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Notes to Accounts of Thomas Cook (India) Ltd.

Mar 31, 2017

Background:

Thomas Cook (India) Limited (the “Company”) is a Public Limited Company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged in diversified travel and travel related businesses, working as Travel Agent and Tour Operator. The Company is also engaged as an Authorised Foreign Exchange Dealer.

1. Critical Accounting Estimates and Judgements:

The preparation of Financial Statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.

The areas involving critical estimates or judgements are:

Recognition of deferred tax assets for carried forward unabsorbed depreciation -note 16 Estimated goodwill impairment - note 4 (ii)

Estimation of Defined Benefit Obligation - note 15 Impairment of trade receivables - note 29

Estimation of inputs for fair value of Share based payment instrument - note 32

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.

(i) Leased Assets

Computers and Vehicles includes the following amounts where the company is a lessee under a finance lease:

* Fully depreciated as at April 1, 2015

(ii) Contractual Obligations

Refer Note 26 (a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iii) Capital Work-in-progress

Capital work-in-progress mainly comprises of computer hardware, properties, furniture & fixtures and office equipment

(iv) Cost of Office Building includes:

(a) 60 (Previous year - 60, 1 April 2015 - 60) unquoted fully paid-up Shares of INR 0.03 (Previous year INR 0.03, 1 April 2015 INR 0.03) in various Co-operative Societies.

(b) Share application money of INR 0.02 (Previous year INR 0.02, 1 April 2015 INR 0.02) to various Co-operative Societies.

(C) Premises of INR 1,155.1 (Previous year INR 1,181.9, 1 April 2015 INR 1,472.5) where the Co-operative Society is yet to be formed. 3

(i) Intangible assets includes:

Intangible Assets (software) includes Internally generated / developed software - Gross Block INR 1595.2 (Previous year INR 1595.2, 1 April 2015 INR 1595.2); Net Block INR 105.9 (Previous year INR 269.0 1 April 2015 INR 488.1).

(ii) Significant Estimate - Impairment tests of goodwill

The entire amount of goodwill pertains to Sterling business (cash generating unit) generated at the time of acquisition and is tested for impairment on an annual basis. Recoverable amount of the CGU is based on its property values which is higher than the carrying value of the cash generating unit.

(iii) Leased assets

Software includes the following amounts where the company is a lessee under a finance lease:

Nature and Purpose of Reserves Capital Redemption Reserve

The Company has issued Non convertible redeemable preference shares during the year. In order to comply with the requirements of section 69 of The Companies Act, 2013, the Company has transferred amounts to Capital Redemption Reserve.

Debenture Redemption Reserve

The Company has issued Non Convertible Debentures. In order to comply with the requirements of section 71 of The Companies Act, 2013, the Company has transferred amounts to Debenture Redemption Reserve.

Share Option Outstanding Amount

The share option outstanding account is used to recognised the grant date fair value of options issued to employees under the company’s Employee stock option plan. This includes options issued to the employees of the subsidiaries.

General reserves

General reserve is used to record transfer from capital redemption reserve and debenture redemption reserve. The reserves is utilised in accordance with the provisions of the Act.

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares and towards allotment of ESOP. The reserves is utilised in accordance with the provisions of the Act.

(i) Leave Obligations - Leave Entitlement

The leave obligations cover the Company’s liability for earned leave.

The amount of the provision of INR 154.2 (31 March 2016 - INR 212.0, 1 April 2015 - INR NIL) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. The following amounts reflect leave that is expected to be taken or paid within the next 12 months.

(ii) Post Employment Obligations

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

In respect of certain employees, the Company has Defined Benefit Plan for Other Long-term Employee Benefit in the form of Provident Fund. Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company.

Note 3: Capital management

3 (a): Risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the balance sheet). Total capital is calculated as ‘equity’ as shown in the balance sheet plus debt.

Note 4: Events occurring after the reporting period

(i) Declaration of final dividend

Refer to note 24 (b) for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.

Note 5: Disclosure on Specified Bank Notes (SBNs)

During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017. The details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:

The Company’s activities expose it to credit risk, market risk and liquidity risk.

