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Directors Report of Oriental Hotels Ltd.

Mar 31, 2017

The Directors are pleased to present the 47th Annual Report of the Company along with the audited financial statements for the financial year ended March 31, 2017.

Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (”Ind AS ”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. Financial statements for the year ended and as at March 31, 2016 have been restated to conform to Ind AS.

1. Financial Results

Particulars

Year Ended March 31, 2017 Rs. in Lakhs

Year Ended March 31, 2016 Rs.in Lakhs

Gross Revenue

34,460

31,626

Profit before Depreciation, Finance cost and Tax

5,874

3,584

Profit/(Loss) before Exceptional Items and Tax

156

(1,965)

Exceptional Items (net)

42

(633)

Profit/(Loss) Before Tax

199

(2,598)

Tax Expense:

-Current Tax

180

105

-Deferred Tax

(135)

(919)

Profit/(Loss) After Tax

153

(1,785)

Earnings per share (Rs.)

0.09

(1.00)

State of Company’s affairs Operating Results

The Revenue from operations amounts to Rs.33,349 lakhs for the period ended March 31, 2017, increased by Rs.2,401 lakhs (7.76%) as compared to previous year.

Room Income stood at Rs.16,354 lakhs, an increase of Rs.1257 lakhs (8.33%) compared to previous year. The F&B Income increased by ''626 lakhs compared to previous year.

Total expenditure for the period ended as at March 31, 2017 amounted to Rs.34,304 lakhs, increased by Rs.712 lakhs (2.12%) as compared to previous year.

The Profit (EBITDA) before depreciation, finance cost & Tax for the year ended March 31, 2017 amounted to Rs.5,874 lakhs, increased by Rs.2,290 lakhs (64%) compared to previous year.

The Profit before exceptional item(s) for the year ended March 31, 2017 amounted to Rs.156 lakhs as against a loss of Rs.1,965 lakhs of the previous year.

The taxation expense (including deferred tax) for the year ended March 31, 2017 amounted to Rs.45 lakhs. The Profit after Tax for the year ended March 31, 2017 stood at v153 lakhs as against a loss of Rs.1,785 lakhs of the previous year.

NCD redemption reserve for the year ended March 31, 2017 amounted to Rs.2007 lakhs after the transfer of Rs.153 lakhs to the debenture redemption reserve during the year. No transfer was made to General Reserve during the year ended March 31, 2017.

Dividend

Considering the capital requirement to maintain the Debenture Redemption Reserve to the tune of 25% of value of debentures and due to inadequate profits in the reserves, the Board do not recommend any dividend on equity shares for the period ended on March 31, 2017.

Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2017 was Rs.1,759 lakhs comprising of 17,85,99,180 Equity Shares having face value of Rs.1 each. The Company has not issued any equity shares during the financial year 2016-17.

Borrowings

The Company’s borrowings as at March 31, 2017 on a standalone basis stood at Rs.32,232 lakhs as against Rs.31,742 lakhs as at March 31, 2016 and on a consolidated basis borrowings stood at Rs.32,232 lakhs as on March 31, 2017 as against Rs.31,742 lakhs as compared to the previous year.

Non-Convertible Debentures (NCDs)

During the year the Company has neither issued nor redeemed any NCDs. As on March 31, 2017, the outstanding NCDs amounts to Rs.20,000 lakhs comprising of 1000, ‘Series - A Senior Secured Redeemable Non Convertible Debentures’ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 10.25% per annum and 1000, ‘Series - B Senior Secured Redeemable Non Convertible Debentures’ having of face value Rs.10 lakhs aggregating to Rs.10,000 lakhs with coupon rate of 2% at an yield to maturity rate of 10.25% per annum. The NCDs are listed in the Wholesale Debt Market (WDM) segment at National Stock Exchange of India Ltd.

Fixed Deposits

The Company has not accepted any public deposit and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet. Acceptance and renewal of fixed deposits were discontinued with effect from February 17, 2003 and July 2009 respectively.

Particulars of Loans, Guarantees and Investments of the Company under Section 186 of the Act

The Company has not given any loans or provided any security during the financial year under review. The particulars of existing loans and investments have been disclosed under notes to financial statements.

Dividend Distribution Policy

As per regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations 2015, top 500 listed companies (based on market capitalization of every financial year) shall formulate a Dividend Distribution Policy, which shall be disclosed in their annual reports and on their website. Your Company has adopted this policy on voluntary basis as part of its corporate governance practices.

The policy is given in the Annexure 2 to this report and is also available on the Company’s website, at http://orientalhotels. co.in/wp-content/uploads/2017/05/OHL_Dividend_ Distribution_Policy.pdf

Business Overview

The Indian Travel and Tourism Industry has been instrumental to the nation''s economic growth. Over the years, it has also emerged as a significant source of foreign exchange and a large employment generator.

India’s Travel & Tourism sector ranks 7th in the world in terms of its total contribution to the country’s GDP, shows a new report by the World Travel & Tourism Council (WTTC). According to the new data, Travel & Tourism generated INR14.1 trillion (USD208.9 billion) in 2016, which is the world’s 7th largest in terms of absolute size, the sum is equivalent to 9.6% of India’s GDP. Additionally, the sector supported 40.3 million jobs in 2016, which ranks India 2nd in the world in terms of total employment supported by Travel & Tourism. The sector accounts for 9.3% of the country’s total jobs. India’s Travel & Tourism sector was also the fastest growing amongst the G20 countries, growing by 8.5% in 2016. A further 6.7% growth is forecast for 2017. India’s strong Travel & Tourism figures are predominantly generated by domestic travel, which accounts for 88% of the sector’s contribution to GDP in 2016.

Financial information of Subsidiary & Associates

The Consolidated Financial Statements of the Company and its subsidiary/associates, are prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Companies (Indian Accounting Standards), Rules, 2015 of the Companies Act, 2013, and form part of the Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of the subsidiary, may be accessed on Company’s website at the link: http://www.orientalhotels.co.in/investors/financial-results/annual/. The documents will also be kept at the Registered Office of the Company, and will be available to members seeking information at any time.

The Company is having an overseas subsidiary as on March 31, 2017 and there has been no material change in the nature of business of subsidiary. The Minutes of the Subsidiary Company along with the financial statements were placed and reviewed by the Board of Directors.

Salient features pertaining to Subsidiary / Joint Venture / Associate as required by Sub-Section 3 of Section 129 of the Companies Act, 2013 (‘Act’) read with Rule 5 of Companies (Accounts) Rules, 2014 is furnished hereto in the Annexure-1.

Related Party Transactions

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All Related Party Transactions are placed before the Audit Committee for approval. A statement containing the details of all Related Party Transactions has been placed before the Audit Committee for its review on a quarterly basis.

The Policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board may be accessed on Company’s website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/ RELATED-PARTY-TRANSACTIONS-POLICY.pdf

Disclosures as required under Ind-AS 24 in respect of Related Party Transactions have been made under Note 43 of the Notes to the standalone financial statements. There were no transactions during the year which would require disclosure in Form AOC 2.

Risk Management

The Company has constituted a Risk Management Committee voluntarily as a measure of good governance and management practice. The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Company’s competitive advantage. The risk framework defines the risk management approach across the Company at various levels including documentation and reporting.

The Policy framework enables the Company to evaluate risks, appropriately rate these risks and grade the same in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

The Company has laid down procedures to inform Audit Committee as well as the Board of Directors about the risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.

Directors and Key Managerial Personnel (KMP)

The Board of Directors based on the recommendations of Nomination and Remuneration Committee (NRC) appointed Mr. Phillie Dara Karkaria as an Additional Director under the category of Independent Director with effect from January 23, 2017. He holds office upto the date of the forthcoming Annual General Meeting and is further proposed to be appointed as Independent Director of the Company for a period of five years commencing from his date of appointment.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with provisions under the Companies Act, 2013 and Articles of Association of the Company, Mr. Rakesh Kumar Sarna retires by rotation and is being eligible for re-appointment.

Mr. Anil P Goel, a Non-Executive Director on the Board of the Company representing Indian Hotels Company Ltd (IHCL) had resigned from the Board with effect from October 15, 2016 due to his retirement from IHCL.

