Balances with Non-Scheduled Banks (Refer Note 11 (a), Page 96 ) :In Current Accounts 0.94 1.07In Call and Short Term Deposit Accounts 0.17 0.13

1.11 1.2023.44 74.43

Loans and Advances(Unsecured, considered good)

Deposits with Public Bodies and Others 36.34 33.39Advances to Subsidiary Companies 16.10 4.75Deposits with Companies :Subsidiary Companies 1.82 21.28Others 159.11 19.57

160.93 40.85Other Advances (See Note 2 below) :Considered good 563.39 251.02Considered doubtful 0.98 0.98

564.37 252.00Provision for Doubtful Advances 0.98 0.98

563.39 251.02776.76 330.01

TOTAL 940.81 575.70Notes :(1) Sundry Debtors include debts due from Directors - Rs. 0.02 crore (Previous Year - Rs. 0.01 crore) in the ordinary course of

business. Maximum amount due during the year - Rs. 0.07 crore (Previous Year - Rs. 0.08 crore).(2) Other Advances include :(i) Amount paid towards Share Application Money - Rs. 0.20 crore (Previous Year - Rs. 49.80 crores).(ii) Advance payment of Income tax, net of provisions for current tax - Rs. 150.35 crores (Previous Year - Rs. 113.06 crores).(iii) Advance consideration for acquisition of shares of a Company owning hotel property - Rs. 250.00 crores (Previous Year - Nil).(iv) Insurance claim receivable (net of reimbursement) - Rs 73.49 crores (Previous Year - Nil).


84


Schedule 9 : Current Liabilities & ProvisionsMarch 31, 2008


CURRENT LIABILITIES

Sundry Creditors :

(i) Total Outstanding dues of micro and small enterprises(Refer Note 32, Page 109) 0.40 0.02

(ii) Total Outstanding dues of Creditors other than microand small enterprises (Refer Note 1 below) 177.38 148.56

177.78 148.58

Other Liabilities 41.55 59.01

Sundry Deposits 8.72 8.18

Advance Collections against Reservation 42.21 38.53

Interest accrued but not due 47.27 6.34

Non-Convertible Debenture Application money - 3.88

Interim Dividend - 114.54

Tax on Interim Dividend - 19.47

Amount to be credited to Investor Education andProtection Fund (Refer Note 2 below) :

Dividend Warrants issued but not encashed 2.17 2.00

Unclaimed matured deposits 0.41 0.42

Unclaimed matured debenture (Rs. 25,100) - 0.02

Refund of excess Rights Issue application money not encashed 0.16 -

Unclaimed Interest accured theron 0.09 0.17

2.83 2.61

TOTAL CURRENT LIABILITIES 320.36 401.14

PROVISIONS

Employee Benefits 37.75 31.30

Contingencies (Refer Note 12 (c) , Page 97) 1.12 1.12

Fringe Benefit Tax (net) 0.40 0.59

Loyalty Programmes (Refer Note 29, Page 107) 12.57 10.96

Proposed Dividend 86.81 -

Tax on Dividend 14.75 -

TOTAL PROVISIONS 153.40 43.97

TOTAL 473.76 445.11

Note:

1) The figure includes Rs 6.63 crores (Previous year - Rs 5.27) due to subsidiary companies.

2) The figure does not include any amount, due and outstanding, to be credited to Investor Education and Protection Fund . Duringthe year, Rs. 0.22 crore (Previous year - Rs. 0.26 crore) have been transferred to the Fund.

85



Schedule 10 : Miscellaneous Expenditure (to the extent not adjusted or written off)March 31, 2008


Borrowing Costs

Opening Balance 1.32 0.74

Add : Incurred during the year - 1.15

Less : Amortised during the year (Refer Note 15, Page 98 ) 0.59 0.57

Closing Balance 0.73 1.32

Voluntary Retirement Scheme (VRS)


Less : Amortised during the year 0.13 0.51

Closing Balance - 0.13

TOTAL 0.73 1.45


86

Schedules forming part of the Profit and Loss Account

Schedule 11 : Rooms, Restaurants, Banquets and Other Income

Previous YearRupees Rupees Rupees

INCOME crores crores crores

Rooms, Restaurants, Banquets and Other Services[Includes Sale of Food and Beverages - Rs. 460.08 crores(Previous Year - Rs. 531.16 crores)] 1,534.03 1,764.51

Other Operating Income (Refer Note 2 (a), Page 92 ) 85.54 -

TOTAL 1,619.57 1,764.51

Other Income

Dividend Income (Refer Note 10 (c) and (d), Page 95 ) 69.50 19.98

Profit on sale of assets (Net) 4.09 -

Profit on sale of Current Investments 0.04 0.07

Miscellaneous Income (Refer Note 10 (e), Page 95 ) 13.32 38.60

TOTAL 86.95 58.65

TOTAL 1,706.52 1,823.16

Schedule 12 : Operating and General Expenses(Refer Note 10 (a) , Page 95)


OPERATING EXPENSES crores crores crores

Payments to & Provisions for Employees

Salaries, Wages, Bonus etc. 269.34 228.88

Company’s Contribution to Provident & Other Funds 46.36 22.59

Reimbursement of Expenses on Personnel Deputed to the Company 7.00 3.83

Payment to Contractors 16.48 12.47

Staff Welfare Expenses 50.62 45.00

389.80 312.77

Food & Beverages Consumed

Opening Stock 17.69 15.19

Add: Purchases 117.80 130.74

135.49 145.93

Less: Closing Stock 20.95 17.69

114.54 128.24

Carried Over 504.34 441.01

87


Schedules forming part of the Profit and Loss Account

Schedule 12 : Operating and General Expenses (contd..)

Previous YearRupees Rupees Rupeescrores crores crores

Brought Over 504.34 441.01

Other Operating ExpensesLinen & Room Supplies 24.97 27.68

Catering Supplies 13.95 15.42

Other Supplies 2.23 2.35Fuel, Power & Light 98.50 92.61

Repairs to Buildings 19.85 19.17

Repairs to Machinery 22.40 20.58Repairs to Others 16.59 17.29

Linen & Uniform Washing and Laundry Expenses 6.62 6.94

Payment to Orchestra Staff, Artists and Others 9.97 7.58Guest Transportation 11.13 12.59

Travel Agents’ Commision 13.12 15.94

Discount to Collecting Agents 16.33 18.13Other Operating Expenses 15.73 18.57

271.39 274.85

GENERAL EXPENSESRent 28.31 24.18

Licence Fees 97.51 104.73

Rates & Taxes 22.03 28.00Insurance 5.63 6.76

Advertising & Publicity 74.01 66.84

Printing & Stationery 8.06 9.82Passage & Travelling 14.51 15.60

Provision for Doubtful Debts (Refer Note 28, Page 107 ) 2.98 2.40

Professional Fees 38.30 36.31Exchange Loss (Refer Note 10 (e), Page 95 ) 22.23 -

Loss on Sale of Fixed Assets (Net) - 5.98

Other Expenses 69.00 51.83Auditors’ Remuneration (Refer Note 16, Page 98 ) 1.37 1.40

383.94 353.85

Amortisation of Voluntary Retirement Scheme Expenses 0.13 0.51Directors’ Fees and Commission 3.72 4.13

TOTAL 1,163.52 1,074.35


88


Profit as per Profit and Loss Account 362.30 580.47

Add :

Provision for doubtful debts 0.07 (1.15)

Loss on sale of fixed assets - 5.98

Directors’ Remuneration (including Directors’ Fees) 12.19 9.29

12.26 14.11

374.56 594.58

Less :

Capital profit on sale of assets 4.94 -

Profit on sale of investments 0.04 0.07

4.98 0.07

Profit 369.58 594.51

Commission to Directors :

Managing Director and Executive Directors 3.00 1.80

Other Directors (Restricted to 1% of net profit) 3.60 4.00

TOTAL 6.60 5.80

Schedules forming part of the Profit and Loss AccountSchedule 13 :Computation of Net Profit Under Sections 198 and 309(5) of the Companies Act, 1956

89


Schedules forming part of the Balance SheetSchedule 14 : Notes to the Balance Sheet and the Profit and Loss Account

1. Significant Accounting Policies:

The financial statements are prepared under historical cost convention on an accrual basis and comply with theAccounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006. The preparation of thefinancial statements requires the Management to make estimates and assumptions considered in the reported amountsof assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reportedincome and expenses. The Management believes that the estimates used in the preparation of the financial statementsare prudent and reasonable. Future results could differ from these estimates. The significant accounting policiesadopted in the presentation of the financial Statements are as under:-

(a) Rooms, Restaurants, Banquets and Other Services:

Rooms, Restaurants, Banquets and Other Services comprise of sale of rooms, food and beverages, alliedservices relating to hotel operations, including net income from telecommunication services and managementand operating fees. Revenue is recognised upon rendering of the service.

(b) Export Benefits Entitlement:

Benefits arising out of Duty Free Scrips utilised for the acquisition of fixed assets are being adjusted against thecost of the related fixed assets (Refer Note 8, Page 94).

(c) Employee Benefits:

i. Provident Fund

The Company's contribution to the recognised Provident Fund, paid/payable during the year, is debitedto the Profit and Loss Account. The shortfall, if any, between the return guaranteed by the statute andactual earnings of the Fund is provided for by the Company and contributed to the Fund.

ii. Gratuity Fund

The Company makes annual contributions to funds administered by trustees and managed by an insurancecompany for amounts notified by the said insurance company. The Company accounts for the netpresent value of its obligations for gratuity benefits based on an independent external actuarial valuationdetermined on the basis of the projected unit credit method carried out as at the Balance Sheet date.Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

iii. Post Retirement Benefits

The net present value of the Company's obligation towards post retirement pension scheme for wholetime directors is actuarially determined, based on the projected unit credit method. Actuarial gains andlosses are recognised immediately in the Profit and Loss Account.

iv. Superannuation

The Company has a defined contribution plan, wherein it annually contributes a sum equivalent to theemployee's eligible annual basic salary to an insurance company, which administers the fund. The Companyrecognises such contributions as an expense in the year they are incurred.

The Company also has separate funded and unfunded schemes, which guarantee a minimum pension tocertain categories of employees. The Company accounts for the net present value of its obligationstherein, based on an independent external actuarial valuation carried out as at the Balance Sheet date,


90


which is determined on the basis of the projected unit credit method. Actuarial gains and losses arerecognised immediately in the Profit and Loss Account.

v. Compensated Absences

The Company has a scheme for compensated absences for employees, the liability for which is determinedon the basis of an actuarial valuation carried out at the Balance Sheet date.

vi. Other Employee Benefits

Other benefits comprising of Long Service Awards and Leave Travel Allowances are determined on anundiscounted basis and recognised based on the likely entitlement thereof.

(d) Fixed Assets:

Fixed assets are stated at cost less depreciation/amortisation and impairment losses, if any. Cost includesexpenses incidental to the installation of assets and attributable borrowing costs.

(e) Depreciation/Amortisation:

In respect of assets acquired before December 16, 1993, depreciation is provided under the straight-line methodat the rates and in the manner specified in Schedule XIV to the Companies Act, 1956, as existing on that date.

In respect of assets acquired on or after December 16, 1993, depreciation is provided at the rates as specified inSchedule XIV to the Companies Act, 1956, as revised with effect from that date. In respect of Leasehold Land,depreciation is provided for, from the date the land is put to use for commercial operations, over the balanceperiod of the lease. In respect of Improvements to Building, depreciation is provided @ 6.67%.

Intangible assets are amortised on a straight-line basis at rates specified below:

Website Development Cost - 20.00%

Cost of Customer Reservation System (including licensed software) - 16.67%

Service & Operating Rights - 10.00%

(f) Transactions in Foreign Exchange:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

In respect of integral foreign operations:-

i. Monetary items outstanding at the Balance Sheet date are translated at the exchange rate prevailing atthe Balance Sheet date and the resultant difference is recognised as income or expense.

ii. Non-monetary items outstanding at the Balance Sheet date are reported using the exchange rate at thedate of the transactions.

In respect of non-integral foreign operations:-

Both monetary and non-monetary items are translated at the closing rate and the resultant difference isaccumulated in a Foreign Currency Translation Reserve, until the disposal of the net investment.

The exchange differences arising on revaluation of long term foreign currency monetary items for the yearended March 31, 2008 and 2009 are being amortised over the shorter of the maturity period or March 31, 2011.

91



The unamortised balance as at the year end is presented as "Foreign Currency Monetary Item TranslationDifference Account".

(g) Derivative Instruments:

The Company has an exposure to derivative contracts in the nature of currency swaps which are in respect ofsome of the underlying rupee borrowings. Exchange differences arising on repayment/revaluation of suchcurrency swaps are recognised as income or expense in the period in which they arise.

(h) Impairment of Assets:

Impairment is ascertained at each Balance Sheet date in respect of the Company's fixed assets. An impairmentloss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverableamount is the greater of the net selling price and value in use. In assessing value in use, the estimated futurecash flows are discounted to their present value, based on an appropriate discount factor.

(i) Assets taken on lease:

Operating Lease payments are recognised as expenditure in the Profit and Loss Account on a straight linebasis, representative of the time pattern of benefits received from the use of the assets taken on lease.

(j) Inventories:

Stock of food and beverages and operating supplies are carried at cost (computed on a weighted average basis)or Net Realisable Value, whichever is lower.

(k) Investments:

i. Long term investments are carried at cost. However, provision is made for diminution in value, other thantemporary, on an individual basis.

ii. Current investments are carried at the lower of cost and fair value, determined on a category-wise basis.

(l) Miscellaneous Expenditure:

Payments made under the Voluntary Retirement Scheme, including the additional liabilities towards leaveencashment and gratuity, arising pursuant to the Voluntary Retirement Scheme, are amortised over a period of60 months, commencing from the month in which the Scheme is implemented.

(m) Taxes on income:

i. Income tax is computed in accordance with Accounting Standard 22 - 'Accounting for Taxes on Income'(AS-22), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted inthe same period to which the revenue and expenses relate.

ii. Provision for current income tax is made for the tax liability payable on taxable income after consideringtax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. Thedifferences between the taxable income and the net profit or loss before tax for the year as per the financialstatements are identified and the tax effect of timing differences is recognised as a deferred tax asset ordeferred tax liability. The tax effect is calculated on accumulated timing differences at the end of theaccounting year, based on effective tax rates substantively enacted by the Balance Sheet date.


92


iii. Deferred tax assets, other than on unabsorbed depreciation or carried forward losses, are recognisedonly if there is reasonable certainty that they will be realised in the future and are reviewed for theappropriateness of their respective carrying values at each Balance Sheet date. In situations where theCompany has unabsorbed depreciation or carried forward losses, deferred tax assets are recognised onlyif there is virtual certainty supported by convincing evidence that the same can be realised against futuretaxable profits.

(n) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - 'Provisions, Contingent Liabilities and ContingentAssets' (AS-29), notified by the Companies (Accounting Standards) Rules, 2006, when there is a present legalor statutory obligation as a result of past events, where it is probable that there will be outflow of resources tosettle the obligation and when a reliable estimate of the amount of the obligation can be made. ContingentLiabilities are recognised only when there is a possible obligation arising from past events, due to occurrenceor non-occurrence of one or more uncertain future events, not wholly within the control of the Company, orwhere any present obligation cannot be measured in terms of future outflow of resources, or where a reliableestimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only thosehaving a largely probable outflow of resources are provided for. Contingent Assets are not recognised in thefinancial statements.

(o) Borrowing Costs :

i. Interest and other borrowing costs on specific borrowings, attributable to qualifying assets are capitalised.

ii. Interest not attributable to qualifying assets is charged to revenue account in the year in which it isincurred.

iii. Debenture issue costs are adjusted against the Security Premium Account in accordance with Section 78of the Companies Act, 1956.

iv. Other Borrowing Costs are charged to revenue account over the tenure of the borrowing.

2. (a) The Taj Mahal Palace & Tower in Mumbai was attacked by terrorists on November 26, 2008 amongst the othertargets in the city, due to which the heritage wing of the property was severely damaged. No adjustments havebeen carried out in the books of account of the Company, with regard to the value of the damage to property, asthe Company is adequately insured for property restoration under its insurance policy. The Company is alsoinsured for Loss of Profits to cover the period of interruption for up to 12 months from the date of the incident.Accordingly, the Company has recognised a claim for Business Interruption upto March 31, 2009, amounting toRs. 85.54 crores on an estimated basis and is at an advanced stage of finalising the claim with the Insurers.

(b) Exceptional item of Rs 6.21 crores pertains to annuities purchased from the Life Insurance Corporation of Indiafor pension payments to legal heirs of the employees deceased in the above mentioned incident.

3. Rights Issue of Simultaneous but unlinked issue of Equity Shares and Non-Convertible Debentures with DetachableWarrants to the equity shareholders of the Company

During the year, the Company completed its simultaneous but unlinked issue of Equity Shares at a price of Rs. 70 eachand 6,02,76,898, 6% Non-Convertible Debentures with Detachable Warrants aggregating Rs. 1,446.65 crores. The

93



warrant holders can exercise their right to apply for the Equity Shares at the Exercise Price of Rs. 150 at any time duringthe Warrant Exercise Period i.e. September, 2009. Consequently, the Share Capital of the Company increased from Rs.60.29 crores to Rs. 72.34 crores on allotment of 120,553,795 Equity Shares. The expenditure of Rs. 7.04 crores (net oftax of Rs. 1.08 crores) in connection with the Rights Issue has been set off against the 'Securities Premium Account'in accordance with Section 78 of the Companies Act, 1956.