The company’ has an overall Enterprise Risk Management policy, approved by the Audit Committee of the Board of Directors. Risks are managed by the individual Business Units, or the Support Services’ unit, entering into the base transactions, which give rise to the risks. The Executive Committee (comprising the Chairman & Managing Director, the Chief Financial Officer, and the Heads of the Business Units and Support Services’ units) has the overall responsibility for the risk management framework and its effectiveness, with the respective Heads of Business Units/ Support Services’ units, being responsible for its implementation and day-to- day monitoring.

(A) Credit Risk

The company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the company. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, analysis of historical bad debts and ageing of accounts receivable as of different reporting periods.

(B) Market risk

(i) Foreign currency risk

The Company enters into foreign currency transactions in the Foreign Exchange and Leisure Travel Outbound businesses. The currency risk arising out of foreign currency transactions in the Foreign Exchange business is monitored by a central dealing room, which then hedges the positions transactions entered into at individual locations across the country, through deals in the interbank market, or through forward contracts, thereby ensuring that there are minimal open positions. In the Leisure Travel Outbound business, package prices are denominated partly in the functional currency of the Company, Indian Rupees (INR), and partly in foreign currencies. The portion of customer collection in foreign currencies, which is parked in Nostro bank accounts, is used to pay off vendor liabilities, denominated in foreign currencies, thereby creating a natural hedge. As a result, the risk related to foreign currency exchange rate fluctuation is insignificant.

(iii) Price Risk Exposure

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss. Since the company does not have material equity investments, the company does not have a material price risk exposure as of reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company’s treasury maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the company’s liquidity position (comprising the unused cash and bank balances along with temporary investments in fixed deposits and/ or liquid mutual funds) on the basis of expected cash flows.

(ii) Maturities of financial liabilities

The tables below analyse the company’s financial liabilities into relevant maturity based on their contractual maturities for:

- all non-derivative financial liabilities, and

- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(c) Other Related Parties with whom the Company had transactions during the year / period Fellow subsidiaries:

- HWIC Asia Fund

(d) Key Management personnel

Madhavan Menon Mahendra Kumar Sharma (upto December 31, 2015)

Mahesh Iyer Uday Khanna (upto September 1, 2015)

R. R. Kenkare Kishori Udeshi

Debasis Nandy Krishnan Ramchandran

Rajeev Kale Ramesh Savoor

Amit Madhan Nilesh Vikamsey (w.e.f. December 23, 2015)

Mona Cheriyan Sunil Mathur (w.e.f. December 23, 2015)

Abraham Alapatt Pravir Vohra (w.e.f. April 10, 2015)

Amit Parekh

Relatives of key management personnel: Lili Menon

Note 6: Share based payments Employee option plan/ Tradable Options Thomas Cook Employees Stock Option Plan -2007

The Company has established an Employee Stock Option Plan called -”Thomas Cook Employees Stock Option Plan - 2007”. The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are :

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) -2010

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

Thomas Cook Employees Stock Option Plan -2013

The Company has established an Employee Stock Option Plan called -”Thomas Cook Employees Stock Option Plan - 2013”. The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.

The objectives of this plan are:

a) to reward the Senior Employees of the Company for their performance

b) to motivate them to contribute to the growth and profitability of the Company and

c) to retain talent in the organization

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.

Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - (“SHRIL ESOS 2012”)

The purpose of the ESOS is to provide the employees with an additional incentive in the form of Options to receive the equity shares of the Company at a future date. The ESOS is aimed at further motivating and retaining the employees and thereby increasing the profitability of the Company.

Vesting Schedule :

Grant I dated 24th January 2013 :

Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 3 tranches which is 40%, 30%, 30% on each of the anniversaries from the Grant Date.

Grant II dated 30th July 2014 :

Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 4 tranches which is 25%, 25%, 25%, 25% on each of the anniversaries from the Grant Date.

Grant Date means the date on which the Options are granted to the eligible employees by the Company/Committee under the Scheme.

Exercise Price :

Exercise price shall not be less than the par value of the Equity Shares of the Company and shall not be more than the price prescribed under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as defined in the Guidelines), whichever is more.