Mr. D R Kaarthikeyan, one of the Independent Directors on the Board of the Company had resigned from the Board, with effect from October 5, 2016.

Mr. Mohan Jayaraman, Chief Financial Officer and one of the Key Managerial Personnel of the Company had resigned with effect from September 16, 2016. Consequent to the resignation of Mr. Mohan Jayaraman, the Board on the recommendation of the Nomination and Remuneration Committee appointed Mr. Rajneesh Jain as Chief Financial Officer with effect from September 17, 2016 and designated him as one of the Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013.

Board and Committee Meetings

The Board of Directors has met four (4) times during the year mainly to review and consider the quarterly financial results of the Company. Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Director’s Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2016 - 17.

Accordingly, pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2017 and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they had prepared the annual accounts on a going concern basis;

v. they have laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Controls Systems and Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.

Internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Vigil Mechanism / Whistle Blower Policy

The Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The whistle blower policy may be accessed on the Company’s website at the link: http://orientalhotels.co.in/wp-content/uploads/2017/01/WHISTLE-BLOWER-POLICY-AND-VIGIL-MECHANISM.pdf

Significant and Material Orders passed by the Regulators

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.

Corporate Social Responsibility

Your Company is intrinsically associated with the society and environment by upholding its businesses with transparency and commitment. It has evolved an approach to leverage CSR as a potent, long-term goal towards ‘Value Creation’ for all its stakeholders.

Your Company works towards facilitating sustainable livelihoods by providing adequate opportunities to the youth of rural and less-privileged sectors of society. Your Company''s hotel units, which are in smaller cities, are engaged in community initiatives such as education and nutritional awareness. The units have consumed home made local produces from self-help groups, without compromising the product quality.

During the year company has constituted a Corporate Social Responsibility Committee comprising of Mr. Vijay Sankar, Independent Director, Mr. D Vijayagopal Reddy, Non-executive Director and Mr. Pramod Ranjan, Managing Director to administer the CSR activities of the Company.

The Company does not fall under the category of companies required to spend the prescribed amount towards CSR activities due to the losses suffered by the Company. However, the Company had spent Rs.34 lakhs during the financial year 2016 - 17 on a voluntary basis, through its various hotel units towards education and other social welfare measures which includes payment of school fees, distributing rice to the fisherman’s family during the non-fishing period etc.,

Policies

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (http://orientalhotels. co.in/investors/policies). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

In addition to the Code of Conduct, key policies that have been adopted by the Company are as follows:

Name of the Policy

Brief Description

Web link

Whistleblower Policy (Policy on vigil mechanism)

The Company has adopted the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company’s code of conduct and ethics. There has been no change to the Whistleblower Policy adopted by the Company during fiscal 2016-17.

http://orientalhotels.co.in/wp-content/

uploads/2017/01/WHISTLE-BLOWER-

POLICY-AND-VIGIL-MECHANISM.pdf

Policy on Material Subsidiaries

The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them.

http://orientalhotels.co.in/wp-

content/uploads/2017/01/POLICY-

FOR-DETERMINING-MATERIAL-

SUBSIDIARIES.pdf

Related Party Transaction Policy

The policy regulates all transactions between the Company and its related parties

http://orientalhotels.co.in/wp-content/

uploads/2017/01/RELATED-PARTY-

TRANSACTIONS-POLICY.pdf

Code of Conduct for Prevention of Insider Trading

The policy provides the framework in dealing with securities of the Company.

http://orientalhotels.co.in/wp-content/ uploads/20 17/0 2/C ODE- OF-CONDUCT-FOR-PREVENTION-OF-INSIDER-TRADING.pdf

Code of Corporate Disclosure Practices

This provides clear guidelines for timely, adequate and universal dissemination of information and disclosure of Unpublished Price Sensitive Information

http://orientalhotels.co.in/wp-

content/uploads/2017/01/CODE-

OF-CORPORATE-DISCLOSURE-

PRACTICES.pdf

Policy for Determining Materiality for Disclosures

This policy governs the determination of materiality of an event or information for the purpose of disclosures to be made by the Company to the Stock Exchanges. This policy has to be read in congestion with the code of corporate disclosure practices framed by the company under Insider Trading Regulation

http://orientalhotels.co.in/wp-content/

uploads/2017/01/POLICY-ON-

MATERIALITY-OF-EVENTS.pdf

Website Archival Policy

The policy deals with the retention and archival of corporate records from the website of the Company.

http://orientalhotels.co.in/wp-content/uploads/2017/02/WEBSITE-ARCHIVAL-POLICY.pdf

Dividend Distribution Policy

Guidelines for the Board and the Management in declaration and distribution of dividend, with a view to ensure fairness, transparency, sustainability and consistency in the decision for distributing profits to shareholders.

http://orientalhotels.co.in/wp-content/ uploads/2017/05/OHL Dividend Distribution Policy.pdf

Remuneration Policy

The Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act.

The key principles governing the Company’s Remuneration Policy are as follows:

Remuneration for Independent Directors and Non-Independent Non-Executive Directors

- Independent Directors (ID) and Non-Independent Non-Executive Directors (NINED) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members, and receive commission within regulatory limits, as recommended by the NRC and approved by the Board.

- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company, taking into consideration the challenges faced by the Company and its future growth imperatives.

- Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Company’s operations and the Company’s capacity to pay the remuneration and be consistent with recognized best practices.

- The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee Meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.

- The remuneration payable to Directors shall be inclusive of any remuneration payable for services rendered in any other capacity, unless the services rendered are of a professional nature and the NRC is of the opinion that the Director possesses requisite qualification for the practice of the profession.

Remuneration for Managing Director (MD)/ Key Managerial Personnel (KMP)/ rest of the Employees

- The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Company’s operations and the Company’s capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.

- Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings. The Company also provides all employees with a social security net subject to limits, by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death etc. The Company provides retirement benefits as applicable.

- In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, the Company provides MD, such remuneration by way of commission, calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD would be based on performance as evaluated by the NRC and approved by the Board.

- The Company provides the management employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the Company.

It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of the Company.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules’), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on our website, at http://orientalhotels.co.in/ investors/unclaimed-amounts/transfers-to-iepf/

Evaluation of Board of Directors

The Board of Directors of the Company presently comprises nine (9) Non-Executive Directors and one Executive Director viz., the Managing Director. The Directors appointed on the Board are from diverse fields relevant to the Company’s business, having long-standing experience and expertise in their respective fields. They have considerable experience in managing large corporate and have been in public life for decades.

Non-Executive Directors add substantial value through the deliberations at the meetings of the Board and Committees thereof. To safeguard the interests of the investors, they also play a control role in important Committees of the Board such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee etc., the Directors play an important role by contributing to the deliberations of the Committee Meetings. Besides contributing at the meetings of the Board and Committees, the Non-Executive Directors also have off-line deliberations with the Management of the Company and add value through such deliberations.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive and non-executive directors.

Listing

The Equity Shares of your Company are listed at BSE Limited, Mumbai (BSE) and the National Stock Exchange of India Limited, Mumbai (NSE) and the Global Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange. NCD’s issued by the Company are listed at the Wholesale Debt Market (WDM) segment of NSE. The Listing fees to these Stock Exchanges and custodian fees to depositories viz., NSDL and CDSL have been paid by the Company for the financial year 2017-18.

Auditors and Auditor’s Report

(i) Statutory Auditors:

The tenure of present statutory auditor of the Company M/s SNB Associates, Chartered Accountants (Firm Registration No: 015682N) shall end at the conclusion of ensuing AGM to be held on July 25, 2017. Taking into account that M/s SNB Associates, Chartered Accountants, have completed the maximum tenure permissible under the Companies Act, 2013, in line with the requirement of rotation of auditors prescribed under Section 139(2) of the Companies Act, 2013, the Board based on the recommendation of Audit Committee and subject to the approval of Members approved the appointment of M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants, (Firm Registration No.: 003990S/ S200018) as Statutory Auditors of the Company for a term of 5 years commencing from the conclusion of the ensuing AGM. M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants have confirmed their willingness, to act as statutory auditors and further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014. The Board recommends the appointment of M/s. PKF Sridhar and Santhanam LLP, Chartered Accountants as Statutory Auditors for the consideration of shareholders in the ensuing AGM to be held on July 25, 2017. The Board of Directors places on record its appreciation for the service rendered by M/s SNB Associates, Chartered Accountants as the statutory auditor of the Company.