The Funds raised by way of Rights Issue of Equity Shares and Non-Convertible Debentures were utilised as under :-

Rs. crores

Particulars Amount

Amounts raised through Rights Issue 1,446.65

Utilisation

Capital expenditure on Projects 108.80

Investment in International Subsidiaries / Associates 591.49

Investment in Domestic Companies 299.12

Repayment of Long Term Debts 83.29

General corporate purposes 250.33

Issue expenses 8.12

Total 1,341.15

Surplus Amounts invested in Mutual Funds as on March 31, 2009 105.50

4. Non-Convertible Debentures:

The Company has, during the year, issued 11.86% Secured Non-Convertible Debentures, having a face value of Rs.10,00,000/- each, aggregating Rs. 300 crores. The expenses in relation to the said issue, amounting to Rs. 0.87 crore(net of tax of Rs. 0.45 crore), have been set off against the 'Securities Premium Account', in accordance with Section78 of the Companies Act, 1956.

5. Provision for Current Tax, Deferred Tax & Fringe Benefit Tax:-

(a) Provision for tax includes the following :

Rs. crores

Particulars Current PreviousYear Year

Current Tax 109.00 191.00

Wealth Tax 1.00 0.90

Deferred Tax charge 9.08 2.46

Fringe Benefit Tax 5.50 4.55

Total provision 124.58 198.91


94


(b) The net deferred tax liability comprises of the following :

Rs. crores


Deferred tax liability

Depreciation on fixed assets 167.00 154.73

Total (A) 167.00 154.73

Deferred tax asset

Provision for doubtful debts 3.53 3.51


Others 8.05 5.81

Total (B) 20.06 16.87

Net deferred tax liability (A-B) 146.94 137.86

6. Shareholder's Deposits placed with a subsidiary company include Rs. 168.70 crores (equivalent to USD 33.110 million)[(previous year Rs.135.20 crores) (equivalent to USD 33.784 million)] placed in earlier years, with the Companyretaining the right to convert the said deposits into equity by December 31, 2009, as per the permission received fromthe Reserve Bank of India.

7. (a) The Company has given an undertaking to The Hongkong & Shanghai Banking Corporation, in respect ofborrowing by IHMS (Australia) Pty Limited, a wholly-owned subsidiary, for Australian Dollars 10.44 million,that it will not dilute its shareholding in its subsidiary, IHMS (Australia) Pty Limited.

(b) The Company has given a letter of comfort to Standard Chartered Bank, Singapore, in respect of credit facilitiesof US $ 150 Million given to its wholly-owned subsidiary Samsara Properties Ltd, British Virgin Islands, that itwill not dilute its shareholding in its subsidiary, Samsara Properties Ltd.

8. Benefits arising out of Duty Free Scrips, utilised for the acquisition of fixed assets are, with effect from April 1, 2008,being adjusted against the cost of the related asset, as against the practice hitherto followed of recognising the sameas income. Consequent upon the change, miscellaneous income for the year is lower by Rs. 17.90 crores, with acorresponding deduction in the value of fixed assets, as also reduction in the depreciation thereon.

9. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 351.29 crores(previous year - Rs. 194.56 crores).

95



10. (a) Expenditure recovered from other parties :-

Rs. crores


Salaries & Wages - 0.10

Fuel, Power and Light 4.24 5.13

Repairs to Buildings 0.11 0.10

Repairs to Machinery 0.11 0.10

Linen and Uniform Washing 0.97 0.60

Rent 0.11 0.02

Other Expenses 0.67 0.44

Total 6.21 6.49

(b) Purchase of Food and Beverages is after adjusting Rs. 0.69 crore (previous year - Rs. 0.66 crore) on account ofsale of empties, etc.

(c) Dividend Income includes dividend from subsidiary companies - Rs. 6.51 crores (previous year - Rs. 4.75crores).

(d) Dividend Income includes income on long term investments - Rs. 31.08 crores (previous year - Rs. 19.73 crores)and on current investments - Rs. 38.42 crores (previous year - Rs. 0.25 crore).

(e) Exchange loss includes loss on currency swap - Rs. 24.80 crores (previous year - gain of Rs. 7.00 crores includedin Miscellaneous Income) and gain on foreign exchange transactions - Rs. 2.57 crores (previous year - gain ofRs. 10.09 crores included in Miscellaneous Income) which includes Rs. 20.19 crores (previous year - Nil)transferred from Foreign Currency Translation Reserve upon realisation.

(f) Other expenses include Bad Debts written off - Rs. 1.89 crores (previous year - Rs. 2.33 crores).


96

11. Cash and Bank Balances:

(a) Balances with Non-Scheduled Banks comprise of :-

Particulars Maximum Maximumamount Amount

Current Previous outstanding in outstanding inYear Year Current Year Previous Year

Rs. Rs. Rs. Rs.

Current Account

Standard Chartered Bank, Beijing 2,63,317 19,251 2,63,317 22,640

Citibank, New York 24,357 19,066 24,357 20,427

National Westminster Bank PLC, London 78,10,589 80,88,477 80,88,477 80,88,477

HSBC Bank, Dubai 13,12,348 25,34,733 25,34,733 61,59,846

Total Current Account 94,10,611 1,06,61,527

Deposit Account

Citibank, New York 17,19,882 13,36,273 17,19,882 13,97,520

(b) Details of Cash and Cash Equivalents:-

Rs. crores


Cash and Bank balances ( as per Schedule 8 ) 23.44 74.43

Add :- Investment in Liquid Mutual Funds ( as per Schedule 6 ) 422.15 -

Cash and Cash Equivalents as per Cash Flow Statement 445.59 74.43

12. Contingent Liabilities:

(a) On account of Income Tax matters in dispute :

i. In respect of matters, which have been decided in the Company's favour by the Appellate Authorities,where the Income Tax Department has preferred an appeal - Rs. 57.01 crores (previous year - Rs. 63.60crores).

ii. In respect of other matters for which Company's appeals are pending - Rs. 21.67 crores (previous year -Rs. 34.55 crores).

The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favourof the Company.


97



(b) On account of other disputes in respect of :-

i. Luxury tax - Rs. 0.32 crore (previous year - Rs. 0.42 crore).ii. Entertainment tax - Rs. 0.53 crore (previous year - Rs. 0.53 crore).

iii. Sales tax - Rs. 6.22 crores (previous year - Rs. 4.04 crores).

iv. Property tax - Rs. 6.77 crores (previous year - Rs. 6.39 crores).v. Stamp Duty - Rs. 2.34 crores (previous year - Rs. 2.34 crores)

vi. Others - Rs. 8.17 crores (previous year - Rs. 7.81 crores)

(c) In respect of a disputed demand of Rs. 4.15 crores, made in an earlier year towards Entertainment Tax in respectof a property, the Company has preferred an appeal in the High Court of Kolkata, West Bengal, and has paid anamount of Rs. 3.03 crores, under protest, to the relevant authorities, as directed by the court. As a matter ofprudence, the Company has made a provision of the entire amount, the unpaid demand of Rs. 1.12 crores isbeing reflected in the books of account as Provision for Contingencies.

(d) Other claims against the Company not acknowledged as debts - Rs. 90.14 crores (previous year - Rs. 56.67crores) mainly pertains to the demand of Rs. 22.32 crores, raised by the Delhi Development Authority, towardsadditional License fees (previous year - Rs. 17.14 crores) and additional ground rent amounting to Rs. 67.82crores (previous year - Rs 39.16 crores) demanded by the Mumbai Port Trust.

(e) Guarantees given by the Company in respect of deposits received and loans obtained by other companies, andoutstanding as on March 31, 2009 - Rs. 463.27 crores (previous year - Rs. 308.14 crores).

13. Managerial Remuneration:

Rs. crores


Salaries 3.67 2.39Benefits in Cash or in kind (estimated monetary value) 1.80 0.97

Commission on Profits 3.00 1.80

Total 8.47 5.16

Managerial remuneration excludes provision for gratuity and compensated absences, since these are provided on thebasis of an actuarial valuation of the Company's liability to all its employees.

14. The Company has taken certain vehicles on operating lease. The total lease rent paid on the same amounting toRs. 2.17 crores (previous year - Rs. 2.97 crores) is included under Other Expenses. The minimum future lease rentalspayable in respect thereof are as follows:-

Rs. crores


Not later than one year 1.90 2.10Later than one year but not later than five years 1.33 1.39Later than five years - -


98


15. Interest expense is net of interest income and comprises of :

Rs. crores


Interest Expense

Fixed loans# 119.15 97.18

Other loans @ 3.06 4.12

Total expense (A) 122.21 101.30

Interest Income (Gross)*

Inter-Corporate Deposits 21.85 2.75

Deposits with Banks 0.64 0.19

On Deposits from related parties 0.73 0.65

Interest on Income Tax Refund 3.79 2.20

Others 4.76 1.23

Total Income (B) 31.77 7.02

Interest (net) (A-B) 90.44 94.28

* Tax deducted at source 5.15 0.77

# Interest on Fixed Loans includes Rs. 0.59 crore (previous year - Rs. 0.57 crore) being expenses on loans amortisedover the tenure of the loan.

@ Includes interest on luxury tax - Nil (previous year - Rs. 2.14 crores).

16. Auditors' Remuneration:

Rs. crores


1) As Auditors 1.12 1.12

2) For Tax Audit 0.18 0.18

3) For Company Law matters (Rs. 25,000) - -

4) For Other Services 0.06 0.07

5) For out of pocket expenses 0.01 0.03

6) Service tax on above [Net of credit availed - Rs. 0.15 crore(Previous Year - 0.17 crore)] - -

Total Auditors' Remuneration 1.37 1.40

99



Professional fees include - Nil (previous year - Rs. 0.03 crore) paid to a firm in which partners of one of the audit firmsare partners. The above excludes Rs. 0.69 crore (previous year - Rs. 0.05 crore) paid to auditors for Other Services anddebited to the Securities Premium Account.

17. Derivative Instruments :

The Company uses forward exchange contracts, interest rate swaps, currency swaps and options to hedge itsexposure in foreign currency and interest rates. The information on derivative instruments is as follows:-

(a) Derivative Instruments outstanding:

Current Year Previous Year

Particulars Currency (USD million) Rs. crores (USD million) Rs. crores

Principal - only swaps INR/USD 22.73 100 22.73 100.00

Option Contracts INR/USD 30.00 153 - -

(b) Foreign currency exposure receivables (net), not covered by forward exchange contracts as at March 31, 2009- US$ 52.95 (previous year - US $ 41.2 million).

18. The Company has exercised the option granted vide notification F.No.17/33/2008/CL-V dated March 31, 2009, issuedby the Ministry of Corporate Affairs and, accordingly, the exchange differences arising on revaluation of long termforeign currency monetary items for the year ended March 31, 2008 and 2009 have been recognised over the shorterof the maturity period or March 31, 2011. The unamortised balance as at the year end is presented as "ForeignCurrency Monetary Item Translation Difference Account". Accordingly an amount of Rs. 3.82 crores has beenadjusted from the General Reserve and an aggregate amount of Rs. 11.63 crores has been deferred and recognised asan asset. Consequently, the profit of the current year is higher by Rs. 15.45 crores.

19. Employee Benefits:

(a) The Company has recognised the following amounts in the Profit and Loss Account under the head Company'sContribution to Provident Fund and Other Funds.-

Rs. crores


Provident Fund 13.89 12.18

Superannuation Fund 4.49 3.92

Total 18.38 16.10

(b) The Company operates post retirement defined benefit plans as follows :-

i. Funded :

� Post Retirement Gratuity

� Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categoriesof employees, which is funded by the Company and the employees.


100


ii. Unfunded :

� Pension to Executive Directors and Employees - Post retirement minimum guaranteed pensionscheme for certain retired executive directors and certain categories of employees, which is unfunded.

(c) Details of gratuity plan are as follows :-

i. Amount to be recognised in Balance Sheet and movement in net liability

Rs. crores


Present Value of Funded Obligations 94.22 74.80

Fair Value of Plan Assets (72.94) (73.34)

Net Liability recognised in the Balance Sheetand included under Provisions 21.28 1.46

ii. Expenses recognised in the Profit & Loss Account


Current Service Cost 4.90 4.40

Interest Cost 5.99 4.94

Expected return on Plan Assets (5.25) (4.38)

Actuarial Losses 23.21 2.67

Net gratuity expenses included in Payments to& Provision for Employees 28.85 7.63

Actual Return on Plan Assets (2.61) 10.32

iii. Reconciliation of Defined Benefit Obligation


Opening Defined Benefit Obligation 74.80 62.42



Actuarial Losses 15.33 8.61

Benefits Paid (6.80) (5.57)

Closing Defined Benefit Obligation 94.22 74.80

101



iv. Reconciliation of Fair Value of Plan Assets


Opening Fair Value of Plan Assets 73.34 60.84

Expected return on Plan Assets 5.25 4.38

Actuarial Losses (7.87) 5.94

Contributions by Employer 9.02 7.75


Closing Fair Value of Plan Assets 72.94 73.34

Expected Employer's contribution next year 10.00 2.00

v. Description of Plan Assets (Managed by the Insurance Company)


Government of India Securities 12% 17%

Corporate Bonds 59% 45%

Special Deposit Scheme 1 % 1%

Equity 15% 28%

Others 13% 9%

Grand Total 100% 100%

vi. Experience Adjustments

Rs crores

Particulars Year Ended March 31,

2005 2006 2007 2008 2009

Defined Benefit Obligation - 50.32 62.42 74.80 94.22

Plan Assets - 59.06 60.84 73.34 72.94

Surplus / (Deficit) - 8.74 (1.58) (1.46) (21.28)

Exp. Adj. on Plan Liabilities - - 11.87 9.26 9.06

Exp. Adj. on Plan Assets - - 0.93 5.94 (7.87)


102


vii Summary of Actuarial Assumptions


Discount Rate 7.00 % 7.85 %

Expected rate of return on Assets 7.50 % 7.50 %

Salary Escalation Rate 5.00 % 5.00 %

Attrition rate 1 - 2 % 1 - 2%

Mortality Published notes under the LIC(1994-96) mortality tables

(d) Details of unfunded post retirement defined benefit obligation are as follows :-

i. Reconciliation of Defined Benefit Obligation

Rs. crores





Actuarial (Gain) / Losses 2.73 (1.60)


Closing Defined Benefit Obligation 8.38 5.73


Rs. crores





Net expenses included in Payments to and 4.00 3.97Provision for Employees

103



iii. Experience Adjustments

Rs crores


2005 2006 2007 2008 2009

Defined Benefit Obligation - 2.53 6.82 5.73 8.38

Plan Assets - - - - -

Surplus / (Deficit) - (2.53) (6.82) (5.73) (8.38)

Exp. Adj. on Plan Liabilities - - 0.06 (1.70) 1.85

Exp. Adj. on Plan Assets - - - - -

iv. Summary of Actuarial Assumptions


Discount Rate 7.00% 7.85 %

Pension Increase Rate 4.00% 4.00%

Salary Escalation Rate 5.00% 5.00%

Attrition rate 1 - 2 % 1 - 2%

Mortality Published notes under the LIC(1994-96) mortality tables

(e) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising onthe above after allowing for employees contribution is determined as at March 31, 2009, under the basis ofuniform accrual benefit with demographic assumptions taken as Nil is as follows:

i). Amount to be recognised in Balance Sheet

Rs. crores


Present Value of Unfunded Obligation 3.44 3.04

Unrecognised Past Service Cost (2.66) (3.04)

Net Liability 0.78 -


104


ii). Expense to be recognised in the Profit & Loss Account

Rs. crores


Current Service Cost 0.11 -

Interest on Defined Benefit Obligation 0.24 -

Net Actuarial Losses / (Gains) recognised in Year 0.05 -

Past Service Cost 0.38 -

Total, Included in "Employee Benefit Expense" 0.78 -

iii). Reconciliation of Benefit Obligation & Plan Assets for the period

Rs. crores


Changed in Defined Benefit Obligation

Opening Defined Benefit Obligation 3.04 -

Unrecognised Past Service Cost - 3.04

Current Service Cost 0.11 -

Interest Cost 0.24 -

Actuarial Losses / (Gain) 0.05 -

Closing Defined Benefit Scheme 3.44 3.04

iv). Experience Adjustments

Rs crores


2005 2006 2007 2008 2009

Defined Benefit Obligation - - - 3.04 3.44

Surplus/ (Deficit) - - - (3.04) (3.44)

Exp. Adj. on Plan Liabilities - - - - (0.37)

105


v). Financial Assumption at the Valuation date

Rs. crores


Discount Rate 7.00 % 7.85 %

Expected rate of return on Assets 0.00 % 0.00 %


The past service liability is being amortised over the average vesting period of 8.02 years.

(f) Provident Fund

In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee Benefitsnotified by the Companies (Accounting Standards) Rules, 2006, employer established provident fund trusts aretreated as Defined Benefit Plans, since the Company is obligated to meet interest shortfall, if any, with respectto covered employees. According to the Management, the Actuary has opined that actuarial valuation cannotbe applied to reliably measure provident fund liabilities in the absences of guidance from the Actuarial Societyof India. Accordingly, the Company is currently not in a position to provide other related disclosures asrequired by the aforesaid AS 15 read with the Accounting Standards Board Guidance. However, having regardto the position of the Fund (for covered employees) and confirmation from the Trustees of such Fund, provisionhas been made for such shortfall as at the year-end.

The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority,promotions and other relevant factors. The above information has been certified by the actuary and has beenrelied upon by the Auditors.