- The Exercise price of INR 96.00 for Grant I was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 24th January 2013.

- The Exercise price of INR 130.15 for Grant II was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 30th July 2014.

- As per clause 15.3.2 of the Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook (India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the company’s schemes and Stock Options which had been granted but not exercised as of the Record Date, by such SHRIL employees shall lapse and in lieu of the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100 options of SHRIL. The revised Exercise Price for Grant I was INR 80.00 and for Grant II was INR 108.46. Subject to the terms of the Scheme and SEBI ESOP Guidelines, the option holder will have a period of 5 years from the date of which the Options have vested, within which the vested options can be exercised.

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. The expected volatility was determined based on the volatility of the equity share for the period of one year prior to issue of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.

Modification of share based payment:

In the course of business combination effective from 18th August 2015 as per the court scheme, under which Sterling was merged with Thomas Cook Insurance services, Thomas Cook India limited had replaced the erstwhile ESOS scheme of sterling by issuing shares from its share capital. Such modification of share based payment arrangements are accounted for as per Ind AS 102.

Expenses/shares option outstanding account arising from share based payment transactions

Total expenses arising from share-based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:

Note 7: First-time adoption of Ind AS

These are the company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the company’s date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Previous GAAP or Indian GAAP). An explanation of how the transition from Previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exemptions applied in the transition from Previous GAAP to Ind AS. A.1 Ind AS optional exemptions

(a) Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(b) Share-based payment transaction

The Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transition to Ind AS.

(c) Investment in Subsidiaries

“Ind AS 101 permits a first time adopter to measure it’s investment, at the date of transition, at cost determined in accordance with Ind AS 27, or deemed cost, The deemed cost of such investment shall be it’s fair value at the Company’s date of transition to Ind AS, or previous GAAP carrying amount at that date.

The Company has elected to measure its investment in subsidiaries at the previous GAAP carrying amount as its deemed cost on the transition date.”

A2. Ind AS mandatory exceptions (a) Estimates

“An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with Previous GAAP.”

B: Reconciliations between Previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to the Reconciliations Note 1: Security Deposits

Under the previous GAAP, interest free lease deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by INR 347.4 as at 31 March 2016 (1 April 2015 - INR 865.0). The prepaid rent increased by INR 314.3 as at 31 March 2016 (1 April 2015 - INR 730.9). Total equity as on 1 April 2015 decreased by INR 134.1 due to amortisation of the prepaid rent and notional interest income recognised on security deposits. The profit for the year ended 31 March 2016 increased by INR 33.1 due to the notional interest income of INR 347.4 recognised on security deposits which is partially off-set by amortisation of the prepaid rent of INR 314.3. Consequently, total equity as at 31 March 2016 increased by INR 101.0.

(i) Under the previous GAAP, the cost of equity-settled employee share-based plan was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled share-based plan is recognised based on fair value of options as on the grant date. Consequently, the amount recognised in share option outstanding account increased by INR 274.1 as at 31 March 2016 with corresponding decrease in the profit for the year ended 31st March 2016 by INR 274.1. Similary share option outstanding account increased by INR 36.4 as at 1 April 2015 with corresponding decrease in retained earning by INR 36.4, leading to no impact on total equity as at 1 April 2015.

(ii) Under the previous GAAP, ESOP expense on account of issue of share-based payment plans by an entity to employees of its subsidiaries, was taken by the parent itself due to lack of specific guidance. Under Ind AS, cost of share based payment plans issued to the employees of the subsidiary is to be recognised by the entity receiving services from the concerned employees. The entity issuing the share based payment plan will recognise the cost as an investment. Due to this adjustment, total equity increased by INR 165.6 (1 April 2015 INR 122.7 ) with corresponding increase in investment in subsidiary by INR 165.6 (1 April 2015 INR 122.7).