The notes on financial statement referred to in the Auditor’s Report are self explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation, adverse remark or disclaimer

(ii) Secretarial Auditors:

Pursuant to provisions under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. S Sandeep & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2017. The Secretarial Audit Report is attached as Annexure 1.

The Auditors’ Report and Secretarial Audit Report for the financial year ended March 31, 2017 do not contain any qualification, reservation, adverse remark or disclaimer.

Corporate Governance Report, Management Discussion & Analysis Report

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Management Discussion & Analysis, Corporate Governance as well as the Auditor’s certificate on the compliance of Corporate Governance thereon are attached and form part of the Annual Report.

Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 is furnished in the Annexure 3 to this report:

Particulars of Employees & Remuneration

The information required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 4 to this report.

The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure forming part of the Report. In terms of the first proviso to section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace.

During the year under review there were no complaints on sexual harassment reported.

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Extract of the Annual Return in Form MGT 9 is attached as Annexure 5 to this report.

Acknowledgement

The Directors thank the Company’s employees, customers, vendors, investors and bankers for their continued support during the year.

For and behalf of the Board

Rakesh Sarna

Place: Chennai (DIN:01875340)

Date: May 12, 2017 Chairman


Mar 31, 2015

To the Members:

The Directors are pleased to present the 45th Annual Report of the Company together with its Audited Statement of Profit & Loss for the year ended March 31, 2015 and the Balance Sheet as on that date

1. Financial Results

Particulars Year Ended Year Ended March 31, 2015 March 31, 2014 Rs in Lakhs Rs in Lakhs

Profit before Depreciation, finance 4,950 4,692 cost & Tax

Finance Cost 3,005 2,942

Depreciation and amortization expenses 2,548 2,794

Profit/(Loss) before Tax and Exceptional Items (603) (1,044)

Exceptional Items - -

Profit/(Loss) Before Tax (603) (1044)

Less:

Provisions for tax

- Current 114 66

- Minimum Alternate Tax credit entitlement - -

- Deferred Tax (376) (390)

- Tax related to previous years (42) -

Profit/(Loss) After Tax (299) (720)

Balance brought forward from previous year 3,145 5,848

Distributable profit 3,145 5,848

Dividend 714 982

Tax on dividend 146 167

Amount transferred:

- General Reserve - -

- Debenture Redemption Reserve 1,853 834

Balance carried forward 2,053 3,145

Earnings per share (Rs.) (0.17) (0.40)

The country witnessed an increase in supply of 4.4% between April to March 2015, demand for same period increased by 7.8% over the previous year. South India witnessed a supply growth of 4% and demand by 12%. The overall Country's Average room rate during the period stood at Rs.5585/- representing a decline of 1% over previous year. Average Room Rate across the Company's hotels has increased by Rs.253/- (4.48%) from Rs.5647/- to Rs.5900/- as compared to previous year. The Company occupancy (%) percentage of the hotel units was at 63% for the year under review as against 65% of the previous year.

Operating Results

The Company achieved a turnover of Rs.30,672 lakhs for the period ended March 31, 2015; increased by Rs.437 lakhs (1.44%) as compared to previous year.

Room Income stood at Rs.14,327 lakhs had results an increase of Rs.253 lakhs (1.80%) of the previous year. The F&B Income decreased by Rs.280 lakhs (2.06%) of the previous year.

State of Company's affairs

Total expenditure for the period ended as at March 31, 2015 amounted to Rs.25,722 lakhs, increased by Rs.180 lakhs (0.70%) as compared to previous year.

The Profit (EBITDA) before depreciation, finance cost & tax for the year ended March 31, 2015 amounted to Rs.4,949 lakhs, increased by Rs.257 lakhs (5.48%) of the previous year.

The Loss before exceptional item(s) for the year ended March 31, 2015 amounted to Rs.603 lakhs as against a loss of Rs. 1044 lakhs of the previous year.

The taxation expense (including deferred tax) for the year ended March 31, 2015 amounted to (Rs.303) lakhs. The Loss after Tax for the year ended March 31, 2015 stood at Rs.299 lakhs as against a loss of Rs.719 lakhs of the previous year. No transfer was made to General Reserve and created a NCD redemption reserve to the tune of Rs. 1853 lakhs during the financial year along with the write back of Rs. 1853 lakhs created earlier for NCD's which were redeemed during the year on maturity.

Dividend

Your Directors recommended a dividend of Rs.0.40 (40%) per equity share of Rs. 1/- each for the financial year ended March 31, 2015. The total amount of dividend outgo for the financial year 2014-15 will be Rs.860 lakhs comprising of Rs.714 lakhs as dividend and Rs. 146 lakhs as tax on dividend as against Rs. 1149.24 lakhs comprising of Rs.982.30 lakhs as dividend and Rs.166.94 lakhs as tax for the previous year. The dividend if approved, in the forthcoming Annual General Meeting will be paid within 30 days thereof to the Members whose name appears in the Registrar of Members as on July 24, 2015 and the proposed date of payment will be notified to the Stock Exchanges for publication.

Capital Expenditure

During the year under review, the Company incurred Rs.1913 lakhs towards capital expenditure. Jiva Spa at Taj Coromandel, Chennai was commissioned during the year.

Borrowings

The Company's borrowings as at March 31, 2015 on a standalone basis stood at Rs.31,097 lakhs as against Rs.30,756 lakhs as at March 31, 2014 and on a consolidated basis borrowings stood at Rs.34,820 lakhs as on March 31, 2015 as against Rs.24,734 lakhs as compared to the previous year.

Non Convertible Debentures (NCD)

The Company had redeemed NCDs aggregating to Rs.1,000 lakhs and paid the principal and the interest thereof during the financial year 2014-15.

The Company also issued during the year 'Series-A Senior Secured Redeemable Non Convertible Debentures' having of face value Rs.10 lakhs aggregating to Rs. 1000 lakhs with coupon rate of 10.25% per annum and 'Series-B Senior Secured Redeemable Non Convertible Debentures' having of face value Rs. 10 lakhs aggregating to Rs. 1000 lakhs with coupon rate of 2% at an yield to maturity rate of 10.25% per annum together aggregating to Rs.2000 lakhs for a period of five years. The said debentures are listed in the Wholesale Debt Market (WDM) segment at National Stock Exchange of India Ltd.

Fixed Deposits

The Company has not accepted any public deposit or renewed of the same during the period under review. Acceptance of fixed deposits was discontinued effective February 17, 2003 and also discontinued renewal of Fixed Deposits with effect from July 2009. The Liability on account of unclaimed Fixed Deposits amounts to Rs.0.45 lakhs as on March 31, 2015 as against Rs.3.55 lakhs as on March 31, 2014.

Business Overview

Tourism in India has gained acceptance as a potent engine for inclusive socio-economic growth, since it has potential to stimulate other economic factors through its forward and backward linkages and ability to create more employment due to its multiplier effect on the economy.

The year 2014 witnessed a growth of 10.6% of Foreign Tourist Arrivals and the Foreign Exchange Earnings from tourism during the year 2014 grew by 11.5%. The Government of India launched Tourist Visa on Arrival enabled with Electronic Travel Authorisation Scheme in the month of November 2014, resulted an increase in foreign tourist arrivals.

There are many other factors of recessionary economic environment coupled with unprecedented in supply has eroded the room rates and inflationary push of operating cost thereby adversely impacted the profitability of the Company. The Company has initiated variety of steps in the recent past to address the challenges of market dynamics. Such measures are combination of cut back on fresh capital commitments, cost rationalization, continued investments behind customer engagement and brand building which will, in our view bear fruit in the years to come.

Financial information of Subsidiary, Associate & Joint venture

The Consolidated Financial Statements of the Company and its subsidiary, is prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The annual accounts of the subsidiary and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary company and will be available to members seeking information at any time.

Salient features pertaining to Subsidiary / Joint Venture / Associate as required by Sub-Section 3 of Section 129 of the Companies Act, 2013 ('Act') read with Rule 5 of Companies (Accounts) Rules, 2014 is furnished hereto in the Annexure-1.