20. As the turnover of the Company includes sale of food and beverages, it is not possible to give quantitative details ofthe turnover and food & beverages consumed. The Company has been exempted from giving these particulars videorder no. 46/20/2008-CL-III dated May 23, 2008, issued by the Department of Company Affairs,.

21. Consumption of raw material:

Rs. crores

Particulars Current % Previous %Year Year

Imported 7.99 6.98 5.91 4.61

Indigenous 106.55 93.02 122.33 95.39

Total 114.54 100.00 128.24 100.00



106

22. CIF Value of imports is as follows:

Rs. crores


Raw Materials (Food and Beverages) 5.96 7.52

Stores, Supplies and Spare Parts for Machinery 5.68 9.79

Capital Goods 45.60 28.59

23. Earnings in Foreign Exchange are as follows :

Rs. crores


(a) Royalty, Know-how, Professional and Consultation Fees - 7.64

(b) Interest - 0.60

(c) Sale of Rooms / F&B Income 627.16 802.30

The earnings in foreign exchange, as reported in 23 (c) above, are on the basis of actual receipts during the year, ascertified by the Management.

24. Expenditure in Foreign Exchange:

Rs. crores


Membership Fees 1.26 1.27

Advertising 20.82 19.05

Professional Consultancy Fees 7.51 5.49

Others 13.78 10.04

25. Remittance in Foreign Currencies for dividends to non-resident shareholders:

The Company has not remitted any amount in foreign currencies on account of dividends during the year and doesnot have information as to the extent to which remittances, if any, in foreign currencies on account of dividends havebeen made by/on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholdersduring the year, are as under:


107


Rs. crores


Year to which dividend relates 2007-08 2006-07

Numbers of non-resident shareholders 1,785 1,492

Number of Ordinary Shares held by non-resident shareholders 7,573,235 7,612,056

Gross amount of dividend (Rs. crores) 1.44 1.22

Net amount of dividend (Rs. crores) 1.44 1.22

26. The Company has an investment of Rs. 0.30 crore (previous year - Rs. 0.30 crore) and advances outstanding (includinginterest) of Rs. 9.42 crores (previous year - Rs. 9.42 crores) in a Joint Venture, Taj Karnataka Hotels and ResortsLimited (TKHRL). TKHRL has accumulated losses in excess of its paid-up capital and reserves. Considering theinherent value of TKHRL's assets, based on a valuation of the property and its proposed financial restructuring, forwhich the Company is in talks with the JV partner - the Government of Karnataka, the Management is of the view thatthere is no diminution, other than temporary, in the value of the investment and that the amount outstanding after thefinancial restructuring will be fully recovered.

27. The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriateregulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to theperiod prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company hasreplied to the notices and is waiting for the directorate to return its files, after which it will complete the replies.Adjudication proceedings are in progress.

28. Provision for Doubtful Debts :



Add : Provision during the year 2.98 2.40

13.30 13.87

Less : Bad debts written off 1.89 2.33

Less : Provision no longer required, written back 1.02 1.22


29. Provision for Loyalty Programmes :

The Company has loyalty programmes, which enable its customers to accumulate points based on their spends at thehotels. Such points can be encashed either by stay at the Company's hotels or by purchase of merchandise. Theestimated liability against the loyalty schemes is as under:



108

Rs. crores



Less : Redeemed during the year 0.90 0.77

10.06 8.05

Add : Provision during the year 2.51 2.91


30. Long Term Deposits and Loans and Advances in the nature of loans to Subsidiaries, Jointly controlled entities andAssociates:-

Rs. crores

Particulars Maximum Balance Maximum Balanceamount Outstanding amount Outstanding

outstanding as on March outstanding as onMarchduring the year 31, 2009 during the 31, 2008

previous

Subsidiaries

IHMS Inc. 346.79 195.64 212.11 212.11

Innovative Foods Limited 4.25 - 2.75 2.75

Residency Food & Beverages Limited 10.57 1.82 6.77 6.77

Taj International Hotels (HK) Ltd. 312.64 312.64 223.76 207.76

Roots Corporation Ltd. 12.00 - 16.00 12.00

Jointly Controlled Entities

IHMS Hotels (SA) (Proprietary) Ltd.(formerly known asTaj International Hotels(South Africa)(Pty) Ltd.) 15.92 14.62 15.86 13.35

Taj Karnataka Hotels & Resorts Ltd. 5.35 5.35 5.35 5.35

Taj Asia Ltd. 25.47 25.47 19.14 17.76

Taj GVK Hotels & Resorts Ltd. 5.00 5.00 5.00 5.00

Associates

Oriental Hotels Limited 25.00 12.00 - -

Taj Air Ltd. 24.5 24.5 - -


109


31. Investments made in the Equity Shares of the Company and its subsidiaries by a loanee as at March 31, 2009:

Rs. crores

Company Current PreviousYear Year

Oriental Hotels Ltd. 2.74 2.14

Piem Hotels Ltd. 6.80 1.42

32. Micro and Small Enterprises:

(a) There is no interest paid/payable during the year by the Company to the suppliers covered under Micro, Small,Medium Enterprises Development Act, 2006.

(b) The above information takes into account only those suppliers who have responded to the enquiries made bythe Company for this purpose.

33. Related Party disclosures:

(a) The names of the related parties of the Company are as under:

i) Subsidiary Companies

Name of the Company Country of Incorporation

DomesticTIFCO Holdings Ltd. (formerly Known asTaj Investment and Finance Company Ltd.) India

KTC Hotels Ltd. India

United Hotels Ltd. IndiaRoots Corporation Ltd. India

Taj SATS Air Catering Ltd. India

Residency Foods & Beverages Ltd. IndiaInnovative Foods Ltd. India

InternationalTaj International Hotels (H.K.) Ltd. Hong KongIHMS (HK) Ltd. Hong Kong

Chieftain Corporation NV Netherlands Antilles

IHOCO BV NetherlandsSt. James Court Hotels Ltd. United Kingdom

Taj International Hotels Ltd. United Kingdom

International Hotel Management Services Inc. United States of AmericaSamsara Properties Ltd. British Virgin Islands

IHMS (Australia) Pty. Ltd. Australia

IHMS (Restaurants) Pty. Ltd. AustraliaApex Hotel Management Services (Pte) Ltd. Singapore



110

ii) Jointly Controlled Entities


Domestic

Taj Madras Flight Kitchen Pvt. Ltd. India

Taj Karnataka Hotels & Resorts Ltd. India

Taj Kerala Hotels & Resorts Ltd. India

Taj GVK Hotels & Resorts Ltd. India

Taj Safaris Ltd. India

International

Taj Asia Ltd. Hong Kong

IHMS Hotels (SA) (Proprietary) Ltd. (formerly known asTaj International Hotels (South Africa)(Pty) Ltd.) South Africa

iii) Associates


Domestic

Benares Hotels Ltd. India

Taj Air Ltd. India

Piem Hotels Ltd. India

Taj Trade and Transport Ltd. India

Taj Enterprises Ltd. India

Inditravel Pvt. Ltd. India

Oriental Hotels Ltd. India

Taj Madurai Ltd. India

Taida Trading & Industries Ltd. India

Ideal Ice & Cold Storage Co. Ltd. India

International

Taj Lanka Resorts Ltd. Sri Lanka

Taj Lanka Hotels Ltd. Sri Lanka

BJETS Pte Ltd., Singapore Singapore


111


Key managerial personnel comprise whole-time directors, who have the authority and responsibility for planning,directing and controlling the activities of the Company. The remuneration paid to such directors is disclosed inNote 13 on Page 97 and the dues from such persons are disclosed in footnotes 1 and 2 (i) of Schedule 8 CurrentAssets, Loans and Advances, forming part of the Balance Sheet. Presently Mr. Raymond N Bickson, theManaging Director, Mr. Anil P. Goel, the Executive Director - Finance and Mr. Abhijit Mukerji, the ExecutiveDirector - Hotel Operations are the Key Management Personnel.

(b) The details of transactions with related parties are as follows:

Rs. crores

Particulars Subsidiaries Associates Joint VenturesCurrent Previous Current Previous Current Previous

Year Year Year Year Year Year

Interest paid / provided 0.61 0.68 0.21 0.96 - -

Interest received/accrued 1.97 1.54 2.93 0.72 1.04 0.89

Dividend received 6.51 4.75 8.75 4.38 7.50 5.00

Operating / Licence fees paid 0.53 0.43 0.15 - - -

Operating fees received 6.21 8.95 47.64 48.55 23.91 28.05

Purchase of goods and services 0.59 0.49 45.63 35.36 0.20 0.36

Sale of goods and services 0.57 0.75 5.00 4.59 0.98 1.03

Due from/(to) on Current Account 12.54 4.75 0.91 (3.11) 1.09 1.56

Purchase of Shares 474.19 12.50 102.59 - 1.25 2.81

Sundry Debtors 4.69 5.99 13.04 8.31 13.53 15.70

Deposits (Net) 513.21 428.36 36.50 (28.00) 50.45 41.47

(c) Statement of Material Transactions

Rs. crores

Name of Company Current PreviousYear Year

Subsidiaries

TIFCO Holdings Ltd. (formerly known asTaj Investment and Finance Co. Ltd.

- ICDs raised 15.90 22.00

- ICDs repaid 29.95 7.95

- ICDs encashed - 17.00

- Interest paid 0.60 0.68

- Interest received - 0.60

- Deposits taken - 14.05



112

KTC Hotels Limited

- Licence Fees paid 0.53 0.43

- ICDs raised 0.41 -

- Due to - Current Account 2.45 2.10

United Hotels Ltd.

- Dividend received 2.52 0.76

- Operating fees received 3.20 3.51

Taj SATS Air Catering Ltd.


- Due from - Current Account 1.68 2.47

Roots Corporation Ltd.

- Purchase of shares - 12.50

- ICDs placed 41.00 24.50

- ICDs encashed 53.00 23.50

- Interest received 0.96 0.64

- Sundry Debtors 1.90 3.61

Taj International Hotels (HK) Ltd.

- ICD/Shareholder's Deposit 312.65 205.53

- Purchase of shares 109.11 -

- Due from - Current Account 8.15 -

- ICDs placed 157.48 -

International Hotel Management Services Inc.



- Deposits given outstanding 195.65 212.11


- ICDs encashed 365.08 -



113


IHMS (Australia) Pty. Ltd.


Residency Food & Beverages Ltd.

- Interest received 0.68 -


Associates

Taj Air Ltd.


- Purchase of Goods & Services 24.06 4.78


- ICDs encashed 17.50 29.00

Piem Hotels Ltd.

- Dividend received 4.41 -

- Operating Fees received 27.11 27.89



- ICDs raised - 39.50




- Sale of Goods & Services 1.76 1.92

- Deposits taken - 18.00

Taj Trade & Transport Ltd.


- Licence Fees Paid 0.12 -

Inditravel Pvt. Ltd.

- Purchase of Goods & Services 19.02 27.43





114

Oriental Hotels Ltd.




- ICDs raised - 36.00



- Interest received 1.04 -

- Due to - Current Account (0.15) 0.33



- Deposits taken 5.00 10.00

- Deposits Repaid 15.00 -

BJETS Pte Ltd.


Jointly Controlled Entities

Taj Madras Flight Kitchen Pvt. Ltd.


Taj GVK Hotels & Resorts Ltd.





Taj Asia Ltd.


- Sundry Debtors 3.34 -



115


34. In compliance with Accounting Standard 27 - 'Financial Reporting of Interests in Joint Ventures' - (AS-27), notified bythe Companies (Accounting Standards) Rules, 2006, the Company has interests in the following jointly controlledentities:

Rs. crores

Name of the Company County of Holding Amount of Interest based on the LastIncorporation (%) Audited Accounts for the year

ended March 31, 2009

Assets Liabilities Income Expenditure Contingent Capital

Taj Safaris Ltd.* India 33.33 7.27 4.34 2.37 4.44 0.12 0.12

(33.33) (5.38) (1.66) (2.10) (2.98) (0.06) (1.26)

Taj GVK Hotels and Resorts Ltd. India 25.52 108.02 38.86 60.79 39.66 2.91 2.59

(25.52) (80.72) (21.28) (66.11) (38.48) (4.59) (6.92)

Taj Karnataka Hotels and 40.00 2.85 5.61 1.57 1.62 - 0.02Resorts Ltd. India (40.00) (2.58) (5.73) (1.68) (1.67) - -

Taj Kerala Hotels Ltd. India 28.30 15.49 0.14 9.78 8.57 0.58 0.51

(28.30) (13.70) (0.74) (11.42) (9.33) (0.33) (0.28)

Taj Madras Flight Kitchen India 50.00 18.84 0.90 21.48 15.93 5.61 0.31Pvt. Ltd.

(50.00) (17.63) (0.98) (23.88) (15.93) (0.22) (0.34)

Taj Asia Ltd. Hong Kong 26.66 103.06 46.86 32.80 33.43 13.59 0.11

(26.66) (77.19) (35.50) (41.17) (31.49) (10.68) (0.01)

IHMS Hotels (SA)(Proprietary) Ltd.(formerly known asTaj International Hotels(South Africa)(Pty) Ltd.). South Africa 50.00 39.81 38.08 2.08 0.16 - 20.94

(50.00) (13.92) (14.07) (0.03) (0.07) - -

* Based on Unaudited financial statements.

Note : Figures in the brackets relate to the previous year.

35. The Company's only business is hoteliering and hence disclosure of segment-wise information is not applicableunder Accounting Standard 17 - 'Segmental Information' (AS-17) notified by the Company's (Accounting Standards)Rules, 2006. There is no geographical segment to be reported since all the operations are undertaken in India.



116

36. Earnings Per Share (EPS) :

Earnings Per Share is calculated in accordance with Accounting Standard 20 - 'Earnings Per Share' - (AS-20), notifiedby the Company's (Accounting Standards) Rules, 2006.


Profit after tax - (Rs. crores) 234.03 377.46

No of Equity Shares - Basic and Diluted 71,35,64,442 65,43,30,117

Earnings Per Share - (In Rupees)Basic and Diluted 3.28 5.77

Note: Since the exercise price of the Warrants Option issued by the Company is more than the fair value of the EquityShares, these have not been considered for the calculation of Diluted Earnings per share being anti-dilutive in natureas at the year end.

37. Previous year's figures have been regrouped, wherever necessary, to conform to the current year's presentation.

For and on behalf of the Board

R.N. TATA Chairman

R.K. KRISHNA KUMAR Vice Chairman

RAYMOND N. BICKSON Managing Director

ANIL P. GOEL Executive Director - Finance

ABHIJIT MUKERJI Executive Director - Hotel Operations

N.A. SOONAWALA Director

S. K. KANDHARI Director

JAGDISH CAPOOR Director

SHAPOOR MISTRY Director

ARNAVAZ AGA Director

NADIR GODREJ Director

SANKER PARAMESWARAN Vice President - Legal & Company Secretary



117


Information Pursuant to Part IV of Schedule VI of the Companies Act,1956Balance Sheet Abstract and Company’s General Profile

Registration Details

Registration No. 183 State Code : 11

Balance Sheet Date 31 03 09

Capital Raised during the year ( Amount in Rs. Thousands)

Public Issue Rights Issue

Nil 120,554

Bonus Issue Private Placement

Nil Nil

Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

49,845,640 49,845,640

Sources of Funds

Paid-up Capital Reserves & Surplus

723,405 29,752,858

Secured Loans Unsecured Loans

15,980,238 1,684,460

Deferred Tax Liability Trade Deposits

1,469,400 235,278

Application of Funds

Net Fixed Assets Investments

18,004,908 20,268,801

Long Term Deposits Net Current Assets

6,777,840 4,670,500

Misc. Expenditure Accumulated Losses

123,591 Nil

Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure

17,065,234 13,380,246

+ / - Profit / Loss before Tax + / - Profit / Loss after Tax

+ 3,684,988 + 2,340,189

Earnings Per Share in Rs. (Basic) Dividend Rate %

3.28 120

Earnings Per Share in Rs. (Diluted)

3.28

Generic Names of Principal Product / Services of the Company ( as per monetary terms )

Product Description Item Code No. (ITC Code)

Hoteliering & Catering Not Applicable


118

Statement Pursuant To Section 212 Of The Companies Act, 1956

TIFCO KTC Hotels United Taj SATS Roots Residency Innovative Taj ChieftanHoldings Ltd Ltd Hotels Ltd Aircatering Corporation Food and Foods Ltd International Corporation

Ltd Ltd Ltd Beverages Ltd Hotels Hotels (H.K) NVLtd.