(iii) Consequent to ESOPs issued in replacement of ESOPs of sterling in the course of business combination, an incremental cost has been booked as per Ind AS 102, which is the difference in the fair values of the options issued as on the effective date and its fair value as on 1 April 2014, the appointed date. There is no specific guidance for this in Indian GAAP. Due to this adjustment, ESOP cost has increased by INR 257.4, investment in subsidiary by INR 43.9 and corresponding increase in share option outstanding account by INR 301.3 as at March 2016 (1 April 2015- investment in subsidiary increased by INR 72.7 and corresponding increase in share option outstanding account by INR 72.7).

(iv) Consequent to above, profit for the year / retained earning ended 31 March 2016 decreased by INR 531.5 (INR 36.4), investment in subsidiary as at 31 March 2016 increased by INR 209.5 (1 April 2015 INR 195.4) and share option outstanding account increased by INR 741.0 (1 April 2015 INR 231.8). Hence, total equity and investment as at 31 March 2016 increased by INR 404.9 (1 April 2015 INR 195.4).

Note 3: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2016 increased by INR 20.3 with corresponding decrease in other comprehensive income by INR 20.3. Hence there is no impact on the total equity as at 31 March 2016.

Note 4: Lease rent Straight lining

Ind AS 19 mandates straight lining of lease rental payments, if the escalation rate is not in line with the general inflation rate. Under the previous GAAP, there was an option not to straight line which was availed by the company. Consequently, rent equalisation reserve has been created as on 1 April 2015 with corresponding decrease in total equity of INR 1,482.5. Rent equalisation reserve is subsequently reversed by INR 524.9 as at 31 March 2016 with a corresponding decrease in rent expense by INR 524.9. Consequently, total equity as at 31 March 2016 has decreased by INR 957.6.

Note 5: Fair valuation of derivatives

Under the previous GAAP, premium or discount on forward contracts were to be amortised over the period of the contract and the outstanding forward contracts were restated at the prevailing rate at each reporting date. Under Ind AS 109, derivatives are to be revalued at Fair value at each reporting date. Consequently, profit for the year ended March 31, 2016 increased by INR 62.7.

Note 6: Sterling merger adjustment:

“The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited (“”TCISIL””) & Sterling Holiday Resorts (India) Limited (Sterling) had at their meetings held on 7 February 2014 approved a composite scheme of arrangement and amalgamation (Scheme) pursuant to which there was (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company.

Pursuant to the scheme, (i) 116 equity shares of paid up value INR 1/- each of the Company were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid up value of INR 10/- in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company of paid up value of INR 1/- each were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid value of INR 10/- in consideration of the amalgamation of residual Sterling into the Company.

The Hon’ble High Court of Madras sanctioned the Scheme of Sterling on 13 April 2015, while the Hon’ble High Court of Bombay sanctioned the Scheme of the Company and TCISIL on 2 July 2015. The High Court Order was filed with the Registrar of Companies, Mumbai on 18 August 2015 and thus, the scheme is effective from 1 April 2014 (Appointed date).

After obtaining statutory approvals, the Company completed the process of allotment of 48,657,929 equity shares of INR 1/- each to the shareholders of Sterling in pursuance of the Scheme on 3 September 2015 as per the above swap ratio.

Subsequent to Sterling’s demerger into TCISIL as per court approved scheme, TCISIL’s name has been changed to Sterling Holidays Resorts Limited (“”SHRL””) with effect from 1 September 2015.

In terms of Scheme, all the assets and liabilities of residual Sterling are transferred to and vested in the Company and recorded at their respective fair values as determined by Board of Directors of the Company.

The difference, between the fair value of net assets of residual Sterling transferred to the Company and recorded by the Company pursuant to the order of the jurisdictional High Court(s) over the face value of equity shares allotted by the Company has been debited to Goodwill Account.

Pursuant to the scheme becoming effective, net assets of residual Sterling amounting to INR 25.3 as on 1 April 2014 have been taken over and Goodwill of INR 446.3 has been recorded after giving effect to the scheme. In the previous GAAP, the accounting of the scheme was done on the effective date i.e. 18 August 2015, however in pursuance of the court order the accounting in these financial statement has been done on the appointed date i.e. 1 April 2014.