Up-gradation and expansion

The Company at its unit 'Taj Coromandel' commissioned Jiva SPA facility at a capital cost of Rs.1,158 lakhs during the year. Board of Directors

The Board of Directors has met four (4) times during the year on a quarterly basis to review and consider the quarterly audited financials of the Company and the meeting dates are provided in the Corporate Governance report.

Mr. Rakesh Kumar Sarna, was appointed as a director by the Board w.e.f. October 23, 2014. Mr. Raymond Bickson, Director and Mr. Venu Srinivasan, Director resigned from the Board, w.e.f. August 11, 2014 and September 1, 2014 respectively.

Mr. Pramod Ranjan and Mr. Ramesh D. Hariani, Directors retire by rotation and are being eligible for re-appointment. Mr. Anil P Goel, who was appointed as a Director in the casual vacancy under the applicable provisions of the Act and Articles of Association, holds office up to the date of the AGM and is eligible for appointment. The Company was in receipt of a notice proposing his candidature. Mr. D.Varada Reddy, Managing Director announced his wish to step down as Managing Director on completion of his tenure on November 10, 2015.

The Key Managerial Personnel of the Company presently are Mr. D.Varada Reddy, Managing Director, Mr. Mohan Jayaraman, Chief Financial Officer and Mr. K.C.Raman, Company Secretary.

Director's Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory & secretarial auditors the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014 - 15.

Pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2015 and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they had prepared the annual accounts on a going concern basis;

v. they have laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Controls and Systems

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.

Internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Details of Significant and Material Orders

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.

Independent Directors Declaration as per Section 149 of the Act

The declarations received from the Independent Directors pursuant to Section 149 of the Act, were taken on record by the Board.

Qualification, Reservation or adverse remark or disclaimer on Auditor's Report and Secretarial Audit Report

The auditors of the Company have reported a subject as a matter of emphasis in their stand alone auditor's report (Point No.8) dated May 15, 2015 to the members of the Company. The Company has filed requisite applications to the Ministry of Corporate Affairs, after obtaining the members approval for payment of excess remuneration to the Managing Director by passing a special resolution and the approval from Central Government is awaited.

The secretarial audit report dated May 15, 2015 pursuant to the Act and the listing agreement gives certain remarks and these are addressed as indicated hereafter: (a) The Company is in the process of appointing an independent director (woman) to comply with listing agreement (b) a Risk Management Committee has since been constituted on May 15, 2015 (c) the opposite transactions having a net effect of 0.05% of the total share capital of the Company were entered into inadvertently, no such future transactions shall be carried out and there will be strict adherence to the code henceforth.

Particulars of Loans, Guarantees and Investments of the Company under Section 186 of the Act.

The Company during the year has made an additional investment Rs.2.40 lakhs towards acquiring 24,000 equity shares in Green Infra Wind Generation Ltd. The Company also renewed the Inter Corporate Deposit amounting to Rs.560 lakhs placed with Taj Karnataka Hotels and Resorts Ltd. The Company made an investment of Rs.63.34 lakhs (115163 CCDs @ Rs.55/-) representing compulsorily convertible debentures in The Indian Hotels Company Limited, which are convertible in to equity shares of Rs. 1/- within eighteen months from the date of allotment.

Particular of Related Party Contracts and other arrangements under Section 188 of the Act.

All Related Party Transactions that were entered into during the financial year were on an armRs.s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. Suitable disclosures as required under AS-18 have been made in Note. 39 of the notes to the Standalone Financial Statements.

The Company has adopted a Related Party Transactions Policy. The Policy as approved by the Board, is uploaded on the Company's website at the web link: http://www.orientalhotels.co.in/uploading/OHL_RPT_Policy_Final.pdf

Implementation of Risk Policy

Pursuant to Clause 49 of the listing agreement, the Company has framed a Risk Management Policy and a Risk Committee is being constituted. The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Company's competitive advantage. The risk framework defines the risk management approach across the Company at various levels including documentation and reporting.

The Policy framework enables the Company to evaluate risks, appropriately rate these risks and grade the same in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

Existing control measures are evaluated against Critical Success Factors (CSFs) and Key Performance Indicators (KPIs) identified for those specific controls. Guiding principles to determine the risk consequence (impact), probability of occurrence (likelihood factor) and mitigation plan effectiveness.

Corporate Social Responsibility

Your Company is intrinsically associated with the society and environment by upholding its businesses with transparency and commitment. It has evolved an approach to leverage CSR as a potent, long-term goal towards 'Value Creation' for all its stakeholders.

Your Company works towards facilitating sustainable livelihoods by providing adequate opportunities to the youth of rural and less-privileged sectors of society. Your Company hotel units, which are in smaller cities, are engaged in community initiatives such as education and nutritional awareness. The units have consumed homemade local produces from self-help groups, without compromising the product quality.

The Company voluntarily, through its unit namely Vivanta by Taj - Fisherman's Cove, Kovalam had spent Rs.22.79 lakhs during the financial year 2014 - 15 towards payment of school fees, distributing rice to the fisherman's family during the non-fishing period as declared by the Government. The 'Taj Clinic' provides free medical consultation and medicines to the residents of nearby hamlets.

Nomination & Remuneration Committee

The information pertains to Nomination and Remuneration Committee is furnished in the Corporate Governance Report, which forms part of this report.

Remuneration Policy

The remuneration policy of the Company is governed by the operating agreement(s). The operating policy adopted by the Company covers the terms of appointment such as qualifications, positive attributes and independence of a director, remuneration for the directors, key managerial personnel and other employees as per the applicable provisions of the Act, and the listing agreement. Further, functions of the Human Resource Department of the Company are governed by the "Taj HR Policy Manual Process & Guidelines". The details of the remuneration paid to the Managing Director of the Company which was approved by the members as minimum remuneration pursuant to the applicable provisions of the Act, is also furnished.

Evaluation of Board of Directors

The Board of Directors of the Company presently comprises ten (10) Non-Executive Directors and one (executive) Managing Director. The Directors appointed on the Board are from diverse fields relevant to the Company's business, having long-standing experience and expertise in their respective fields. They have considerable experience in managing large corporate and have been in public life for decades.

Non-Executive Directors add substantial value through the deliberations at the meetings of the Board and Committees thereof. To safeguard the interests of the investors, they also play a control role. In important Committees of the Board such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee etc., the Directors play an important role by contributing to the deliberations of the Committee Meetings. Besides contributing at the meetings of the Board and Committees, the Non-Executive Directors also have off-line deliberations with the Management of the Company and add value through such deliberations.

Subsidiary Company

The Company is having an overseas subsidiary as on March 31, 2015 and there has been no material change in the nature of business of subsidiary. As required under the listing agreement, the consolidated financial statement of the Company is attached, which was prepared in accordance with relevant accounting standards as prescribed under Section 133 of the Act. The consolidated financials disclose the assets, liabilities, income, expenses and other details. The Minutes of the Subsidiary Company along with the financial statements were placed and reviewed by the Board of Directors.

Listing

The Equity Shares of your Company are listed at BSE Limited, Mumbai and the National Stock Exchange of India Limited, Mumbai and the Global Depositary Receipts (GDRs) are listed at Luxembourg Stock Exchange. NCD's issued by the Company during the year are listed at National Stock Exchange of India Limited in the Wholesale Debt Market (WDM). The Listing fees to these Stock Exchanges and custodian fees to NSDL and CDSL have been paid by the Company for the financial year 2015-16. Madras Stock Exchange have approved the delisting and the shares of the Company w.e.f December 9, 2014.

Auditors

Messrs Brahmayya & Co, Chartered Accountants and SNB Associates, Chartered Accountants, who are the Joint Statutory Auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re- appointment. Pursuant to the provisions of section 139 of the Act and the rules there-under, it is proposed to appoint Messrs Brahmayya & Co, Chartered Accountants (Firm Registration No:000511S) and SNB Associates, Chartered Accountants, (Firm Registration No:015682N) who are the Joint Statutory Auditors of the Company from the conclusion of the 45th Annual General Meeting up to the conclusion of the forty seventh (47th) Annual General Meeting to be held in 2017 (subject to ratification of their appointment at the AGM to be held in 2016).