1 The Financial Year of the Company 31st March 31st March 31st March 31st March 31st March 31st March 31st March 31st March 31st Marchends on : 2009 2009 2009 2009 2009 2009 2009 2009 2009

2 Fully paid-up shares held by IHCL in theSubsidiary Company or by SubsidiaryCompany in the Sub-subsidiary Companyat the end of the Financial Year of theSubsidiary or Sub-subsidiary Companyas the case may be

a) Number 81,500,000 6,04,000 4,620,000 8,874,000 51,000,000 18,750,000 7,886,423 26,755,000 9,923

Equity Equity Equity Equity Equity Equity Equity Equity Equity

Shares of Shares of Shares of Shares of Shares of Shares of Shares of Shares of Shares of

Rs. 10/- each Rs. 10/- each Rs. 10/- each Rs. 10/- each Rs. 10/- each Rs. 10/- each Rs. 10/- each US$ 1 each UK£ 1 each

fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up

b) Extent of holding 100.00% 100.00% 55.00% 51.00% 100.00% 98.68% 67.94% 100.00% 100.00%

3 Changes in the interest of the Company Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Notor the Subsidiary Company between the Arise Arise Arise Arise Arise Arise Arise Arise Ariseend of the Financial Year of the SubsidiaryCompany or Sub-subsidiary Company and31st March, 2009Number of Shares acquired

4 The net aggregate of Profit of theSubsidiary Company/Sub-subsidiaryCompany so far as they concern theMembers of the Company

a) Dealt with in the accounts of the Company Nil Nil Nil 39,933,000 Nil Nil Nil Nil Nilfor the year ended 31st March, 2009

b) Not dealt with in the accounts of the Rs. Rs. Rs. Rs. Rs. Rs. Rs. US$ UK£Company for the year ended31st March, 2009 169,859,000 4,254,550 55,072,841 49,391,970 (223,105,000) (1,377,367) (33,312,732) (1,517,464) (96,276)

5 The net aggregate of profits/(losses) of theSubsidiary/Sub-subsidiary Company forprevious financial years, so far as theyconcern the Members of the Company

a) Dealt with in the accounts of the Company Nil Nil 46,200,000 13,311,000 Nil Nil Nil Nil Nilfor the year ended 31st March, 2009

b) Not dealt with in the accounts of the Rs. Rs. Rs. Rs. Rs. Rs. Rs. US$ UK£

Company for the year ended 31st March,

31st March, 2009 732,951,000 14,772,524 31,924,789 888,377,160 (224,358,000) (50,603,583) (38,049,131) 3,862,797 (603,925)

6 Material changes between the end of theFinancial Year of the Subsidiary or Sub-subsidiary Company as the case may beand 31st March, 2009

a) Fixed Assets

b) Investments

c) Moneys lent by the Subsidiary Company

d) Moneys borrowed by the Subsidiary Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Not

Company other than for meeting Current Arise Arise Arise Arise Arise Arise Arise Arise Arise

119


IHOCO B.V. ST. James Taj IHMS INC. Samsara IHMS (AUS) IHMS (REST) Apex Hotel Court Hotel International Properties Ltd Pty Ltd. Pty Ltd. Management.

Hotel Ltd. (U.K.) Services Pte.

1 The Financial Year of the Company 31st March 31st March 31st March 31st March 31st March 31st March 31st March 31st Marchends on : 2009 2009 2009 2009 2009 2009 2009 2009

2 Fully paid-up shares held by IHCL in theSubsidiary Company or by SubsidiaryCompany in the Sub-subsidiary Companyat the end of the Financial Year of theSubsidiary or Sub-subsidiary Companyas the case may be

a) Number 41,000 30,527,912 2 100 20,001,000 5,000,000 1 2

Equity Equity Equity Equity Equity Equity Equity EquityShares of Shares of Shares of Shares of Shares of Shares of Shares of Shares of

DFL 100 each UK£ 1 each UK£ 1 each US$ 1 each US$ 1 each AUD$ 1 each AUD$ 1 each S$fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up fully paid-up

b) Extent of holding 100.00% * 54.01% # 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

3 Changes in the interest of the Company Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Notor the Subsidiary Company between the Arise Arise Arise Arise Arise Arise Arise Ariseend of the Financial Year of the SubsidiaryCompany or Sub-subsidiary Company and31st March, 2009Number of Shares acquired

4 The net aggregate of Profit of theSubsidiary Company/Sub-subsidiaryCompany so far as they concern theMembers of the Company

a) Dealt with in the accounts of the Company Nil Nil Nil Nil Nil Nil Nil Nilfor the year ended 31st March, 2009

b) Not dealt with in the accounts of the EUR UK£ UK£ US$ US$ AUD$ AUD$ S$Company for the year ended31st March, 2009 (25,317) 730,636 121,560 (29,455,996) (17,432,897) (1,658,440) 48,453 -

5 The net aggregate of profits/(losses) of theSubsidiary/Sub-subsidiary Company forprevious financial years, so far as theyconcern the Members of the Company

a) Dealt with in the accounts of the Company Nil Nil Nil Nil Nil Nil Nil Nilfor the year ended 31st March, 2009

b) Not dealt with in the accounts of the EUR UK£ UK£ US$ US $ AUD$ AUD$ S$Company for the year ended 31st March,31st March, 2009 9,978,059 (6,383,667) 1,670,332 (43,572,218) (10,314,267) (14,161,338) (50,106) Nil

6 Material changes between the end of theFinancial Year of the Subsidiary or Sub-subsidiary Company as the case may beand 31st March, 2009a) Fixed Assetsb) Investmentsc) Moneys lent by the Subsidiary Companyd) Moneys borrowed by the Subsidiary Does Not Does Not Does Not Does Not Does Not Does Not Does Not Does Not

Company other than for meeting Current Arise Arise Arise Arise Arise Arise Arise AriseLiabilities

Statement Pursuant To Section 212 Of The Companies Act, 1956 (Contd.)

* Indirect holding as per Hong Kong Law For and on behalf of the Board

# Inclusive of indirect holding of 21.23% as per Hong Kong Law R. N. TATA ChairmanR. K. KRISHNA KUMAR Vice - ChairmanRAYMOND N. BICKSON Managing DirectorANIL P. GOEL Executive Director - FinanceABHIJIT MUKERJI Executive Director - Hotel

OperationsN. A. SOONAWALAS. K. KANDHARIJAGDISH CAPOOR DirectorsSHAPOOR MISTRYARNAVAZ AGANADIR GODREJ


}


120

Sum

mar

y of

Fin

anci

al In

form

atio

n of

Sub

sidi

ary

Com

pani

esR

s. C

rore

s

Nam

e of S

ubsid

iary

TIFC

OKT

CUn

ited

Roots

Taj

Res

idenc

yIn

no-

Apex

Taj

St. J

ames

Chief

tain

IHOC

OIH

MS

Taj

Intern

a-Int

erna-

Sams

araHo

lding

sHo

tels

Hotel

sCo

rpo-

SATS

Foo

dva

tive

Hotel

Intern

at-Co

urt

Corp

o- B

V(R

estau

- In

terna

-tio

nal

tiona

lPr

opert

iesLt

d. L

td.

Ltd

. ra

tion

Air-

and

Food

sM

anag

-ion

alHo

tels

ration

rants)

tiona

lHo

telHo

telLt

d.Lt

d. ca

tering

Beve

rages

Ltd

.em

ent

(H.K

.) L

td.

NV

Pty L

td.

Hotel

sM

anag

e-M

anag

e-Lt

d.

Ltd.

Servi

ces

Ltd

.Lt

d.me

ntme

ntPT

E ltd

Servi

ces

Serv

iceInc

.Au

strali

a

Fund

s Em

ploy

ed

Capit

al81

.50

0.60

8.40

191.

0017

.40

19.3

011

.61

0.00

254.

7541

1.86

0.07

12.5

50.

000.

0091

4.55

17.8

310

1.91

Reser

ves

90.2

81.

9024

.33

(44.7

5)18

5.15

(5.16

)(1

0.50)

-11

.95

(76.2

6)84

.09

78.8

1(0

.01)

13.0

6(3

72.08

)(5

6.41)

(141

.37)

Liab

ilities

--

Secu

red Lo

ans

--

-99

.13

21.0

0-

7.85

--

--

--

-29

0.42

37.2

576

4.25

Unse

cured

Loan

s-

3.50

--

-18

.27

7.23

-47

2.53

--

--

-20

3.35

-70

6.67

Defer

red Ta

x Liab

ility

-0.8

0-

-7.3

8-

--

--

--

-0.1

4-

--

Total

Liab

ilitie

s-

4.30

-99

.13

28.3

818

.27

15.0

8-

472.

53-

--

-0.

1449

3.77

37.2

51,

470.

92

Total

Fund

s Em

ploy

ed17

1.78

6.80

32.7

324

5.38

230.

9332

.41

16.1

90.

0073

9.23

335.

6084

.16

91.3

6(0

.01)

13.1

91,

036.

24(1

.34)

1,43

1.45

Appli

catio

n of F

unds

Asset

s

Fixe

d Asse

ts (In

cludin

g CW

IP)

1.05

3.64

6.09

221.

4321

7.85

0.09

10.8

30.

0299

.74

663.

64-

--

12.1

71,

594.

7860

.54

-

Inve

stmen

ts12

9.11

-6.

26-

-18

.01

0.30

-57

4.50

-89

.25

89.2

4-

--

-1,

279.

49

Long

Term

Dep

osits

--

-2.9

0-

--

--

--

--

--

--

Net C

urren

t Asse

ts41

.62

3.16

20.0

121

.05

13.0

814

.31

5.06

(0.02

)64

.99

(328

.03)

(5.09

)2.1

2(0

.01)

1.02

(572

.78)

(61.8

7)15

1.96

Defer

red Ta

x Asse

ts-

-0.3

7-

--

--

--

--

--

--

-

Misc

ellan

eous

Exp

endit

ure

(to th

e exte

nt no

t writ

ten of

f)-

--

--

--

--

--

--

-14

.25

--

Total

Asse

ts (N

et)17

1.78

6.80

32.7

324

5.38

230.

9332

.41

16.1

90.

0073

9.23

335.

6084

.16

91.3

6(0

.01)

13.1

91,

036.

24(1

.34)

1,43

1.45

T otal

Inco

me

17.5

70.

5436

.36

38.8

320

8.27

33.5

226

.93

1.99

23.5

619

2.80

-0.

000.

1846

.45

346.

5533

.33

3.10

Prof

it Befo

re Ta

xatio

n17

.46

0.47

15.4

6(2

2.11)

27.3

8(0

.13)

(4.84

)0.0

1(7

.73)

9.84

(0.70

)(0

.14)

0.17

1.39

(150

.05)

(5.91

)(8

8.82)

Prov

ision

for T

axati

on0.5

10.0

45.4

50.2

09.8

70.0

10.0

60.0

1-

(0.02

)-

0.03

-0.5

10.0

3-

-

Prof

it Afte

r Tax

ation

16.9

50.

4310

.01

(22.3

1)17

.51

(0.14

)(4

.90)

-(7

.73)

9.86

(0.70

)(0

.17)

-0.8

9(1

50.08

)(5

.91)

(88.8

2)

Prop

osed

/ Inte

rim D

ivide

nd-

--

-7.8

3-

--

--

--

--

--

-

121


Financial Statistics(Rs. Crores)

CAPITAL ACCOUNTS REVENUE ACCOUNTS

Year Share Reserves Borrow- Gross Net Invest- Gross Expen Depre- Profit Tax Profit Net Divi Rate ofCapital and ing Block Block ment Revenue diture ciation before Prov. after Transfer dend Dividend

Surplus (Including Taxes Taxes to onInterest Reserves Ordinary

Shares %

1972-73 2.35 0.76 5.38 10.06 8.12 0.02 4.35 3.50 0.45 0.40 0.04 0.44 0.29 0.16 6.00

1973-74 2.35 1.12 5.32 10.58 8.14 0.16 5.82 4.82 0.50 0.50 0.01 0.51 0.35 0.17 6.40

1974-75 2.35 1.94 4.55 10.99 8.09 0.20 7.26 5.79 0.49 0.98 0.00 0.98 3.61 0.37 18.00

1975-76 2.35 2.21 4.21 11.82 8.42 0.20 8.61 6.73 0.50 1.38 0.33 1.05 0.64 0.41 20.00

1976-77 3.07 2.38 3.98 12.21 8.30 0.25 10.77 8.45 0.52 1.80 0.75 1.05 0.49 0.56 20.00

1977-78 3.07 3.39 4.73 13.14 8.69 0.34 13.92 9.76 0.53 3.63 1.94 1.69 1.01 0.68 25.00

1978-79 3.07 5.41 6.17 17.81 12.68 0.55 18.42 13.63 0.69 4.10 1.40 2.70 2.02 0.68 25.00

1979-80 5.09 5.58 5.56 20.48 14.31 0.74 26.49 18.59 1.04 6.86 3.63 3.23 2.18 1.05 25.00

1980-81 5.01 8.53 7.76 25.01 17.60 1.10 31.54 23.13 1.24 7.17 3.17 4.00 2.95 1.45 22.00

1981-82 6.90 9.20 8.87 28.79 20.06 1.13 36.09 26.72 1.33 8.04- 4.10 3.94 2.49 1.45 22.00

1982-83 6.35 12.34 26.71 49.54 39.22 2.65 42.98 36.87 1.62 4.49 0.00 4.49 2.99 1.50 23.00

1983-84 6.35 17.45 32.25 58.48 44.40 3.77 54.69 43.79 3.80 7.10 0.40 6.70 5.11 1.59 25.00

1984-85 6.35 22.23 42.20 67.77 44.55 11.70 65.50 55.39 2.66 7.45 1.08 6.37 4.78 1.59 25.00

1985-86 7.85 28.70 38.82 71.69 53.72 6.21 78.48 69.32 3.44 7.66 1.60 6.06 4.22 1.84 25.00

1986-87 7.85 32.73 53.58 89.73 67.56 5.53 93.05 79.68 4.25 9.12 2.75 6.37 4.02 2.35 30.00

1987-88 9.86 41.97 63.47 107.70 80.08 6.90 105.69 90.98 5.55 9.16 2.40 6.76 4.23 2.53 30.00

1988-89 9.86 48.54 74.06 127.39 93.56 9.34 117.72 100.61 6.24 10.87 1.50 9.37 6.42 2.96 30.00

1989-90 14.78 51.44 97.13 161.28 119.95 11.19 141.50 120.93 7.80 12.77 1.25 11.52 7.83 3.70 25.00

1990-91 14.78 56.77 121.07 178.61 128.43 12.37 159.11 139.42 9.11 10.58 1.55 9.03 5.33 3.70 25.00

1991-92 14.78 73.72 123.53 194.44 135.89 13.76 206.79 169.52 8.85 27.58 6.50 21.08 16.75 5.17 35.00

1992-93 19.96 124.44 106.86 210.68 142.53 16.93 239.21 188.24 9.77 41.20 9.00 32.20 24.86 8.68 50.00

1993-94 19.96 165.65 100.86 234.64 156.21 32.54 301.92 223.49 10.90 67.53 15.50 52.03 41.21 13.97 70.00

1994-95 39.92 205.84 245.05 293.59 201.92 36.04 381.88 263.20 13.67 105.11 23.00 82.11 60.15 21.96 55.00

1995-96 45.12 567.16 200.18 384.01 273.21 142.09 547.42 347.42 20.37 179.57 39.00 140.57 107.10 33.47 75.00

1996-97 45.12 671.86 219.75 500.10 364.08 214.80 613.33 405.67 27.18 180.48 33.60 146.48 104.70 38.35 85.00

1997-98 45.12 767.68 197.31 581.48 414.57 218.09 623.91 427.53 32.42 163.96 26.00 137.96 95.78 38.35 85.00

1998-99 45.12 844.35 178.42 665.67 466.77 259.09 623.34 435.36 33.84 154.14 35.00 119.14 76.57 38.35 85.00

1999-00 45.12 913.96 432.32 842.01 606.86 337.75 650.91 482.49 37.69 130.73 17.50 113.23 70.66 38.35 85.00

2000-01 45.12 980.10 555.31 942.16 665.06 422.13 742.92 560.47 45.16 137.29 20.50 116.79 67.07 45.12 100.00

2001-02 45.12 844.13 809.21 946.15 655.08 541.34 617.55 589.81 47.49 98.14 17.44 80.70 40.00 36.09 80.00

2002-03 45.12 842.17 799.50 985.71 677.77 571.64 609.91 575.43 39.98 53.80 13.72 40.48 7.50 31.58 70.00

2003-04 45.12 844.79 1412.46 1159.69 813.13 600.83 727.09 646.89 48.58 80.20 19.55 60.65 8.57 36.09 80.00

2004-05 50.25 1081.80 1052.03 1290.70 885.20 607.01 896.23 754.55 56.77 141.68 35.82 105.86 11.00 50.25 100.00

2005-06 58.41 1657.83 544.34 1308.34 843.01 656.57 1154.80 890.90 65.90 272.00 88.22 183.78 20.00 77.95 130.00

2006-07 60.29 1738.39 943.94 2014.34 1360.05 962.81 1618.83 1146.47 91.44 474.64 152.25 322.39 35.00 96.46 160.00

2007-08 60.29 1956.29 1134.18 2072.16 1371.60 977.58 1823.16 1254.11 85.48 580.47 203.01 377.46 38.00 114.54 190.00

2008-09 72.34 2975.29 1766.47 2362.23 1585.40 2026.88 1706.52 1348.42 94.46 362.30 128.27 234.03 30.00 86.81 120.00


122

AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS OF

THE INDIAN HOTELS COMPANY LIMITED

ON THE CONSOLIDATED FINANCIAL STATEMENTS

1. We have audited the attached Consolidated Balance Sheet of THE INDIAN HOTELS COMPANY LIMITED ("the

Company"), its subsidiaries and jointly controlled entities, (the Company, its subsidiaries and jointly controlledentities together constitute "the Group") as at March 31, 2009, the Consolidated Profit and Loss Account and the

Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. The Consolidated

Financial Statements include investments in associates, accounted for on the equity method in accordance withAccounting Standard 23 (Accounting for Investments in Associates in Consolidated Financial Statements) (AS 23)

and financial statements of the jointly controlled entities accounted for in accordance with Accounting Standard 27

(Financial Reporting of Interests in Joint Ventures) (AS 27) as notified by the Companies (Accounting Standards)Rules, 2006. These financial statements are the responsibility of the Company's Management. Our responsibility is to

express an opinion on these Consolidated Financial Statements based on our audit.

2. We conducted our audit in accordance with the generally accepted auditing standards in India. These Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the

disclosures in the financial statements. An audit also includes assessing the accounting principles used and thesignificant estimates made by the Management, as well as evaluating the overall financial statements presentation.