Staff

The Directors expressed their appreciation for the contribution made by the employees in the progress of the Company. Corporate Governance Report, Management Discussion & Analysis Report

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion & Analysis, Corporate Governance as well as the Auditor's certificate on the compliance of Corporate Governance thereon are attached and form part of the Annual Report.

Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and outgo

The information required under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 is furnished in the Annexure 2 to this report:

Particulars of Employees & Remuneration

The information required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 3 to this report.

The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in the Annexure forming part of the Report. In terms of the first proviso to section 136 of the Act, the Report and accounts are being sent to the members excluding the aforesaid Annexure. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Extract of Annual Return

The Extract of the Annual Report under Section 92 of the Act, is being furnished as an Annexure 4 to this report. Acknowledgement

The Directors thank the Company's customers, vendors, investors and bankers for their continued support during the year.

For and behalf of the Board of Directors

Place: Chennai Rakesh Kumar Sarna (DIN:01875340) Date: May 15, 2015 Chairman


Mar 31, 2013

To the Members:

The Directors are pleased to present the 43rd Annual Report of the Company together with its Audited Statement of Profit & Loss for the year ended March 31, 2013 and the Balance Sheet as on that date.

Financial Results

Year Ended Year Ended Particulars March 31, 2013 March 31, 2012 Rs. in Lakhs Rs. in Lakhs

Profit before depreciation, finance cost & Tax 5345 5771

Finance Cost 2774 1935

Depreciation and amortization expenses 2617 1955

Profit/(Loss) before tax and exceptional items (46) 1881

Exceptional Items 1436

Profit Before Tax 1390 1881

Less:

Provisions for tax

- Current 276 383

- Minimum Alternate tax credit entitlement (185) (383)

- Deferred Tax (224) 618

- Ta x related to previous years 93

Profit After Tax 1430 1263

Balance brought forward from previous year 6551 6537

Distributable profit 7981 7800

Dividend 982 804

Ta x on dividend 167 130

Amount transferred:

- General Reserve 150 130

- Debenture Redemption Reserve 834 185

Balance carried forward 5848 6551

Earnings per share (Rs.) 0.80 0.71

Operating Results

The Average Room Rates (ARR) across the key domestic markets declined by 4% in the year 2012-13 as compared to the previous year, because of increase in supply. The ARR of the Company for the year was at Rs.6,050/- against Rs.6,314/- of the previous year.

The occupancy level across the units of the Company remained at 64% despite an increase of 14% in the inventory of the Company from 925 rooms to 1053 rooms. The Company’s turnover for the financial year ended March 31, 2013 stood at Rs.29,663 lakhs resulted an increase of 10% as compared to previous year. The room income stood at Rs.14,790 lakhs with an increase of 8% compared to previous year. Food and Beverage Income stood at Rs.12,578 lakhs with an increase of 21% as compared to the previous year.

Total expenditure of the Company was increased by Rs.4,569 lakhs (18%) as compared to previous year, this increase of expenditure would be at 8% without considering expenditures on account of Vivanta by Ta j – Surya, Coimbatore.

Profit before depreciation, finance cost & tax was at Rs.5,345 lakhs for the current year with a decrease of Rs.426 lakhs (7%) as compared to previous year. Interest and depreciation amounted to Rs.2,774 lakhs and Rs.2,617 lakhs respectively. The Net Loss before exceptional items was Rs.46 lakhs as against a profit of Rs.1,881 lakhs as compared to previous year. Further the Exceptional Items represent a profit of Rs.1,218 lakhs on disinvestment holdings of Prestige Garden Resorts Private Limited, a Joint Venture Company and Rs.218 lakhs being a profit on transfer of an immovable property.

Profit Before Ta x and after Exceptional Items was Rs.1,390 lakhs as against Rs.1,881 lakhs as compared to previous year Profit After Ta x stood at Rs.1,430 lakhs as against Rs.1,263 lakhs as compared to previous year.

Consolidated Financial Results

The Consolidated turnover of the Company for the financial year ended March 31, 2013 amounts to Rs.34,878 lakhs as against Rs.32,155 lakhs as compared to the previous year. The Profit After Ta x amounts to Rs.1,562 lakhs as against Rs. 2,249 lakhs as compared to previous year.

Dividend

Your Directors recommended a dividend of Rs.0.55 (55%) per equity share of Rs.1/- each for the financial year ended March 31, 2013. The total amount of dividend outgo for the financial year 2012-13 will be Rs.1,149 lakhs comprising of Rs.982 lakhs as dividend and Rs.167 lakhs as tax on dividend as against Rs.804 lakhs as dividend and Rs.130 lakhs as tax of dividend for the previous year. The dividend if approved in the forthcoming Annual General Meeting will be paid within 30 days thereof to the Members whose name appears in the Register of Members as on August 6, 2013 and the proposed date of payment will be notified to the Stock Exchanges for publication.

Borrowings

The Company’s borrowings as at March 31, 2013 on a standalone basis stood at Rs.28,340 lakhs as against Rs.29,037 lakhs as on March 31, 2012 and on a Consolidated basis borrowings stood at Rs.30,338 lakhs as on March 31, 2013 as against Rs.31,975 lakhs as compared to the previous year. The Company during the financial year 2011-12 has raised Rs.10,000 lakhs through an issue of 10.40% Secured Non-Convertible Debentures towards capital expenditures which is repayable on maturity in January, 2015.

Fixed Deposits

The Company discontinued acceptance of fixed deposits effective from February 17, 2003 and also renewal of Fixed Deposits with effect from July 2009. The Liability on account of unclaimed Fixed Deposits amounts to Rs.5.40 lakhs as on March 31, 2013.

Capital Expenditure

During the year under review, the Company incurred Rs.5,274 lakhs towards capital expenditure. Major expenditure was incurred for the construction of Vivanta by Ta j - Surya, Coimbatore and renovation of Ta j Coromandel, Chennai.

Business Overview

India stands 42nd in the world ranking of Foreign Tourist Arrivals. The Indian economy grew by 5% in the year 2012-13 and the Services Sector grew by 6.6%. The tourism sector contributes 6.23% to the national gross domestic product (GDP) and 8.78% of the total employment in India. However, due to global economic slowdown the Foreign Tourist Arrivals growth was moderated at 5.4% in the year 2012.

In terms of hospitality industry performance in India, the reports indicate that the overall rates and occupancies have seen a decline in 2012 owing to the impact of increased supply in the marketplace and this trend is expected to continue for the next few years.

The increase in interest rates resulted in higher cost of borrowings and increasing input cost have had an impact on profitability. One of the hindrances towards growth of this Industry is that of multiple taxes which makes the tourism product expensive.

Your Company being part of the Taj Group of Hotels, has the advantage of access to the aggressive sales & marketing strategies, cost efficiency and talented pool of human resources etc., Your Company also expanded in newer locations in South India and has plans to add newer hotels in near future.

Product up-gradation and expansion

The year under review your Company had renovated and expanded its products and offerings as detailed hereunder:

1. The Ball Room complex at Taj Coromandel, Chennai was fully renovated and 7,000 Sqft. additional space was also added. A new 4,000 Sqft. Fitness Center was opened.

2. The capacity expansion at Vivant by Taj – Fishermen’s Cove, Chennai was completed with all the 64 new rooms being fully operational.

3. Vivanta by Taj – Surya, Coimbatore opened a Barbeque Restaurant and a Chinese Restaurant.

4. Vivanta by Taj – Trivandrum, opened a new (Jiva) Spa and a Chinese restaurant

Subsidiary Company

The Ministry of Corporate Affairs, vide Circular No. 3/2011 – N.5/12.2007-CL-III dated February 21, 2011 granted a general permission to holding companies from not attaching to its Annual Report the Profit & Loss Statement, Balance Sheet, Auditor’s Report & etc. of its Subsidiary Company(s).

The Board in accordance with the said circular and Section 212, of the Companies Act, 1956 and other applicable provisions if any, have not enclosed the Profit & Loss Statement, Balance Sheet, Auditor’s Report & etc. of its Subsidiary Company, namely OHL International (HK) Ltd. The Statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Company is furnished in the Annual Report.

Listing

The Equity Shares of your Company are listed on Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and The National Stock Exchange of India Limited, Mumbai and the Global Depositary Receipts (GDRs) are listed on Luxembourg Stock Exchange. The Listing fees to the Stock Exchanges and custodian fees to NSDL and CDSL have been paid by the Company for the financial year 2013-14.