We believe that our audit provides a reasonable basis for our opinion.

3. (i) We did not audit the financial statements of sixteen subsidiaries and three jointly controlled entities whosefinancial statements reflect total assets (net) of Rs. 3,077.61 crores as at 31st March, 2009, total revenues of Rs.

734.38 crores and net cash flows amounting to Rs. 68.43 crores for the year then ended as considered in the

Consolidated Financial Statements. We have also not audited the accounts of any of the associates, whichreflect the Group's share of profit (net) for the year amounting to Rs. 49.97 crores as considered in the Consolidated

Financial Statements. These financial statements have been audited by other auditors, whose reports have

been furnished to us and our opinion, in so far as it relates to the amounts included in respect of thesesubsidiaries, jointly controlled entities and associates, is based solely on their reports.

(ii) The Consolidated Financial Statements include the unaudited financial statements of a jointly controlled entity

having total assets (net) of Rs. 94.61 crores as at 31st March, 2009, total revenues of Rs. 32.80 crores and cashflows amounting to Rs. 12.42 crores for the year then ended, as considered in the Consolidated Financial

Statements. The Consolidated Financial Statements also include the Group's share of loss of an associate for

the year, amounting to Rs. 24.48 crores as considered in the Consolidated Financial Statements. The financialstatements of these entities have not been audited but have been certified by the Management.

4. (i) We report that the Consolidated Financial Statements have been prepared in accordance with the requirements

of Accounting Standard 21, (Consolidated Financial Statements), AS 23 and AS 27 as notified by the Companies(Accounting Standards) Rules, 2006 and on the basis of the separate audited/unaudited financial statements of

123


the Company, its subsidiaries, jointly controlled entities and associates included in the Consolidated Financial

Statements, referred to in paragraph 3 above.

(ii) Based on our audit and on consideration of the separate audit reports on individual financial statements of the

Company, its aforesaid subsidiaries, jointly controlled entities and associates referred to in paragraph 3 (i)

above and to the best of our information and according to the explanations given to us, we are of the opinionthat the aforesaid Consolidated Financial Statements, subject to our comments in paragraph 3 (ii) above regarding

a jointly controlled entity and an associate whose accounts have not been audited, give a true and fair view in

conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2009;

(b) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on

that date and

(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended

on that date.

For DELOITTE HASKINS & SELLSChartered Accountants

Nalin M. ShahPartner(Membership No.15860)MUMBAI, 26th June, 2009


124

Consolidated Balance Sheet as at March 31, 2009March 31, 2008


SOURCES OF FUNDSShareholders' Funds

Share Capital 1 72.34 60.29Share Application Money - 19.97Reserves and Surplus 2 3,105.55 2,188.83Preference shares issued by a subsidiary (Refer Note 6, Page 147 ) 120.00 -Total 3,297.89 2,269.09

Minority Interest 274.11 282.01Loan FundsSecured Loans 3 2,659.60 1,631.57Unsecured Loans 4 1,987.28 1,835.26Total 4,646.88 3,466.83

Long Term Trade Deposits 23.80 23.63Deferred Tax Liabilities (Refer Note 10 (b), Page 148 ) 160.52 148.88

8,403.20 6,190.44APPLICATION OF FUNDS

Fixed Assets 5Gross Block 5,392.38 4,646.45Less : Depreciation 1,304.08 1,132.08Net Block 4,088.30 3,514.37Capital work-in-progress 727.27 435.17Total 4,815.57 3,949.54

Goodwill on consolidation 361.15 297.03Investments 6 2,407.68 1,541.94Long Term Deposits for Hotel Properties 174.99 165.71"Foreign Currency Monetary Item Translation Difference Account 11.63 -“(Refer Note 18, Page 154 )"Deferred Tax Assets (Refer Note 10(c), Page 148 ) 0.37 0.35Current Assets, Loans and Advances 7

Inventories 64.10 53.33Sundry Debtors 177.77 207.91Cash and Bank Balances 252.84 257.60Loans and Advances 886.48 366.20

1,381.19 885.04Less: Current Liabilities and Provisions 8

Liabilities 555.55 572.20Provisions 201.47 86.12

757.02 658.32Net Current Assets 624.17 226.72Miscellaneous Expenditure (to the extent not adjusted or written off) 9 7.64 9.15

8,403.20 6,190.44The accompanying notes form an integral part of the Balance Sheet 12

As per our report attached.


Nalin M. ShahPartner



Raymond N. Bickson Managing Director

Anil P. Goel Executive Director - Finance


125


Consolidated Profit and Loss Account for the year ended March 31, 2009Previous Year


INCOMERooms, Restaurants, Banquets and Other Income 10 2,756.63 3,012.62

EXPENDITUREOperating and General Expenses 11 2,196.92 2,046.90Depreciation 188.53 167.62Interest (net) (Refer Note 15, Page 153) 230.46 202.32Total 2,615.91 2,416.84Less : Unallocated Expenditure during construction periodtransferred to Fixed Assets 22.55 18.90

2,593.36 2,397.94PROFIT BEFORE EXCEPTIONAL ITEM AND TAX 163.27 614.68

Less : Exceptional item (Refer Note 3 (b) & 3 (c), Page 147 ) 6.79 54.16Add : Profit on sale of a hotel property (Refer Note 7, Page 147 ) 2.03 -

PROFIT BEFORE TAX 158.51 560.52Less : Provision for Tax (Refer Note 10(a), Page 148) 151.97 242.63Less : Short Provision of Tax of earlier years (Net) 3.80 4.35

PROFIT AFTER TAX 2.74 313.54Less : Profit attributable to minority interest (net) 15.77 22.74Add : Share of Profits of Associates (Net) 25.49 64.18

PROFIT AFTER MINORITY INTEREST AND SHARE 12.46 354.98OF PROFIT OF ASSOCIATES

Add : Balance brought forward from previous year 680.17 497.20AMOUNT AVAILABLE FOR APPROPRIATION 692.63 852.18

Appropriation :Interim Dividend - 114.54Tax on Interim Dividend - 19.47Proposed Dividend 86.81 -Tax on Dividend 14.75 -Transfer to Debenture Redemption Reserve 100.00 -Transferred to General Reserve 30.00 38.00Balance carried forward 461.07 680.17

692.63 852.18Earnings Per Share before Exceptional Item - (In Rupees)(Refer Note 26, Page 164)

Basic & Diluted 0.17 5.43Face Value per equity share - (In Rupees) 1.00 1.00

The accompanying notes form an integral part of the 12Profit and Loss Account










126

Consolidated Cash Flow Statement for the year ended March 31, 2009Previous Year

Rupees Rupees Rupees Rupeescrores crores crores crores

Cash Flow From Operating ActivitiesNet Profit Before Tax 158.51 560.52Adjustments For :Depreciation 188.53 167.62Amortisation of VRS Expenditure 0.30 1.36Profit on sale of investments (0.04) (39.12)Profit on sale of a hotel property (2.03) -(Profit) / Loss on sale of assets disposed / discarded (2.71) 8.54Provision for Doubtful Debts and advances 4.50 4.46Dividend Income (48.74) (7.55)Interest (Net) 230.46 202.32Unrealised Exchange Loss / (Gain) on financing activities 20.90 (15.03)Provision for Loyalty Programmes (net of Redemptions) 1.61 2.14Provision for contingencies 0.20 -Provision for Employee Benefits 11.09 2.63

404.07 327.37Cash Operating Profit before working capital changes 562.58 887.89Adjustments For :Trade and Other Receivables (71.47) (26.30)Inventories (9.22) (8.99)Trade Payables 48.50 (25.82)

(32.19) (61.11)Cash Generated from Operating activities 530.39 826.78Direct Taxes Paid (191.42) (246.93)

Net Cash From Operating Activities 338.97 579.85

Cash Flow From Investing ActivitiesPurchase of Fixed Assets (793.64) (677.73)Sale of Fixed Assets 12.83 4.32Purchase of Investments (including advance paid) (352.11) (1,042.64)Sale of Investments 12.00 44.17Interest Received 32.55 17.14Dividend Received [including Rs. 20.63 crores from associates,(Previous Year Rs.9.42crores)] 69.45 13.91Deposits Refunded by / (Placed with ) Other Companies (Net) (142.13) (10.15)

Net Cash Used In Investing Activities (1,161.05) (1,650.98)

Cash Flow From Financing ActivitiesDebenture issue / Loan arrangement costs (12.87) (0.69)Interest Paid (230.10) (217.75)Repayment of long term Loans and Debentures (192.63) (417.97)Proceeds of long term Loans and Debentures 1,287.40 463.17Short Term Loans Raised (Net) (449.47) 1,403.91Long Term Trade Deposits Raised 30.67 8.20Share application money 0.15 19.97Proceeds from issue of Equity Shares 823.90 -Proceeds from issue of Preference Shares by a subsidiary 120.00 -Debenture Application Money Collected - 3.88Dividend Paid (Including tax on dividend) (145.49) (116.53)

Net Cash Used In Financing Activities 1,231.56 1,146.19

Net Increase / (Decrease) In Cash and Cash Equivalents 409.48 75.06Cash and Cash Equivalents Opening 1st April - (Refer Note 20, Page 154) 260.21 190.23Impact of Exchange Fluctuations on Cash and Cash Equivalents 8.88 (5.08)Cash and Cash Equivalents Closing 31st March - (Refer Note 20, Page 154) 678.57 260.21









127


Schedules forming part of the Consolidated Balance Sheet

Schedule 1 : Share CapitalMarch 31, 2008

Rupees Rupeescrores Crores

AUTHORISED SHARE CAPITAL

Ordinary Shares

100,00,00,000 Ordinary Shares of Re. 1/- each100.00 100.00

Preference Shares

1,00,00,000 Cumulative Redeemable Preference Shares of Rs. 100/- each 100.00 100.00

200.00 200.00

ISSUED SHARE CAPITAL

72,34,21,792 (Previous Year 60,28,51,493) Ordinary Shares of Re. 1 /- each, Fully Paid 72.34 60.29

72.34 60.29

SUBSCRIBED AND PAID UP

72,34,05,288 (Previous Year 60,28,51,493) Ordinary Shares of Re. 1 /- each, Fully Paid 72.34 60.29

72.34 60.29

Notes:

(i) 12,05,53,795 Ordinary Shares, of the face value of Re 1/- each, were allotted on May 23, 2008 as fully paid shares,pursuant to Rights Issue of Equity Shares by the Company (Refer Note 4, Page 147 ).

(ii) 16,504 Ordinary Shares have been issued but not subscribed to as at the end of the year and have been kept in abeyancepending resolution of legal dispute.


128


Schedule 2 : Reserves and SurplusMarch 31, 2008


Capital Reserve 43.91 43.91

Capital Redemption Reserve 1.12 1.12

Securities Premium Account (Refer Notes 4 and 5, Page 147 ) 1,675.28 851.37

General Reserve 430.81 404.63

Investment Reserve 5.00 5.00

Investment Allowance Utilised Reserve 4.03 4.03

Export Profits Reserve 0.41 0.41

Debenture Redemption Reserve 188.67 88.67

Foreign Exchange Earnings Reserve 7.51 7.51

Foreign Exchange Earnings Utilised Reserve 2.31 2.31

Foreign Currency Translation Reserve (Refer Note 2 (f), Page 144) 76.99 10.55

Foreign Currency Translation Reserve on Consolidation 180.89 12.13

Share of Post Acquisition Reserves of Group Companies 27.55 77.02

Profit and Loss Account 461.07 680.17

3,105.55 2,188.83

129



Schedule 3 : Secured LoansMarch 31, 2008


Non - Convertible Debentures 1,452.77 550.00

Term loans 1,168.93 1,045.48


Interest accrued & due 1.13 0.68

Others (Finance Lease) (Refer Note 14 (c), Page 152) 1.79 0.03

TOTAL 2,659.60 1,631.57


130


Schedule 4 : Unsecured LoansMarch 31, 2008


Fixed Deposits 27.18 3.08

Foreign Currency Term Loan from Banks 140.86 179.29

Long Term Loans from Others - 7.89

Long Term Loans from Banks 366.84 288.14

Short Term Loans from Banks 849.09 166.61

Short Term Loan from Others 597.22 1,069.49

Inter - Corporate Deposits 2.36 67.89

Commercial Paper - 50.00


TOTAL 1,987.28 1835.26

131



Schedule 5 : Fixed Assets

Rupees crores

Gross Block Translation Additions Deductions Gross Block Opening Translation Depreciation Deductions Accumulated NetParticulars (at cost ) Adjustment for the for the (at cost ) Depreciation Adjustment for the for the Depreciation Block

as at year year as at as at Year year as at as at01.04.2008 31.03.2009 01.04.2008 31.03.2009 31.03.2009

(Refer Note 4) (Refer Note 4) (Refer Note 5)

TANGIBLE ASSETSLAND (Freehold) 379.27 59 .32 10 .53 0.06 449.06 3.88 - - - 3.88 445.18

333.80 (12.41) 57 .88 - 379.27 3.88 - - - 3.88 375.39

LAND (Leasehold) 247.15 (14.66) 1.56 3.31 230.74 21 .80 0.47 2.74 2.48 22 .53 208.21259.81 (14.55) 2.08 0.19 247.15 20 .41 (1.27) 2.66 - 21 .80 225.35

- - - - - - - - - - -

BUILDINGS 2,441.25 149.40 263.96 6.06 2,848.55 267.94 2.63 62 .02 1.88 330.71 2,517.842,290.57 (79.28) 232.11 2.15 2,441.25 221.19 (4.98) 52 .08 0.35 267.94 2,173.31

PLANT AND MACHINERY 973.20 3.38 206.11 21 .32 1,161.37 482.95 1.69 68 .16 14 .27 538.53 622.84919.54 (3.43) 84 .66 27 .57 973.20 447.92 (1.57) 61 .58 24 .98 482.95 490.25

FURNITURE , FIXTURES 475.07 8.51 56 .66 11 .81 528.43 287.96 1.84 43 .81 10 .00 323.61 204.82AND OFFICE EQUIPMENTS. 463.58 (8.29) 34 .50 14 .72 475.07 261.30 (4.04) 40 .29 9.59 287.96 187.11

VEHICLES 36 .71 0.43 9.46 0.80 45 .80 15 .74 0.35 3.94 0.62 19 .41 26 .3934 .54 (0.12) 3.77 1.48 36 .71 13 .46 (0.09) 3.33 0.96 15 .74 20 .97

INTANGIBLE ASSETS

LEASEHOLD PROPERTY RIGHTS 10 .17 2.40 1.81 - 14 .38 1.85 (0.13) 0.88 - 2.60 11 .7810 .95 (0.78) - - 10 .17 1.26 (0.09) 0.68 - 1.85 8.32

WEBSITE DEVELOPMENT COST 4.61 - - - 4.61 4.55 - 0.01 - 4.56 0.054.53 - 0.08 - 4.61 4.53 - 0.02 - 4.55 0.06

CUSTOMER RESERVATION 6.53 0.26 2.69 - 9.48 1.52 0.08 1.38 - 2.98 6.50SYSTEM AND LICENSED SOFTWARE 17.18 - 4.19 14 .84 6.53 13 .31 - 2.02 13 .81 1.52 5.01

MANAGEMENT CONTRACTS 55 .48 11 .73 16 .27 - 83 .48 37 .50 7.27 2.90 - 47 .67 35 .8164 .04 (8.56) - - 55 .48 41 .64 (2.19) 2.93 4.88 37 .50 17 .98

NON COMPETE FEES 17 .01 (0.24) 1.12 1.41 16 .48 6.39 (0.07) 2.69 1.41 7.60 8.8817 .55 - 2.04 2.58 17 .01 5.11 - 2.03 0.75 6.39 10 .62

TOTAL 4,646.45 220.53 570.17 44 .77 5,392.38 1,132.08 14 .13 188.53 30 .66 1,304.08 4,088.304,416.09 (127.42) 421.31 63 .53 4,646.45 1,034.01 (14.23) 167.62 55 .32 1,132.08 3,514.37

Notes :1 Figures in italics are in respect of the previous year.2 Gross block includes improvements to leased buildings - Rs. 1,103.43 crores ( Previous Year - Rs. 1,077.24 crores).3 Plant and Machinery as at the year end includes Fixed Assets on finance lease: Gross Block - Rs. 3.41 crores; (Previous year - Rs.0.05

crore), Accumulated Depreciation - Rs. 1.52 crores (Previous year Rs.0.01 crore), Depreciation for the year - Rs.0.05 crore (Previousyear Rs.0.01 crore).

4 Adjustment on account of foreign exchange translation difference on opening balance and depriciation charge for the year is reflectedas "Translation Adjustment".

5 Accumulated Depreciation includes adjustment for impairment of Rs. 9.4 crores made in the earlier years.


132


Schedule 6 : InvestmentsMarch 31, 2008


Long TermTrade Investments

In Associate Companies 518.66 396.12[Includes Goodwill (Net of capital reserve of Rs. 1.18 crores){Previous Year - Rs. 0.70 crore} of Rs.103.04 crores{Previous Year - Rs.76.05 crores } arising on the acquisition of Associates]

In Shares

a Quoted (refer notes below) (Refer Note 8, Page 147) 1,263.27 992.31

b Unquoted (Refer Note 13(b), Page 149) 200.52 151.39

Other Investments - Shares - 0.01

Current Investments - Units of Liquid Mutual Funds 425.73 2.61

TOTAL 2,408.18 1,542.44

Less : Provision for Diminution in Value of Investments 0.50 0.50

2,407.68 1,541.94

Notes:(i) Investments in Quoted Shares include 50,900 shares of the Company held by a subsidiary, at a cost of Rs. 73,950,

which were acquired by it prior to it becoming a subsidiary.

(ii) Aggregate of Quoted Invesments - Gross :

Cost - 1,417.13 1,137.21

Market Value - 336.23 1,269.36

133



Schedule 7 : Current Assets, Loans and AdvancesMarch 31, 2008


InventoriesStores and Operating Supplies 36.77 26.46Food and Beverages 27.33 26.87

64.10 53.33Sundry Debtors (Unsecured) (net of provision) 177.77 207.91

Cash and Bank Balances

Cash on hand [Including Cheques on Hand - Rs. 5.02 crores 14.25 23.85(Previous Year - Rs. 3.01 crores)]

Balances with Banks :

In Current Accounts 59.05 198.09

In Short Term Deposit Accounts 179.54 35.66

238.59 233.75

252.84 257.60

494.71 518.84LOANS AND ADVANCES

Deposits with Public Bodies and Others 43.21 39.94

Advance payment of Tax (net of provision) 161.25 118.69

Other Advances (net of provision) 505.59 163.16

Deposits with Companies 176.43 44.41

886.48 366.20

TOTAL 1,381.19 885.04


134


Schedule 8 : Current Liabilities & ProvisionsMarch 31, 2008


CURRENT LIABILITIES

Sundry Creditors 296.78 260.22

Other Liabilities 115.52 90.60

Sundry Deposits 8.89 8.36

Advance from customers 72.13 60.29

Interest accrued but not due 62.23 14.84

Non-Convertible Debentures Application money - 3.88

Interim Dividend - 114.54

Tax on Interim Dividend - 19.47

TOTAL CURRENT LIABILITIES 555.55 572.20

PROVISIONS


Contingencies (Refer Note 22, Page 155) 1.40 1.20

Loyalty programmes (Refer Note 21, Page 154) 12.57 10.96

Taxation (net of advance) 16.73 15.84

Proposed Dividend 86.81 -

Tax on Dividend 14.75 -

TOTAL PROVISIONS 201.47 86.12

TOTAL 757.02 658.32

135



Schedule 9 : Miscellaneous Expenditure (to the extent not adjusted or written off)March 31, 2008


Borrowing Costs


Add : Incurred during the year 1.76 1.60

Add : Translation Adjustment 0.62 -



Voluntary Retirement Scheme Expenses



Closing Balance - 0.30

TOTAL 7.64 9.15


136

Schedules forming part of the Consolidated Profit and Loss Account

Schedule 10 : Rooms, Restaurants, Banquets and Other Income


INCOME crores crores crores

Rooms, Restaurants, Banquets and Other Services 2,600.59 2,920.03

Other Operating Income (Refer Note 3 (a), Page 146) 85.54 -

2,686.13 2,920.03

Other Income

Dividend Income (Refer Note 9 Page 147 ) 48.74 7.55

Profit on sale of assets (Net) 2.71 -

Profit on sale of investments (net) 0.04 39.12

Miscellaneous Income [Including Exchange gain - Rs. Nil(Previous year Rs. 15.03 Crores)] 19.01 45.92

70.50 92.59

TOTAL 2,756.63 3,012.62

137


Schedules forming part of the Consolidated Profit and Loss Account

Schedule 11 : Operating and General Expenses


Operating ExpensesPayments to & Provisions for Employees

Salaries, Wages, Bonus etc 617.71 527.86Group's Contribution to Provident & Other Funds 97.42 105.50Payment to Contractors 58.88 49.62Staff Welfare Expenses 81.15 81.46

855.16 764.44Food & Beverages Consumed 277.22 278.19

Other Operating ExpensesLinen & Room Supplies 46.57 45.93Catering Supplies 22.84 28.18Other Supplies 15.92 9.48Fuel, Power & Light 167.74 154.68Repairs to Buildings 27.78 28.60Repairs to Machinery 35.51 31.75Repairs to Others 30.69 31.36Linen, Uniform Washing and Laundry Expenses 16.64 24.37Payment to Orchestra Staff, Artistes and Others 11.15 8.27Guest Transportation 11.59 13.04Travel Agents' Commission 25.79 30.95Discount to Collecting Agents 29.55 32.93Other Operating Expenses 42.28 24.00

484.05 463.54General Expenses

Rent 45.59 55.34Licence Fees 106.42 113.64Rates & Taxes 52.35 47.97Insurance 16.31 17.91Advertising & Publicity 88.86 83.75Printing & Stationery 13.94 15.43Passage & Travelling 22.57 22.79Provision for Doubtful Debts and Advances 4.50 4.46Professional Fees 61.70 51.91Exchange Loss (Net) 46.59 -Loss on Sale of Assets (Net) - 8.54Other Expenses 113.47 108.49Auditors' Remuneration (Refer Note 16, Page 153 ) 4.14 4.46

576.44 534.69Amortisation of Voluntary Retirement Scheme Expenses 0.30 1.36Directors' Fees and Commission 3.75 4.68TOTAL 2,196.92 2,046.90


138

Schedules 12NOTES ON CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1. BASIS OF CONSOLIDATION:

(a) The Consolidated Financial Statements relate to The Indian Hotels Company Ltd. (‘the Company’) its Subsidiaries,Jointly Controlled Entities and Associates. The Company, its subsidiaries and jointly controlled entities togetherconstitute ‘the Group’. The Consolidated Financial Statements have been prepared on the following basis:

- The financial statements of the Company and its Subsidiaries have been combined on a line-by-line basis byadding together the book values of like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions and unrealised profits or losses as per Accounting Standard 21‘Consolidated Financial Statements’, as notified by the Companies (Accounting Standards) Rules, 2006.

- In case of foreign subsidiaries and foreign jointly controlled entities, revenue items are consolidated at theaverage exchange rate prevailing during the year. The opening balance in Profit and Loss Account and theopening balance in Reserves and Surplus have been converted at the rates prevailing as at the respectiveBalance Sheet dates. All assets and liabilities as at the year-end are converted at the rates prevailing as at theend of the year. Any exchange difference arising on consolidation is shown under Foreign Currency TranslationReserve on Consolidation.

- Investments in Associate Companies have been accounted for under the equity method, as per AccountingStandard 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’, as notified bythe Companies (Accounting Standards) Rules, 2006.

- Interests in Jointly Controlled Entities have been accounted for by using the proportionate consolidationmethod, as per Accounting Standard 27 ‘Financial Reporting of Interests in Joint Ventures’, as notified by theCompanies (Accounting Standards) Rules, 2006.

- The financial statements of Subsidiaries, Jointly Controlled Entities and Associates used in the consolidationare drawn upto the same reporting date as that of the Company except in the case of an Associate Companywhere the accounts have been drawn upto December 31, 2008.

- The excess of cost to the Company, of its investment in the Subsidiaries and Jointly Controlled Entities over theCompany’s portion of equity as at the date of making the investment is recognised in the financial statementsas Goodwill.

- The excess of Company’s portion of equity of the Subsidiaries and Jointly Controlled Entities over the cost ofacquisition of the respective investments as at the date of making the investment is treated as Capital Reserve.

- Goodwill / Capital Reserve arising on investments in Associate Companies is retained / adjusted under the head“Investments in Associate Companies”.

- Goodwill arising out of consolidation is not amortised. However, the same is tested for impairment at eachBalance Sheet date.

- Minority Interest in the net assets of Subsidiaries consists of :

i. the amount of equity attributable to the minorities at the date on which investment in Subsidiary is madeand

ii. the minorities’ share of movements in equity since the date the parent-subsidiary relationship came intoexistence.

139


SchedulesSchedule 12 : NOTES ON CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

(b) The list of Subsidiaries, Jointly Controlled Entities and Associates, which are included in the consolidation withtheir respective country of incorporation and the Group’s holdings therein, is given below: -

i. Subsidiary Companies

Name of the Company Country of Holding (%)Incorporation Current Previous

Year Year

Domestic

TIFCO Holdings Ltd. (formerly known as Taj India 100 100Investment and Finance Company Ltd.)

KTC Hotels Ltd. India 100 100

United Hotels Ltd. India 55 55

Roots Corporation Ltd. India 100 100

Taj SATS Air Catering Ltd. India 51 51

Residency Foods & Beverages Ltd. India 98.68 98.68

Innovative Foods Ltd. India 67.94 67.94

International

Taj International Hotels (H.K.) Ltd. (TIHK) Hong Kong 100 100

Chieftain Corporation NV Netherlands Antilles 100 100

IHOCO BV Netherlands 100 100

IHMS (HK) Ltd. Hong Kong 100 -

St. James Court Hotels Ltd. United Kingdom 54.01 54.01

Taj International Hotels Ltd. United Kingdom 100 100

International Hotel Management Services Inc. United States 100 100and its Limited Liability Companies (IHMS Inc.) of America

Samsara Properties Ltd. British Virgin Islands 100 100

IHMS (Australia) Pty Ltd. Australia 100 100

IHMS (Restaurants) Pty. Ltd. Australia 100 100

Apex Hotel Management Services (Pte) Ltd. Singapore 100 100


140


ii. Jointly Controlled Entities


Year Year

Domestic

Taj Madras Flight Kitchen Pvt. Ltd. India 50.00 50.00

Taj Karnataka Hotels & Resorts Ltd. India 40.00 40.00

Taj Kerala Hotels & Resorts Ltd. India 28.30 28.30

Taj GVK Hotels & Resorts Ltd. India 25.52 25.52

Taj Safaris Ltd. India 33.33 33.33

International

Taj Asia Ltd. Hong Kong 26.66 26.66

IHMS Hotels (SA) (Proprietary) Ltd. (formerly South Africa 50 50known as Taj International Hotels (South Africa)(Pty) Ltd.)

iii. Associates


Year Year

Domestic

Ideal Ice & Cold Storage Co. Ltd. ** India 34.99 34.99

Benares Hotels Ltd. India 49.53 49.53Taj Air Ltd. India 45.64 45.64

Piem Hotels Ltd. India 46.20 46.20

Taj Trade and Transport Ltd. India 46.62 46.62Taj Enterprises Ltd. India 44.60 44.60

Taida Trading and Industries Ltd. ** India 41.50 41.50

Inditravel Pvt. Ltd. India 47.08 47.08Oriental Hotels Ltd. India 33.80* 33.80*

Taj Madurai Ltd. India 26.00 26.00

International

Taj Lanka Resorts Ltd. (TLRL) Sri Lanka 24.16 24.16

Taj Lanka Hotels Ltd. (TLHL) Sri Lanka 24.62 24.62BJETS Pte Ltd. Singapore 44.44 -

* Including 5.25% of the shares held in the form of Global Depository Receipts (GDR)

** Investments in these Associates have been reported at NIL value as the Group’s share of losses exceedsthe carrying amount of its investments.

141


(c) In the case of the following entities, unaudited financial statements as certified by the Management have beenconsidered in the consolidated financial statements. The adoption of the accounts by the Board of Directors ofthese companies is pending :

i. Taj Asia Ltd. (Jointly Controlled Entity)

ii. BJETS Pte Ltd. (Associate Company)

(d) The following amounts are included in the Financial Statements in respect of the Jointly Controlled Entitiesbased on the proportionate consolidation method prescribed in the Accounting Standard relating to ‘FinancialReporting of Interest in Joint Ventures’ (AS 27) as notified by the Companies (Accounting Standards) Rules,2006 :-

Rs. crores

Particulars Current Year PreviousYear

Assets

Fixed Assets (Net Block) 255.75 169.07

Investments 3.75 0.28

Working Capital :

Current Assets, Loans and Advances 55.95 63.68

Less :- Current Liabilities and Provisions 35.48 29.02

Net Current Assets 20.47 34.66

Miscellaneous Expenditure (to the extent not written off or adjusted) 0.42 0.46

Liabilities

Loan Funds :

Secured Loans 84.08 31.35

Unsecured Loans 30.32 33.58

Deferred Tax Liability 5.26 3.44

Contingent Liabilities 22.79 15.87

Capital Commitments 24.61 8.81



142


Rs. crores

Particulars Current Year Previous Year

Income

Operating Income 127.37 144.83

Other Income :

Dividend 0.10 0.06

Profit on sale of assets (net) 0.01 0.01

Miscellaneous Income 1.19 1.17

Expenses

Operating Expenses :

Payment to & Provisions for Employees 25.54 21.41

Food & Beverages consumed 15.34 16.32

Other Operating Expenses 24.61 22.51

General Expenses 19.85 26.90

VRS amortisation expenses - 0.20

Directors’ Fees 0.03 0.03


Interest (net) 3.09 2.32

2. Significant Accounting Policies:

The financial statements are prepared under historical cost convention on an accrual basis and comply with theAccounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006. The preparation of thefinancial statements requires the Management to make estimates and assumptions considered in the reported amountsof assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reportedincome and expenses. The Management believes that the estimates used in the preparation of the financial statementsare prudent and reasonable. Future results could differ from these estimates. The significant accounting policiesadopted in the presentation of the financial Statements are as under:-

(a) Rooms, Restaurants, Banquets and Other Services:

Rooms, Restaurants, Banquets and Other Services comprise of sale of rooms, food and beverages, alliedservices relating to hotel operations, including net income from telecommunication services and managementand operating fees. Revenue is recognised upon rendering of the service.

(b) Export Benefits Entitlement:

Benefits arising out of Duty Free Scrips utilised for the acquisition of fixed assets are being adjusted against thecost of the related fixed assets. (Refer Note 19, Page 154)

143


(c) Employee Benefits:

i. Defined Contribution Schemes

Employee benefits arising out of contributions to recognised Provident Fund, Superannuation, SocialSecurity etc. paid/payable during the year are recognised in the Profit and Loss Account. The shortfall,if any, between the return guaranteed by the statute and actual earnings of the Provident Fund is providedfor and contributed to the Fund.

The Group also has separate funded and unfunded schemes, which guarantee a minimum pension tocertain categories of employees. The Group accounts for the net present value of its obligation therein,based on an independent external actuarial valuation carried out annually.

Certain international subsidiaries operate a defined contribution pension scheme and the pension chargerepresents the amounts paid/payable by them to the Fund.

ii. Gratuity

The Group has separate funded and unfunded schemes for gratuity benefits. In respect of funded schemes,annual contributions are made to funds administered by the trustees and managed by insurance companiesfor amounts notified by the said insurance companies. The Group accounts for the net present value ofits obligations for gratuity benefits based on an independent external actuarial valuation, determined onthe basis of the projected unit credit method, carried out annually. Actuarial gains and losses areimmediately recognised in the Profit and Loss Account.

iii. Post Retirement Benefits

The net present value of the Group’s obligation towards post retirement pension scheme, whereverapplicable, is actuarially determined based on the projected unit credit method as at the Balance Sheetdate. Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

iv. Compensated Absences

The Group has a scheme for compensated absences for employees, the liability for which is determinedon the basis of an actuarial valuation carried out at the end of the year.

v. Other Employee Benefits

Other benefits, comprising of Long Service Awards and Leave Travel Allowance, are determined on anundiscounted basis and recognised based on the likely entitlement thereof.

(d) Fixed Assets:

Fixed assets are stated at cost less depreciation/amortisation and impairment losses, if any. Cost includesexpenses incidental to the installation of assets and attributable borrowing costs.



144

(e) Depreciation and Amortisation:

i. Depreciation:

Indian Entities

In respect of assets acquired before December 16, 1993, depreciation is provided under the straight-linemethod at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956, as existingon that date.

In respect of assets acquired on or after December 16, 1993, depreciation is provided at the rates asspecified in Schedule XIV to the Companies Act, 1956, as revised with effect from that date. In respect ofLeasehold Land, depreciation is provided for, from the date the land is put to use for commercial operations,over the balance period of the lease. In respect of Improvements to Building, depreciation is provided @6.67%.

In respect of one subsidiary, depreciation is provided under the written down value method at the ratesand in the manner specified in Schedule XIV to the Companies Act, 1956, amounts in respect of which arenot material.

International Entities

Assets are depreciated based on the estimated useful life determined by the Management of the respectiveSubsidiaries, whereof the average rates of depreciation for each category are equal to or higher than therates prescribed in Schedule XIV to the Companies Act, 1956.

ii. Amortisation:

Intangible assets are amortised on a straight-line basis at rates specified below:

Leasehold Property Rights 6.67% *

Website Development Cost 20.00%

Cost of Customer Reservation System and Licensed Software 16.67%

Management Contract Acquisition Costs 5% to 33.33% **

Others

Service & Operating Rights 10.00%

Non-Compete Fees 14.29%

Lease Acquisition Costs of a Jointly Controlled Entity 5.00%

*- Over the term of the lease.

**- Based on the terms of the Contract.

(f) Transactions in Foreign Exchange:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

In respect of integral foreign operations:-

i). Monetary items outstanding at the Balance Sheet date are translated at the exchange rate prevailing atthe Balance Sheet date and the resultant difference is recognised as income or expense.


145


ii). Non-monetary items outstanding at the Balance Sheet date are reported using the exchange rate at thedate of the transactions.

In respect of non-integral foreign operations:-

Both monetary and non-monetary items are translated at the closing rate and the resultant difference isaccumulated in a Foreign Currency Translation Reserve, until the disposal of the net investment.

The exchange differences arising on revaluation of long term foreign currency monetary items for the yearended March 31, 2008 and 2009 are being amortised over the shorter of the maturity period or March 31, 2011.The unamortised balance as at the year end is presented as “Foreign Currency Monetary Item TranslationDifference Account”.