Directors

Mr.S.Y.Syed Meeran, Dr.G.Sundaram, and Mr.SBPV.Ramamohana Rao, Directors retire by rotation, and are eligible for re-appointment.

Auditors

The Auditors Messers Brahmayya & Co, Chartered Accountants and Messers SNB Associates, Chartered Accountants, Chennai shall retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The retiring auditors have furnished a certificate confirming their eligibly for re-appointment in accordance with the provisions of Section 224(1B) of the Companies Act, 1956 and also have indicated their willingness for re-reappointment.

Staff

The particulars of employees requires to be furnished under Section 217 (2A) of the Companies Act, 1956 read with rules there under, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the reports and accounts are being sent to all the shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

The Directors expressed their appreciation for the contribution made by the employees in the progress of the Company.

Director’s Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 (Act) the Directors based on the representation received from the Operating Management, confirm that:–

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. The Directors have selected such accounting policies and applied them consistently made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the affairs of the Company at the end of the financial year March 31, 2013 and of the profits of the Company for that period.

iii. The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing, detecting fraud and other irregularities.

iv. The Directors had prepared the Annual Accounts on a going concern basis.

Energy conversion, Technology Transfer and Foreign Exchange Earnings and outgo

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is furnished in Annexure I.

Corporate Governance

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion & Analysis, Corporate Governance as well as the Auditor’s certificate on the compliance of Corporate Governance, form part of the Annual Report.

Business Responsibility Report

The Business Responsibility Report in accordance with Clause 55 of the Listing Agreement is not a mandatory requirement for the Company.

Acknowledgement

The Directors thank the Company’s customers, vendors, investors and bankers for their continued support during the year. For and behalf of the Board of Directors

Place: Mumbai R.K.Krishna Kumar

Date: May 16, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the forty second Annual Report of the Company together with its Audited Statement of Accounts for the year ended March 31, 2012

Financial Results:

Rs.lakhs Year ended March 31

2012 2011

1. Profit before tax amounted to 1881 3206 Deducting there from :

Provision for tax

Current 383 948

Minimum Alternate Tax (383)

Deferred 618 29

Profit after tax 1263 2229

Balance brought forward from previous year 6537 6469

The distributable profit amounted to: 7800 8698

2. Dividend

(a) The Board of Directors has recommended payment of Dividend of 804 1429 Rs.0.45 (45%) per Equity Share of Rs 1 each {Previous Year : Rs.0.80 (80%)} per Equity Share of Rs.1/- each was declared and paid)

(b) Tax on dividend 130 232

3. Amount transferred to General Reserve and Debenture Redemption Reserve 315 500

Balance carried forward 6551 6537 Earnings per share (Equity shares par value Rs.1/- Previous year Rs 1/-) 0.71 1.25

Operating Results:

Average Room Rates across the key domestic markets grew by 7% during 2011/12 as compared to the previous year. All the hotels showed a growth in ARRs.

Occupancy across the hotel units of the Company was 64% as compared to 68% in the previous year. Room inventory grew by 200 RPD due to additional inventory at Vivanta by Taj Fisherman's Cove and Vivanta by Taj, Surya - Coimbatore, which was opened on January 19, 2012 with 180 rooms.

The Chennai market had reported occupancies of 65% and ARR of Rs 6,753 as against 67% and Rs 6,813 in the previous year.

The Company recorded 13% increase in turnover at Rs 27021 lakhs for the year ended March 31, 2012. Room Income improved by 12% over the previous year. The occupancy declined to 64% from 68% and the ARR increased by 7% over the previous year. Food and Beverage Income was 10% higher than that of the previous year. Increase in room and F & B income was due to income from Vivanta by Taj - Surya, Coimbatore opened during the year under review.

Profit before tax at Rs 1881 lakhs was 41% lower while profit after tax at Rs 1263 lakhs was 43% lower than that of the previous year. The Company is taking the benefit under Section 35AD of the Income Tax Act on the capital expenditure incurred on Coimbatore hotel and consequently the company has deferred tax to the future years after payment of Minimum Alternate Tax (MAT).

Consolidated Financial Results:

The consolidated turnover of the Company for the year ended March 31, 2012 aggregated to Rs 32742 lakhs as against Rs 28286 lakhs for the previous year. The profit after tax aggregated to Rs 2249 lakhs as against Rs 2917 lakhs for the previous year.

Dividend:

Your Directors recommend a dividend of Rs 0.45 (45%) per equity share of Rs 1/- each for the financial year ended March 31, 2012. The total amount of dividend outgo will be Rs 934 lakhs which includes the tax on dividend amounting to Rs 130 lakhs as against Rs 1429 lakhs as dividend and Rs 232 lakhs as tax on dividend for the previous year. The Dividend, if approved by the Members at the forthcoming Annual General Meeting, will be paid within 30 days thereof i.e. on or before August 15, 2012 to the Members whose names appear on the Register of Members as on July 17, 2012. In respect of Members holding shares in electronic form, the dividend will be paid to those Members whose names appear in the beneficial holders list as furnished by the Depositories for this purpose. The dividend income is not taxable in the hands of the shareholders.

Borrowings:

Total borrowings stood at Rs 29237 lakhs as at March 31, 2012 as against Rs 21468 lakhs as on March 31, 2011 for the standalone entity. The consolidated debt stood at Rs 31549 lakhs as on March 31, 2012 as against Rs 23341 lakhs as on March 31, 2011.

The Company raised Rs 100 crores by issuing 10.4% Non Convertible Debentures which was used for repayment of existing loans and to meet construction of Coimbatore hotel, expansion of Fisherman's Cove and renovation activities at Taj Coromandel.

Capital Expenditure:

During the year under review, the Company incurred Rs 9008 lakhs towards capital expenditure. Major expenditure was incurred for the construction of Vivanta by Taj Surya, Coimbatore, expansion of Vivanta by Taj- Fisherman's Cove and renovation activities at Taj Coromandel.

Business overview:

The resilience shown by the Indian economy in 2009/10 and 2010/11 gave way and there was a significant slowdown in economic activities during 2011/12. Gross Domestic Product (GDP) slipped to 6.9% in 2011/12. Industrial sector performed poorly retreating to a 27% share of the GDP. Overall growth during April - December reached 3.6% as compared to 8.3% in the corresponding period of the previous year.

Inflationary pressures continued to persist through 2011/12 with an increase in the latter part of the year due to higher than anticipated rise in food and oil prices. Inflation was high during most of the year 2011/12. The year witnessed a sharp increase in interest rates that resulted in higher costs of borrowings; and other rising costs affecting profitability thereby impacting internal accruals that could be used to finance investment.

Foreign tourist arrivals (FTAs) in India during 2011 were 6.29 million with a growth rate of 8.9% as compared to 5.78 million in 2010 with a growth rate of 11.8% over 2009. The 8.9% growth rate is much better than UNWTO's projected growth rate of 4% to 5% for the world during the same period. Foreign Exchange Earnings from tourism in Rupee terms during 2011 were Rs 77591 crores with a growth rate of 19.6% as compared to Rs 64889 crores with a growth rate of 18.1% during 2010 over 2009. Despite a whole host of challenges over the past decade - from terrorist attacks and health scares to natural disasters - international travel and tourism demand has shown phenomenal growth.