(g) Derivative Instruments:

The Group has an exposure to derivative contracts in the nature of currency swaps and interest rate swapswhich are in respect of some of the underlying rupee borrowings. Exchange differences arising on repayment/revaluation of such contracts are recognised as income or expense in the period in which they arise.

(h) Impairment of Assets:

Impairment is ascertained at each Balance Sheet date in respect of the Group’s fixed assets. An impairment lossis recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverableamount is the greater of the net selling price and value in use. In assessing value in use, the estimated futurecash flows are discounted to their present value, based on an appropriate discount factor.

(i) Assets taken on lease:

i. In respect of finance lease arrangements, the assets are capitalised and depreciated. Finance charges aredebited to the Profit and Loss Account of the year in which they are incurred.

ii. Operating Lease payments are recognised as expenditure in the Profit and Loss Account on a straight linebasis, representative of the time pattern of benefits received from the use of the assets taken on lease.

(j) Inventories:

Stock of food and beverages and operating supplies are carried at cost (computed on weighted average basis)or Net Realisable Value, whichever is lower.

(k) Investments:

i. Long term investments are carried at cost. However, provision is made for diminution in value, other thantemporary, on an individual basis.

ii. Current investments are carried at the lower of cost and fair value determined on a category-wise basis.

(l) Miscellaneous Expenditure:

Payments made under the Voluntary Retirement Scheme, including the additional liabilities towards leaveencashment and gratuity arising pursuant to the Voluntary Retirement Scheme, are amortised over a period of60 months, commencing from the month in which the Scheme is implemented.



146

(m) Taxes on income:

i. Income tax is computed in accordance with Accounting Standard 22 - ‘Accounting for Taxes on Income’(AS-22), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted inthe same period to which the revenue and expenses relate.

ii. Provision for current income tax is made for the tax liability payable on taxable income after consideringtax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. Thedifferences between the taxable income and the net profit or loss before tax for the year as per the financialstatements are identified and the tax effect of timing differences is recognised as a deferred tax asset ordeferred tax liability. The tax effect is calculated on accumulated timing differences at the end of theaccounting year based on effective tax rates substantively enacted by the Balance Sheet date.

iii. Deferred tax assets, other than on unabsorbed depreciation or carried forward losses, are recognisedonly if there is reasonable certainty that they will be realised in the future and are reviewed for theappropriateness of their respective carrying values at each Balance Sheet date. In situations where theCompany has unabsorbed depreciation or carried forward losses, deferred tax assets are recognised onlyif there is virtual certainty supported by convincing evidence that the same can be realised against futuretaxable profits.

(n) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 – ‘Provisions, Contingent Liabilities and ContingentAssets’ (AS-29), notified by the Companies (Accounting Standards) Rules, 2006, when there is a present legalor statutory obligation as a result of past events, where it is probable that there will be outflow of resources tosettle the obligation and when a reliable estimate of the amount of the obligation can be made. ContingentLiabilities are recognised only when there is a possible obligation arising from past events due to occurrence ornon-occurrence of one or more uncertain future events, not wholly within the control of the Company, or whereany present obligation cannot be measured in terms of future outflow of resources or where a reliable estimateof the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having alargely probable outflow of resources are provided for. Contingent Assets are not recognised in the financialstatements.

(o) Borrowing Costs :

i. Interest and other borrowing costs on specific borrowings, attributable to qualifying assets are capitalised.

ii. Interest not attributable to qualifying assets is charged to revenue account in the year in which it isincurred.

iii. Debenture issues cost adjusted against the Security Premium Account in accordance with Section 78 ofthe Companies Act, 1956.

iv. Other Borrowing Costs are charged to revenue account over the tenure of the borrowing.

3. (a) The Taj Mahal Palace & Tower in Mumbai was attacked by terrorists on November 26, 2008 amongst the othertargets in the city, due to which the heritage wing of the property was severely damaged. No adjustments havebeen carried out in the books of account of the Company, with regard to the value of the damage to property, asthe Company is adequately insured for property restoration under its insurance policy. The Company is alsoinsured for Loss of Profits to cover the period of interruption for up to 12 months from the date of the incident.


147


Accordingly, the Company has recognised a claim for Business Interruption upto March 31, 2009 amounting toRs. 85.54 crores on an estimated basis and is at an advanced stage of finalising the claim with the insurers.

(b) Exceptional item for the current year includes Rs. 6.21 crores relating to annuities purchased from the LifeInsurance Corporation of India for pension payments to legal heirs of the employees deceased in the abovementioned incident.

(c) Exceptional item of Rs. 0.58 crore (Previous Year: Rs. 54.16 crores) pertains to expenditure incurred by a subsidiary,IHMS Inc towards Employee severance costs consequent to closure of one of its properties for extensiverenovation.

4. Rights Issue of Simultaneous but unlinked issue of Equity Shares and Non-Convertible Debentures with DetachableWarrants to the equity shareholders of the Company

During the year, the Company completed its simultaneous but unlinked issue of Equity Shares at a price of Rs. 70 eachand 6,02,76,898, 6% Non-Convertible Debentures with Detachable Warrants aggregating Rs. 1,446.65 crores. Thewarrant holders can exercise their right to apply for the Equity Shares at the Exercise Price of Rs. 150 at any time duringthe Warrant Exercise Period i.e. September 2009. Consequently, the Share Capital of the Company increased from Rs.60.29 crores to Rs. 72.34 crores on allotment of 120,553,795 Equity Shares. The expenditure of Rs. 7.04 crores (net oftax of Rs. 1.08 crores) in connection with the Rights Issue has been set off against the ‘Securities Premium Account’in accordance with Section 78 of the Companies Act, 1956.

5. Non-Convertible Debentures:

The Company has, during the year, issued 11.86% Secured Non-Convertible Debentures, having a face value of Rs.10,00,000 each, aggregating Rs. 300 crores. The expenses in relation to the said issue, amounting to Rs. 0.87 crore (netof tax of Rs. 0.45 crore), have been set off against the ‘Securities Premium Account’, in accordance with Section 78 ofthe Companies Act, 1956.

6. During the year, a Subsidiary of the Group has issued 1,40,00,000, 5% Cumulative Convertible Preference Share of Rs.100 each, aggregating Rs. 140.00 crores. Each Preference Share shall be compulsorily and automatically convertedinto one fully paid-up equity share of Rs. 10 each of the subsidiary at a premium of Rs. 90 per share at the end of 3years from the date of allotment without any further act on the part of the shareholders. Out of the total issue,20,00,000 shares have been issued to another Subsidiary of the Group which has been eliminated on consolidation.

7. Profit on sale of a hotel property relates to sale of a unit located at Thekkady by a Jointly Controlled Entity.

8. The Group has an investment of Rs. 1,263.05 crores (USD 247.9 million) in a company listed on the New York StockExchange. On the basis of the market price of this company on the Balance Sheet date, there is a significant diminutionin the value of the Group’s investment in this company. The Group’s investment in this company is for long-term andis strategic in nature. This company is a venerable, more than 70-years old Company which has consistently madeprofits and provided healthy return to its shareholders. All its assets are unique, iconic, strategically located and ofworld class quality. On the basis of the Company’s long-term commitment and on consideration of the valuationreport of an independent valuer and other long-term strategies of the Company, in the opinion of the Management,the diminution in value of its shareholding of this company is of a temporary nature.

9. Dividend Income:

Dividend Income consists of income on long term investments – Rs. 10.13 crores (Previous Year: Rs. 6.64 crores) andon current investments – Rs. 38.61 crores (Previous Year: Rs. 0.91 crore)



148

10. Provision for Current Tax & Deferred Tax:

a. Provision for Tax Includes

Rs. crores


Current Tax 133.05 234.67

Wealth Tax 1.00 0.91

Fringe Benefit Tax 6.30 5.30

Deferred Tax charge 11.62 1.75

Total 151.97 242.63

b. The net deferred tax liability comprises of the following components:

Rs. crores


Deferred tax Liability

Depreciation on fixed assets 184.94 168.16

Deferred revenue expenditure - 0.10

Total 184.94 168.26

Deferred tax Assets

Provision for doubtful debts 4.51 4.31


Others 9.40 5.90

Total 24.42 19.38

Net Deferred Tax Liabilities 160.52 148.88

c. The net deferred tax assets comprises of the following components :

Rs. crores




Others - -

Total 0.37 0.35

Deferred Tax Assets 0.37 0.35


149


11. Estimated amount of contracts remaining to be executed on capital account and not provided for (including share ofJointly Controlled Entities) is Rs. 458.06 crores (previous year - Rs. 408.69 crores.)

12. Contingent Liabilities

(Includes share of Jointly Controlled Entities)

a) On account of Income Tax matters in dispute:

i) In respect of appeals pending before Appellate Authorities for matters which have been decided in theGroup’s favour in earlier assessment years - Rs. 58.07 crores (previous year - Rs. 64.66 crores).

ii) In respect of other matters for which appeals are pending - Rs. 33.90 crores (previous year - Rs. 45.57crores).

b) On account of dispute in respect of:

i) Luxury tax – Rs. 0.38 crore (previous year - Rs. 0.48 crore)

ii) Entertainment tax – Rs. 0.53 crore (previous year - Rs. 0.53 crore)

iii) Sales tax – Rs. 9.89 crores (previous year - Rs. 7.20 crores)

iv) Property tax – Rs. 9.34 crores (previous year - Rs. 8.97 crores)

v) Stamp Duty – Rs 2.34 crores (previous year - Rs 2.34 crores)

vi) Others – Rs. 22.24 crores (previous year - Rs. 19.19 crores)

c) Other claims against the Group not acknowledged as debts - Rs. 108.60 crores (previous year - Rs. 57.90 crores).

d) Guarantees given by the Group in respect of deposits received and loans obtained outstanding as on March 31,2009 - Rs. 37.64 crores (previous year - Rs. 33.04 crores).

e) A subsidiary has reported a contingent liability in respect of a labour dispute, the amount of which isunascertainable.

13. Guarantees and Undertaking Given

a) Guarantees given to bankers:

St. James Court Hotel Limited owns the leasehold interest in a property in London, such interest having beenassigned to it in an earlier period by an erstwhile subsidiary company on the basis of a licence granted by thelandlord of the property, Scottish Widows’ Fund and Life Assurance Society. The licence was granted for suchassignment upon the guarantee from the Company for the due performance and observance by St. James CourtHotel Limited of the covenants and conditions contained in the licence. The obligations of the Company infavour of the landlord shall remain in force throughout the full term of the lease, including any renewals.

b) Undertakings given:

The Group has given the following undertakings as at the Balance Sheet date:

i. An undertaking to the bankers of TLRL by TIHK., for non-disposal of its shares in TLRL in considerationof the banks providing loan facilities to TLRL. TIHK holds 24.16% ordinary shares of TLRL as at March31, 2009.



150

ii. TIHK has agreed to subordinate 50% of its basic management fees and 100% of its incentive fees duefrom TLRL in lieu of a bank having extended loan facilities to TLRL. No amount of fee has remainedunpaid on account of this subordination as at March 31, 2009.

iii. The Group has confirmed its intention to make financial support to a subsidiary, St James Court HotelsLimited(“SJCHL”) to meet its liabilities as they fall due for a period of at least one year from the date ofapproval of SJCHL’s financial statements for the year ended March 31, 2009.

iv. The Group has confirmed its intention to make available financial support to a subsidiary, IHMS(Restaurants) Pty Limited for a period of at least one year from the date of approval of IHMS (Restaurants)Pty Limited financial statements for the year ended March 31, 2009 or until such time as the Companyresumes profitability and is financially self sufficient.

v. The Group has entered into a Share Retention Agreement with International Finance Corporation,Washington, USA (“IFC”) in November 2003, in consideration of IFC having provided loan facilities to asubsidiary of a jointly controlled entity, Taj Maldives Private Limited (“TMPL”). The Group, of whichTIHK is a member, has also agreed to maintain at least a 26% aggregate effective shareholding in TMPLand to retain effective control of TMPL, so long as any amount remains outstanding under the loanagreement between TMPL and IFC.

vi. The Group has given an undertaking to a lender of Taj Air Limited (TAL) not to transfer, assign, disposeof or encumber its holding in the shares of TAL without the said lender’s prior written approval, except forchanges in the shareholding of TAL between specified entities

14. Finance and Operating Leases:

(a) IHMS formed IHMS LLC (“New York LLC”) under the laws of the State of Delaware, U.S.A. The New York LLCwas formed to acquire the lease with 795 Fifth Avenue Corporation, its affiliates 795 Fifth Avenue LimitedPartnership, Barneys New York and individual apartment owners, which encompass the facilities of the HotelPierre.

The New York LLC has entered into lease agreements for the use of various facilities at the Hotel Pierre for thepurpose of operating a hotel business. Under the terms of the various Agreements, the New York LLC isrequired to:

i. provide an irrevocable unconditional letter of credit in the amount of $ 5 million, as to be renewedannually until expiration of the lease.

ii. spend not less than $35 million on renovations of the property not later than June 30, 2007.

iii. In November 2007, the New York LLC entered into a lease modification agreement with its landlord. Theprincipal modification extended the lease term for an additional 10 years, to June 30, 2025, and increasedthe New York LLC’s renovation commitment to $80 million. In order to expedite the renovation, the NewYork LLC closed the hotel rooms and restaurant operations of the Hotel Pierre effective December 31,2007, and entered into a severance arrangement with the union to offer eligible employees enhancedseverance payments with no recall rights or normal severance payments with recall rights. The companypaid approximately $12.25 million in severance payments in January 2008.


151


The lease modification requires the New York LLC to complete the renovation by January 30, 2009. As ofMarch 31, 2008, the New York LLC has expended approximately $ 85,692,000.

On December 10, 2008, the New York LLC sent a letter request to 795 Corp. to extend the renovationcompletion dated to June 30, 2009 which 795 Corp. agreed to through a letter dated December 19, 2008 tothe New York LLC.

Also as part of the renovations, 795 Corp. required the New York LLC to post a $20 million performancebond. As the renovations were almost substantially completed, on April 8, 2009, 795 Corp. reduced therequired performance bond to $10 million. Future fixed and minimum rentals, exclusive of formula orpercentage rentals for the period ending March 31, are approximately as under :-

Year Rs. crores

2010 10.03

2011 10.03

2012 10.03

2013 10.03

2014 10.03

Thereafter (per annum) 12.54

Total 62.69

iv. Lease on cooperative apartments and ballroom

The New York LLC assumed a lease agreement with Barney’s New York, currently scheduled to expire inJune 2013, for the use of Hotel Pierre’s ballroom, and with some other individuals for the use of theircooperative apartments as hotel rooms and suites. Such leases require the New York LLC to pay minimumrent which increase annually by the change in the Consumer Price Index and to reimburse the owners fortheir actual cooperative maintenance charges. Future fixed minimum rentals, exclusive of formula orpercentage rentals for the years ending March 31, are approximately as follows:

Year Rs. crores

2010 4.20

2011 4.20

2012 4.20

2013 4.20

2014 1.73

Thereafter (per annum) 1.01

Total 19.54



152

(b) IHMS New York LLC and IHMS Boston LLC, as lessors under various operating leases, will receive base rentsover the next five years and, in the aggregate, over the remaining terms of the leases as follows :-

Rs. crores

March 31 Boston LLC New York LLC Total

2010 2.22 1.56 3.78

2011 2.22 1.85 4.07

2012 2.22 1.91 4.13

2013 2.22 1.98 4.20

2014 2.22 - 2.22

Thereafter 7.02 - 7.02

Total 18.12 7.30 25.42

(c) The Group has taken assets on finance lease, certain assets, the minimum future lease rentals and presentvalue of minimum lease rentals payable are as follows:

Rs. crores


Minimum lease rentals payable as on Balance Sheet date 1.79 0.03

Present value of Minimum lease rentals payable at discounted 1.62 0.02rate implicit in lease agreement

Rs. crores

Particulars Minimum lease Present value ofpayment minimum lease payment

at discounted rateimplicit in lease

agreement

Current Previous Current PreviousYear Year Year Year

Not later than one year 0.88 0.02 0.77 0.01

Later than one year but not later than five years 0.91 0.01 0.85 0.01

Total 1.79 0.03 1.62 0.02


153



(d) The Group has taken on operating lease, certain assets, the minimum future lease rentals payable on which areas follows:

Rs. crores


Not later than one year 3.68 3.39

Later than one year but not later than five years 10.62 5.82

Later than five years 90.56 65.98

15. Interest expense is net of interest income and it comprises of:

Rs. crores


Interest Expenses

Fixed Loans * 265.79 208.90

Other Loans ** 15.74 15.84

281.53 224.74

Less : Interest Capitalised 10.44 4.45

Total Expenses 271.09 220.29

Interest Income (Gross)

Inter-Corporate Deposits 23.82 1.94

Deposits with Banks 3.60 7.43

Interest on Income Tax Refund 3.79 2.20

Others 9.42 6.40

Total Income 40.63 17.97

Interest (net) 230.46 202.32

* Interest on Fixed Loans includes Rs. 3.59 crores (Previous year - Rs. 3.83 crores) being expenses on loansamortised over the tenure of the loan.

** Includes interest on luxury tax amounting to Nil (previous year – Rs. 2.14 crores).

16. Auditors’ Remuneration:

Rs. crores


1) Audit Fees 3.02 3.12

2) Payment for Other Services 1.02 1.21

3) Expenses and incidentals 0.10 0.13

Total Auditors’ Remuneration 4.14 4.46


154


Professional fees include - Nil (previous year – Rs. 0.03 crore) paid to a firm in which partners of one of the audit firmsare partners. The above excludes Rs. 0.69 crore (previous year – Rs. 0.05 crore) paid to auditors for Other Services anddebited to the Securities Premium Account.