Subsidiary Company:

Vide General Circular No. 3/2011 - N. 5/12.2007-CL-III dated February 21, 2011, the Ministry of Corporate Affairs, Government of India had granted general permission to Companies wherever the holding company gives its consent and comply with the conditions prescribed by the Ministry. Accordingly, Companies are required to comply with the conditions prescribed in order to avail the exemption from attaching the balance sheet, profit and loss statement, etc. of the subsidiary company in the Annual Report of the Holding Company. Your company has complied with the conditions stipulated by the ministry as detailed hereunder:

i. The Board of Directors of the Company has by a resolution given its consent for not attaching the Balance Sheet, Profit and Loss Statement etc. of the subsidiary, OHL International (HK) Ltd.;

ii. In the annual report, the Consolidated Financial Statements of the company and its subsidiary, OHL International (HK) Ltd. duly audited by statutory auditors are presented;

iii. The company has prepared the Consolidated Financial Statement in strict compliance with the applicable Accounting Standards and Listing Agreement as prescribed by SEBI;

iv. Capital, reserves, total assets, total liabilities, details of investment (except investments in the subsidiary), turnover, profit before and after taxation and provision for taxation and proposed dividend are disclosed in the consolidated balance sheet;

v. The company has undertaken in its annual report that the annual accounts of the subsidiary company and related information shall be made available to shareholders of the holding and subsidiary company seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept for inspection by any shareholder in the corporate office of the company and of the subsidiary company and a note to the above effect is included in the annual report of the company. The company shall furnish a hard copy of details of accounts of subsidiary to any shareholder on demand;

vi. The company as well as its subsidiary company, OHL International (HK) Ltd. shall regularly file such data to the various regulatory and Government authorities as may be required by them;

vii. The company shall give Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary company OHL International (HK) Ltd. along with exchange rate as on the closing day of the financial year.

Hence the accounts of the Subsidiary, OHL International (HK) Ltd. are not appended to the Annual Report. However, the Consolidated Financial Statement of the Subsidiary, Joint Ventures and Associates prepared in strict compliance with Accounting Standard 21 and the Listing agreement, duly audited by the Statutory Auditors form part of the Annual Report.

The Financial Statements of the Subsidiary Company and other related detailed information are available at the office of the Company Secretary at any point of time. The Annual Accounts of the Subsidiary Company will also be available for inspection at the office of the Company Secretary and the Subsidiary Company.

Listing:

The Equity Shares of your Company are listed on Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai, and National Stock Exchange of India Limited, Mumbai and the Global Depositary Receipts (GDRs) are listed on Luxembourg Stock Exchange. Listing fees to the Stock Exchanges have been paid by the Company.

Fixed Deposits:

The Company discontinued acceptance of fixed deposits effective from February 17, 2003. The Company also discontinued renewal of existing deposits with effect from July 2009. Liability on account of Fixed Deposits amounted to Rs 5.80 lakhs (Previous year Rs 8.30 lakhs) which includes 34 deposits amounting to Rs 5.40 lakhs which remained unclaimed as on March 31, 2012 for want of instructions from the depositors.

Product up gradation and expansion:

The 180-room hotel in Coimbatore, Vivanta by Taj Surya, was commissioned during the year under review. The expansion block in Vivanta by Taj-Fisherman's Cove was also completed with the commissioning of the balance 14 rooms. A comprehensive renovation plan at Taj Coromandel has been under implementation for the past few years. The south Indian restaurant, Southern Spice has been recently renovated.

Donation:

Donations and contributions to social causes amounted to Rs 15 lakhs during the year under report.

Directors:

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. R K Krishna Kumar, Mr. Pramod Ranjan and Mr. Arun Nanda, Directors, retire by rotation and being eligible have offered themselves for reappointment.

Directors' Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management, confirm:-

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year i.e. March 31, 2012 and of the profit of the Company for the year ended March 31, 2012;

c. that they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts on a going concern basis.

Auditors:

The Auditors Messrs. Brahmayya & Co., Chartered Accountants and Messrs. SNB Associates, Chartered Accountants, Chennai retire at the forthcoming Annual General Meeting and are eligible for reappointment.

The Members are requested to re-appoint M/s. Brahmayya & Co., Chartered Accountants and SNB Associates, Chartered Accountants as Joint Statutory Auditors of the Company to hold office until the conclusion of the next Annual General Meeting of the Company and authorize the Board of Directors to fix their remuneration.

Energy conversion, Technology Transfer and Foreign Exchange Earnings and outgo:

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is furnished hereunder :

a. Electricity, furnace oil, diesel, petrol and cooking gas are purchased at the prevailing market rates from the Government Agencies at Chennai, Kochi, Trivandrum, Madurai, Connor, Coimbatore, Mangalore and Visakhapatnam. To meet its energy requirements, the Company has entered into a power purchase agreement for purchase of green power. As a step towards energy conservation, the Company had installed solar water heating systems at its hotels to reduce power consumption and also initiated several other measures including conduct of an Energy Audit. The recommendations for conservation of energy based on the Audit have been implemented in all the Company's hotel units so as to derive maximum benefit in terms of reduction in the consumption of energy and thereby reduce the power cost in the long run.

b. The activity of the Company is not covered under the list of specified industries in the Schedule to the Rules as stated above.

c. The details on foreign exchange earnings and outgo are furnished in Notes to Financial Statements (Refer Item Nos. 30, 31 and 32)

Particulars of employees:

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the reports and accounts are being sent to all the Shareholders of the Company excluding the statement of particulars of employees. Any Shareholder interested in obtaining a copy may write to the Company Secretary at the Corporate Office of the Company.

The Directors express their appreciation for the contribution made by all the employees of the Company who, through their unstinted cooperation have enabled the Company to achieve sustained operational performance during the year.

Corporate Governance:

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditor's certificate on the compliance of Corporate Governance, form part of the Annual Report.

Acknowledgements:

Your Directors thank the Company's clientele, vendors, investors and bankers for their continued support during the year.

For and on behalf of the Board of Directors

Place: Bengaluru R K Krishna Kumar

08.05.2012 CHAIRMAN


Mar 31, 2011

The Directors have pleasure in presenting the Forty First Annual Report of the Company together with its Audited Statement of Accounts for the year ended March 31, 2011

Financial Results: Rs. in Lakhs

Year ended March 31, 2011

2011 2010

1. Profit before tax amounted to 3206 3537

Deducting therefrom : Provision for tax

- Current 948 1280

- Deferred 29 (58)

-Fringe Benefit Tax - -

2229 2315

Profit after tax

Add: Utilised amount transferred from Foreign Exchange

Earnings Reserve - 125

Balance brought forward from previous year 6469 6091

The distributable profit amounted to 8698 8531

2. Dividend

(a) The Board of Directors has recommended payment of Divident of Rs. 0.80 (80%) per Equity Share of Rs. 1/- each (Previous year - a Divident of Rs. 7.50 (75%) per Equity Share of Rs. 10 /- each was declared and paid). 1429 1340

(b) Tax on dividend 232 222

3. Amount transferred to General Reserve 500 500

4. Balance carried forward 6537 6469

5. Earnings per share (Equity shares par value Rs. 1/- each) 1.25 1.30*

Operating Results:

Average Room Rates across the key domestic markets grew by 9% during 2010-11 as compared to the

previous year mainly due to the increase in ARR in the second half of the year. While Chennai and

Trivandrum continued to face the pressure on ARRs and showed a marginal decline, all other hotels

showed a growth in ARRs.

Occupancies across the hotel units of the Company grew by 9% to 68% against 62% last year. Almost all

cities except Mangalore showed a healthy growth in occupancies.

The Chennai market has reported occupancies of 67% and ARR ofRs. 6,844 for the year 2010-11. IT, Auto,

Financial Sectors were the key growth segments.

The Company recorded 18% increase in turnover at Rs. 23904 lakhs during the year ended March 31, 2011,

as compared to the revenue earned during the previous year. Room Income improved by 23% over the

previous year. The occupancy increased from 62% to 68% and the ARR increased by 9% over the previous

year. Food and Beverage Income was 22% higher than that of the previous year. Increase in room and F

& B income was also due to income from Vivanta by Taj, Trivandrum for the full year.

Profit before tax at Rs. 3206 lakhs was 9% lower than that of the previous year and profit after tax at Rs. 2229 lakhs was 4% lower than that of the previous year.

Consolidated Financial Results:

The consolidated turnover of the Company for the year ended March 31,2011 aggregated to Rs. 28286 lakhs as against Rs. 22934 lakhs for the previous year. The profit after tax aggregated to Rs. 2976 lakhs as against Rs. 1991 lakhs for the previous year.

Sub-division of Equity Shares:

Pursuant to the Members approval through postal ballot, the Equity Shares of the Company were subdivided from a face value ofRs. 10/- each to a face value ofRs. 1/- each, with effect from November 12, 2010.