17. Derivative Instruments :

The Group uses forward exchange contracts, interest rate swaps, currency swaps, forward contracts and optioncontract to hedge its exposure in foreign currency borrowings and interest rates. The information on derivativeinstruments outstanding as on Balance Sheet date is as follows:

Particulars Risk CurrentYear PreviousYear

Hedged (USD Rs. crores (USD Rs. croresMillion) Million)

Currency swaps INR/USD 22.73 100.00 22.73 100.00

Option Contracts INR/USD 30.00 153.00 - -

Forward Contracts INR/USD 0.50 2.52 - -

Interest Rate Swaps USD/GBP LIBOR 214.17 1,091.17 168.43 674.06

18. The Company has exercised the option granted vide notification F.No.17/33/2008/CL-V dated March 31, 2009, issuedby the Ministry of Corporate Affairs and, accordingly, the exchange differences arising on revaluation of long termforeign currency monetary items for the year ended March 31, 2008 and 2009 have been recognised over the shorterof the maturity period or March 31, 2011. The unamortised balance as at the year end is presented as “ForeignCurrency Monetary Item Translation Difference Account”. Accordingly an amount of Rs. 3.82 crores has beenadjusted from the General Reserve and an aggregate amount of Rs. 11.63 crores has been deferred and recognised asan asset. Consequently, the profit of the current year is higher by Rs. 15.45 crores.

19. Benefits arising out of Duty Free Scrips, utilised for the acquisition of fixed assets are, with effect from April 1, 2008,being adjusted against the cost of the related asset, as against the practice hitherto followed of recognising the sameas income. Consequent upon the change, miscellaneous income for the year is lower by Rs. 17.90 crores, with acorresponding deduction in the value of fixed assets, as also reduction in the depreciation thereon.

20. Details of Cash and Cash Equivalents:

Rs. crores


Cash and Bank Balances (as per Schedule 7) 252.84 257.60

Add : Investments in Liquid Mutual Funds (as per Schedule 6) 425.73 2.61

Cash and Cash Equivalents 678.57 260.21

21. Provision for Loyalty Programmes :

Rs. crores



Less : Redemption during the year 0.90 0.77

10.06 8.05

Add : Provision for the year 2.51 2.91


155



22. Provision for Contingencies:

The Group is carrying provisions for contingencies towards various claims against the Company not acknowledgedas debts towards disputed statutory claims.

Rs. crores


Opening Balance 1.20 1.12Add: Provision made during the year 0.20 0.08

1.40 1.20

Less : Amounts Utilised during the year - -Closing Balance 1.40 1.20

23. Employee Benefits:

(a) The Group has contributed the following amounts towards domestic defined contribution plans in the Profitand Loss Account under the head Group’s Contribution to Provident Fund and Other Funds.-

Rs. croresParticulars Current Year Previous Year

Provident Fund 15.93 14.35Superannuation Fund 5.09 4.08

Total 21.02 18.43

(b) The Group has contributed Rs.42.06 crores (Previous Year: Rs.77.88 crores) towards foreign Defined ContributionPlans in the Profit and Loss Account under the head Group’s Contribution to Provident Fund and Other Funds.

(c) The Group operates post retirement defined benefit plans as follows :-

a. Funded :

i. Post Retirement Gratuity

ii. Pension to Employees – Post retirement minimum guaranteed pension scheme for certain categories ofemployees, which is funded by the Company and the employees.

b. Unfunded :

i. Pension to Executive Directors and Employees – Post retirement minimum guaranteed pension schemefor certain retired executive directors and certain categories of employees, which is unfunded.

ii. Post Retirement Gratuity

(d) Details of funded gratuity plans are as follows :-

i. Amount to be recognised in Balance Sheet and movement in net liability

Rs. croresParticulars Current Year Previous Year

Present Value of Funded Obligations 112.51 90.57

Fair Value of Plan Assets (86.99) (88.32)Net Liability recognised in the Balance Sheet 25.52 2.25


156



Rs. croresParticulars Current Year Previous YearCurrent Service Cost 5.95 5.29Interest Cost 7.24 5.94Expected return on Plan Assets (6.35) (5.35)Actuarial Losses 26.19 3.23Past Service Cost 0.12 0.03Net gratuity expenses included in Payments to &Provision for Employees 33.15 9.14Actual Return on Plan Assets (3.88) 12.52

iii. Reconciliation of Defined Benefit Obligation

Rs. croresParticulars Current Year Previous YearOpening Defined Benefit Obligation 90.57 75.01Current Service Cost 5.95 5.29Interest Cost 7.24 5.94Actuarial Losses 16.02 10.52Benefits Paid (7.27) (6.19)Closing Defined Benefit Obligation 112.51 90.57

iv. Reconciliation of Fair Value of Plan Assets

Rs. croresParticulars Current Year Previous YearOpening Fair Value of Plan Assets 88.32 73.49Expected return on Plan Assets 6.35 5.35Actuarial Gains/(Losses) (10.17) 7.29Contributions by Employer 9.76 8.37Benefits Paid (7.27) (6.18)Closing Fair Value of Plan Assets 86.99 88.32Expected Employer’s contribution next year 11.83 2.60

v. Description of Plan Assets

Particulars Current Year Previous YearGovernment of India Securities 10.06% 14.12%Corporate Bonds 49.48% 37.37%Special Deposit Scheme 0.84% 0.83%Insured Managed Funds 28.72% 40.21%Others 10.90% 7.47%

Grand Total 100% 100%

157



vi. Summary of Actuarial Assumptions


Discount Rate 7.00 % - 8% 7.85 % - 8.3%

Expected rate of return on Assets 7.50 % - 9.15% 7.50 % - 9.15%Salary Escalation Rate 3.00 % - 10% 5.00 % - 10%

Attrition rate 1 – 2 % 1 – 2%

Mortality Published notes under theLIC (1994-96) mortality tables

(e) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising onthe above after allowing for employees contribution is determined as at March 31, 2009, under the basis ofuniform accrual benefit with demographic assumptions taken as Nil is as follows:

i) Amount to be recognised in Balance SheetRs. crores


Present Value of Unfunded Obligation 3.44 3.04

Unrecognised Past Service Cost (2.66) (3.04)Net Liability 0.78 -

ii). Expense to be recognised in the Profit & Loss Account

Rs. crores


Current Service Cost 0.11 -Interest on Defined Benefit Obligation 0.24 -

Net Actuarial Losses / (Gains) recognised in Year 0.05 -

Past Service Cost 0.38 -Total, Included in “Employee Benefit Expense” 0.78 -

iii). Reconciliation of Benefit Obligation & Plan Assets for the period

Rs. crores


Changed in Defined Benefit Obligation

Opening Defined Benefit Obligation 3.04 -Unrecognised Past Service Cost - 3.04Current Service Cost 0.11 -Interest Cost 0.24 -Actuarial Losses / (Gain) 0.05 -Closing Defined Benefit Scheme 3.44 3.04


158


iv) Financial Assumption at the Valuation date


Discount Rate 7.00 % 7.85 %Expected rate of return on Assets 0.00 % 0.00 %


The past service liability is being amortised over the average vesting period of 8.02 years.

(f) Details of unfunded post retirement defined benefit obligation are as follows :-

i. Reconciliation of Defined Benefit Obligation

Rs. crores



Current Service Cost 0.89 5.08Interest Cost 0.53 0.59


Benefits Paid (1.51) (0.79)Closing Defined Benefit Obligation 8.90 6.23


Rs. crores



Interest Cost 0.53 0.59Actuarial (Gain) / Losses 2.76 (1.59)

Net expenses included in Payments to and 4.18 4.08Provision for Employees

(g) Provident Fund

In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee Benefitsnotified by the Companies (Accounting Standards) Rules, 2006, employer established provident fund trusts aretreated as Defined Benefit Plans, since the Company is obligated to meet interest shortfall, if any, with respectto covered employees. According to the Management, the Actuary has opined that actuarial valuation cannotbe applied to reliably measure provident fund liabilities in the absences of guidance from the Actuarial Societyof India. Accordingly, the Company is currently not in a position to provide other related disclosures asrequired by the aforesaid AS 15 read with the Accounting Standards Board Guidance. However, having regardto the position of the Fund (for covered employees) and confirmation from the Trustees of such Fund, provisionhas been made for such shortfall as at the year-end.The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority,promotions and other relevant factors. Experience Adjustments are not disclosed since the information from agroup’s perspective is not readily available with the Company. The above information has been certified by theactuaries and has been relied upon by the Auditors.

159



24. Related Party Disclosures :

(a) Associates

The names of all the associates are given in Note no. 1 (b) (iii) on Page 140

(b) Investing Parties

Singapore Airport Terminal Services Ltd. (SATS)

Malaysian Airline SystemsTourism Resorts Kerala Ltd.

Cigen Corporaton

The Conservation Corporation of South Africa Ltd.

(c) Key Management Personnel.

Key managerial personnel comprise the whole-time directors of the Company, who have the authority andresponsibility for planning, directing and controlling the activities of the Company.

Following are the Key Management Personnel : a) Mr. Raymond N. Bicksonb) Mr. Anil P. Goel

c) Mr. Abhijit Mukerji

(d) The details of transactions with related parties (Associates and investing parties) are as follows :

Rs. crores

Particulars Associates Joint Ventures TotalCY PY CY PY CY PY

Interest paid/provided 2.33 1.75 - - 2.33 1.75Interest received/accrued 5.88 1.40 1.04 0.66 6.92 2.06Dividends received 20.62 8.90 7.50 11.17 28.12 20.07Operating/Licence fees paid 0.15 - - 0.74 0.15 0.74Operating fees received 50.73 49.96 26.15 21.31 76.88 71.27Purchase of goods and services 46.37 40.67 0.21 3.30 46.58 43.97Sale of goods and services 6.39 7.94 1.12 5.81 7.51 13.75Due from / (to) 1.33 (7.46) 1.06 0.97 2.39 (6.49)Sundry Debtors 13.04 8.31 13.53 11.27 26.57 19.58Purchase of shares 102.59 - 1.25 5.03 103.84 5.03Issue of Shares 100.00 - - - 100.00 -Security Deposits - - - 1.50 - 1.50Deposits 67.45 (28.00) 50.45 26.64 117.90 (1.36)

Key managerial Personnel comprise whole time Directors, who have the authority and responsibility for planning,directing and controlling the activities of the Company. The remuneration paid to such directors is disclosed innote 13 of page 97 of the standalone financial statements and the dues from such persons are disclosed infootnotes 1 and 2 (i) of Schedule 8 Current Asset, Loan and Advances forming part of the standalone BalanceSheet.


160


(e) Statement of Material TransactionsRs. crores

Name of Company Current Year Previous YearAssociatesInditravel Pvt. Ltd.- Purchase of Goods & Services 19.20 27.75- Sales of Goods & Services 0.89 0.86- Dividend Received 4.11 0.73- Due to - Current Account - 0.89Oriental Hotels Ltd.- Dividend Received 6.40 5.72- Operating & reimbursement fees 19.95 18.17- Purchase of Goods & Services - 5.67- Sale of Goods & Services 1.98 3.73- ICDs Raised 70.50 43.05- ICDs Repaid 44.00 37.00- Interest paid 0.80 1.35- Interest Received 1.48 -- Deposits Taken 5.00 10.00- Deposits Repaid 15.00 -- Due to – Current Account 0.15 4.96- Sundry Debtors 6.94 6.73- Loan Given 1.00 -- Issue of Shares 50.00 -Piem Hotels Ltd.- Dividend Received 8.81 1.76- Operating Fees Received 27.11 27.89- Interest paid 1.53 0.40- Sale of Goods & Services 1.76 1.92- Deposits Taken - 18.00- Deposits repaid 18.00 -- Due to - Current Account 1.03 3.05- ICDs raised - 39.50- ICDs repaid 9.00 21.50- Sundry Debtors 4.45 1.04- Issue of Shares 50.00 -Taj Air Ltd.- Interest Received 4.18 1.40- Purchase of Goods & Services 24.16 4.78- ICDs Placed 81.00 45.00- ICDs Encashed 17.50 29.00- Sundry Creditors 0.28 -

161



Name of Company Current Year Previous YearAssociatesTaj Trade & Transport Ltd.- Sale of Goods & Services 1.25 0.94- Due from - Current Account - 0.32- Licence Fees paid 0.12 -Benares Hotels Ltd.- Due to - Current Account - 0.20Taj Lanka Resorts Ltd.- Due from - Current Account 0.70 0.49Taida Trading & Industries Ltd- Due from - Current Account 1.03 1.02Taj Enterprise Ltd- Due from - Current Account - 0.21Taj Lanka Hotels Ltd.- Due From – Current Account 1.15 0.74BJETS Pte Ltd.- Purchase of Shares 102.59 -

Joint Ventures

Taj GVK Hotels & Resorts Ltd.

- Deposit Given - 3.72

- Interest Received - 0.26- Operating Fees Received 19.62 16.62

- Dividend Received 5.12 3.58

- Due from - Current Account 1.36 0.14- Sundry Debtors 5.55 6.85

Taj Madras Flight Kitchen Pvt. Ltd.

- Deposits Taken - 1.50

- Due to - Current Account - 1.00

Taj Kerala Hotels & Resorts Ltd.

- Due to – Current Account - 0.28

Taj Karnataka Hotels & Resorts Ltd.

- Deposits Given - 3.21

- Due from - Current Account - 0.18


162


Name of Company Current Year Previous Year

Joint Ventures

Taj Safaris Ltd.

- Purchase of shares - 2.01


Taj Asia Ltd.

- Interest Received - 0.40



- Due from - Current Account - 0.81

- ICDs Placed - 0.18

Taj International Hotels (SA) (Pty) Ltd.


Singapore Airline Terminal Services

- Dividend Paid 3.83 6.55

- Due Fmrom – Current Account - 0.73

Malaysian Airlines Systems

- Dividend Paid - 0.95

Cigen Corporation

- Purchase of Shares - 3.02

Tourism Resorts Kerala Ltd.

- Licence Fees Paid 0.44 -

The Conservation Corporation of South Africa Ltd.

- Due to – Current Account - 1.41

25. Segmental Information:

The Group regards the business segment as the primary segments. The business segments have been classified asfollows:

• Hoteliering

• Air Catering

• Others – comprising of Food Processing and Investing activities.

163



The disclosure in respect of the above business segments are as under:

Business Segments

Rs. crores

Particulars Hoteliering Air Catering Others Total

CY PY CY PY CY PY CY PY

Segment Revenue 2,364.25 2,641.15 281.65 298.87 59.24 25.93 2,705.14 2,965.95

Dividend 48.74 7.55

Profit on sale of Assets 2.71 -

Profit on sale of investments 0.04 39.12

Total Revenue 2,756.63 3,012.62

Segment Results 306.23 713.17 36.19 62.91 2.53 (5.75) 344.95 770.33

Add: Unallocable Income 48.78 46.67

Interest (net) 230.46 202.32

Profit before tax andExceptional Item 163.27 614.68

Exceptional Item 4.76 54.16

Profit before tax 158.51 560.52

Provision for tax 155.77 246.98

Profit after tax 2.74 313.54

Segment Assets 5,841.45 4,717.17 239.08 213.95 129.97 69.20 6,210.50 5,000.29

Unallocated Assets 2,949.72 1,848.47

Total Assets 9,160.22 6,848.77

Segment Liabilities 700.91 618.41 51.15 52.38 28.76 11.16 780.82 681.95

Unallocated Liabilities(including Minority interest) 5,081.51 3,897.72

Total Liabilities 5,862.33 4,579.67

Other Information

Depreciation 172.33 154.46 14.87 11.73 1.33 1.43 188.53 167.62

Significant non-cash expenditureother than depreciation 8.58 5.50 4.32 1.12 - 0.36 12.90 6.98

Capital Expenditure 501.67 410.59 67.78 9.34 0.72 1.38 570.17 421.31


164


The disclosures in respect of the above geographic segments are as under :

Geographic Segments

Rs. crores

Particulars Domestic International Total

CY PY CY PY CY PY

Segment Revenue 2,033.53 2,167.68 671.61 798.27 2,705.14 2,965.95

Segment Assets 3,429.33 2,928.21 2,781.17 2,072.08 6,210.50 5,000.29

Capital Expenditure 521.53 163.34 48.64 257.97 570.17 421.31

Figures pertaining to Subsidiaries and Jointly Controlled Entities have been reclassified wherever necessary in orderto conform to the presentation in the Company’s financial statements.

26. Earnings Per Share (EPS) :

Earnings per share is calculated in accordance with Accounting Standard 20 – ‘Earnings Per Share’ as notified by theCompanies (Accounting Standards) Rules, 2006.


Profit after tax after Minority Interest and Share of Profits 12.46 354.98of Associates (Rs. crores)

No. of Equity Shares – Basic and Diluted 71,35,64,442 65,43,30,117

Earnings Per Share – Basic and Diluted (In Rupees) 0.17 5.43

Note: Since the exercise price of the Warrants Option issued by the Company is more than the fair value of the EquityShares, these have not been considered for the calculation of Diluted Earnings per shares being anti-dilutive in natureas at the year end.

27. Previous year’s figures have been regrouped wherever necessary to conform to the current year’s presentation.






165


Notes


166

Notes

IHCL Annual Report 2008-2009.pd - domain-b. · PDF fileThe Hongkong & Shanghai Banking...

Documents

Transcript of IHCL Annual Report 2008-2009.pd - domain-b. · PDF fileThe Hongkong & Shanghai Banking...