Dividend:

Your Directors recommend a dividend ofRs. 0.80 (80%) per equity share ofRs. 1/- each for the financial year ended March 31,2011. The total amount of dividend outgo will be Rs. 1661 lakhs which includes the tax on dividend amounting to Rs. 232 lakhs as against Rs. 1340 lakhs as dividend and Rs. 222 lakhs as tax on dividend for the previous year. The Dividend, if approved by the Members at the forthcoming Annual General Meeting, will be paid within 30 days thereof i.e. on or before August 26, 2011 to the shareholders/ beneficial holders whose names appear on the Register of Members/ Beneficial Holders list as on July 28, 2011. The dividend income is not taxable in the hands of the shareholders.

Borrowings:

Total borrowings stood at Rs. 21668 lakhs as at March 31, 2011 as against Rs. 19066 lakhs as on March 31, 2010 for the standalone entity. The consolidated debt stood at Rs. 24848 lakhs as on March 31, 2011 as againstRs. 21501 lakhs as on March 31, 2010.

Capital Expenditure:

During the year under review, the Company incurred Rs. 8717 lakhs towards capital expenditure. Major expenditure was incurred for the ongoing construction of a hotel in Coimbatore, expansion of Vivanta by Taj-Fishermans Cove and renovation activities at Taj Coromandel.

Business overview:

The recovery in economic activity witnessed in 2009/10 was sustained during the year 2010/11. Gross Domestic Product (GDP) increased by 8.6% in 2010/11 compared to a growth of 8% during 2009/10. Industrial growth remained strong during the first half of 2010/11 with the Index for Industrial Production (IIP) recording an average growth of over 10%. However, there was some moderation during the subsequent months, partly due to an adverse base effect.

Inflationary pressures continued to persist through 2010/11 with an increase in the latter part of the year due to higher than anticipated rise in food and oil prices. Inflation, measured by the Wholesale Price Index (WPI), after declining from a high of 11% at the beginning of the year to about 8.1% in November 2010 continued to remain at elevated levels of about 8% for the remaining part of the year. Inflationary pressures, though largely emanating from food and fuel prices, became broad based as manufactured products inflation showed an increase from February 2011.

According to the Tourism Satellite Accounting (TSA) research released in March 2011 by World Travel and Tourism Council (WTTC) and its research partner Oxford Economics, the direct contribution of travel

and tourism to GDP is expected to grow by 8. lper cent per annum (p.a) to US$ 76.65 billion (2 per cent of GDP) for 2011-2021 period, while the total contribution is expected to be US$ 82.61 billion in 2011 (4.5 per cent of GDP). It is forecasted to rise by 8.8 per cent per annum for 2011-21, accounting for 4.9 per cent of GDP.

The hotel and tourism industrys contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.35 billion from April 2000 to February 2011, {source: Department of Industrial Policy and Promotion (DIPP)}. Indias hotel pipeline is the second largest in the Asia-Pacific region and Indian hospitality industry is expected to grow at a rate of 8.8 per cent during 2007-16, making the country as the second-fastest growing tourism market in the world. The domestic hospitality sector is expected to see investments of over US$ 11 billion by 2012, with 40 international brands making their presence in the country in the next few years.

2010 saw a revival in foreign tourist arrivals after the slump in 2009 on account of the slow down. FT As in India during 2010 were 5.58 million with a growth rate of 8.1% as compared to the FTAs of 5.17 million versus de-growth of 2.2% in 2009.

Subsidiary Company:

Your Company has obtained an exemption from the Ministry of Corporate Affairs, (MCA), Government of India, vide its letter No. 47/44/2011-CL-III dated January 28, 2011 from publication of the accounts of its Subsidiary, OHL International (HK) Limited, under the provisions of Section 212 of the Companies Act, 1956 and hence the the Balance Sheet, Profit and Loss Account and other documents of the Subsidiary Company are not appended to the Annual Report. However, the Consolidated Financial Statement of its Subsidiary, Joint Ventures and Associates prepared in strict compliance with Accounting Standard 21 and the Listing agreement, duly audited by the Statutory Auditors form part of the Annual Report.

The Financial Statements of the subsidiary company and other related detailed information are available at the office of the Company Secretary at any point of time. The Annual Accounts of the subsidiary company will also be available for inspection at the office of the Company Secretary and the office of the Subsidiary Company.

Listing:

The Equity Shares of your Company are listed on Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai, and National Stock Exchange of India Limited, Mumbai and the Global Depositary Receipts (GDRs) are listed on Luxembourg Stock Exchange. Listing fees to the Stock Exchanges have been paid for the year 2011 /12.

Fixed Deposits:

The Company discontinued acceptance of fixed deposits effective from February 17, 2003. The Company also discontinued renewal of existing deposits with effect from July 2009. Liability on account of Fixed Deposits amounted to Rs. 8.30 lakhs (Previous year Rs. 14.89 lakhs) which includes 34 deposits amounting to Rs. 5.40 lakhs which remained unclaimed as on March 31, 2011 for want of instructions from the depositors.

Product up gradation and expansion:

Construction of the 180-room Vivanta by Taj hotel in Coimbatore is progressing as planned. 50 of the 64 rooms in the expansion block in Vivanta by Taj-Fishermans Cove have been completed while work on the balance 14 rooms is currently underway. A comprehensive renovation plan at Taj Coromandel has been under implementation for the past few years. A new swimming pool has been completed, retail shops are ready for handing over to lessees, lobby, reception and lounge, entrance areas of the hotel, including the entry driveway and porte cochere, have recently been renovated.

Donation:

Donations and contributions to social causes amounted to Rs. 9 lakhs during the year under report. Directors:

Mr. Ramesh D Hariani who was appointed as a Director of the Company in the casual vacancy caused by the resignation of Mr. Anil P Goel to hold office up to the date of the forthcoming Annual General Meeting, being eligible, seeks appointment by the Members at the forthcoming Annual General Meeting.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Raymond N Bickson, Mr. D R Kaarthikeyan and Mr. D Vijayagopal Reddy, Directors, retire by rotation and being eligible have offered themselves for reappointment.

Directors Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management, confirm:-

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31,2011 and of the profit of the Company for the financial year ended on March 31,2011;

c. that they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts on a going concern basis. Auditors:

The Auditors Messrs. Brahmayya & Co., Chartered Accountants and Messrs. SNB Associates, Chartered Accountants, Chennai retire at the forthcoming Annual General Meeting and are eligible for reappointment. The Members are requested to re-appoint M/s. Brahmayya & Co., Chartered Accountants and SNB Associates, Chartered Accountants as Joint Statutory Auditors of the Company to hold office until the conclusion of the next Annual General Meeting of the Company and authorize the Board of Directors to fix their remuneration.

Energy conversion, Technology Transfer and Foreign Exchange Earnings and outgo:

The information required under Section 217(l)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is furnished here- under :

a. Electricity, furnace oil, diesel, petrol and cooking gas are purchased at the prevailing market rates from the Government Agencies at Chennai, Kochi, Trivandrum, Madurai, Coonoor, Mangalore and Visakhapatnam. To meet its energy requirements, the Company has entered into a power purchase agreement for purchase of green power. As a step towards energy conservation, the Company had installed solar water heating systems at some of its hotels to reduce power consumption and also initiated several other measures including conduct of an Energy Audit. The recommendations for conservation of energy based on the Audit have been implemented in all the Companys hotel units so as to derive maximum benefit in terms of reduction in the consumption of energy and thereby reduce the power cost in the long run.

b. The activity of the Company is not covered under the list of specified industries in the Schedule to the Rules as stated above.

c. The details on foreign exchange earnings and outgo are furnished in Notes to the Accounts (Refer Item Nos. 9 and 10)

Particulars of employees:

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the reports and accounts are being sent to all the Shareholders of the Company excluding the statement of particulars of employees. Any Shareholder interested in obtaining a copy may write to the Company Secretary at the Corporate Office of the Company.

The Directors express their appreciation for the contribution made by all the employees of the Company who, through their unstinted cooperation have enabled the Company to achieve sustained operational performance during the year.

Corporate Governance:

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors certificate on the compliance of Corporate Governance, form part of the Annual Report.

Acknowledgements:

Your Directors thank the Companys clientele, vendors, investors and bankers for their continued support during the year.

For and on behalf of the Board of Directors

Place: Mumbai R K Krishna Kumar

Date : 13.05.2011 CHAIRMAN

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