Note 7: Goodwill amortisation

Under the previous GAAP, Goodwill recognised on the acquisition of the residual business of Sterling was amortised over a period of five years. Under Ind AS, Goodwill is considered not to have a definite determinable useful life and hence cannot be amortised and only tested for impairment. Due to this adjustment, profit and goodwill has increased by INR 178.8 for the year ended 31 Mach 2016.

Note 8: Debt issue expenses

Under the previous GAAP, Debt issue expenses were netted off against securities premium. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Hence total equity as at 31 March 2016 increased by INR 79.8 (as on 1 April 2015 by INR 38.9) with corresponding decrease in debenture liability as at 31 March 2016 by INR 40.9 (as on 1 April 2015 of INR 38.9). The amortisation of debt issue expense for the year ended 31 March 2016 is INR 18.3.

Note 9: Fair valuation of guarantee:

Corporate guarantees given for securing loan taken by subsidiaries have been fair valued and shown as financial liabilities. Under the previous GAAP, these were to be disclosed as an off balance sheet item which have now been brought to books as required by Ind AS. As a result, Guarantee liability as on 31 March 2016 has been shown at INR 376.2 (1 April 2015 INR Nil) with corresponding receivable from subsidiaries of INR 376.2 (1 April 2015 INR Nil). There is no impact on total equity as at 31 March 2016 and 1 April 2015.

Note 10: Dividend on Non Convertible Redeemable Preference Share Capital (“Non Convertible Redeemable Preference Shares”)

Under the previous GAAP, Non Convertible Redeemable Preference Shares were considered as equity, dividend and dividend distribution tax on Non Convertible Redeemable Preference Shares was accounted as appropriation from Surplus of Profit and Loss. Under Ind AS, Non Convertible Redeemable Preference Shares is considered as liability, dividend is considered as finance cost and dividend distribution tax is considered as current tax expense. Accordingly, total equity as at 31 March 2016 has reduced by INR 12,500.0, being the Non Convertible Redeemable Preference Shares amount. There is no impact on total equity as at 31 March 2016 in relaton to dividend and dividend distribution tax, however profit after tax has decreased by INR 426.3 for the year ended 31 March 2016.

Note 11: Revenue recognition

Under the previous GAAP, “Signing bonus” on contracts with Amadeus were recorded on a straight line basis over the contract period. Under Ind AS , it is now being recorded based on performance. Consequently, the profit for the year ended 31st March 2016 has decreased by INR 25.8 and the equity as at 1 April 2015 has increased by INR 25.8.

Note 12: Provision for Dividend on equity shares and Dividend distribution tax

As per Ind AS, provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity. Hence the proposed dividend provided under I GAAP has been reversed due to pendancy of shareholders approval.

Note 13: Deferred Tax

Under Ind AS deferred tax has been recognised on the adjustments made on transition to Ind AS.

Note 14: Retained Earnings

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustment.

Note 15: Grossing up

Note 16: Bank overdraft

For the purpose of cash flow statement, cash and cash equivalent includes bank overdraft.

(e) Information concerning the classification of securities

Options granted to employees under the ESOP Option Plan are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 32.

Note 8: Merger of Sterling Holiday Resorts (India) Limited

The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited (“”TCISIL””) & Sterling Holiday Resorts (India) Limited (Sterling) had at their meetings held on 7 February 2014 approved a composite scheme of arrangement and amalgamation (Scheme) pursuant to which there was (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company.

Pursuant to the scheme, (i) 116 equity shares of paid up value INR 1/- each of the Company were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid up value of INR 10/- in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company of paid up value of INR 1/- each were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid value of INR 10/- in consideration of the amalgamation of residual Sterling into the Company.

The Hon’ble High Court of Madras sanctioned the Scheme of Sterling on 13 April 2015, while the Hon’ble High Court of Bombay sanctioned the Scheme of the Company and TCISIL on 2 July 2015. The High Court Order was filed with the Registrar of Companies, Mumbai on 18 August 2015 and thus, the scheme is effective from 1 April 2014 (Appointed date).

After obtaining statutory approvals, the Company completed the process of allotment of 48,657,929 equity shares of Re. 1/- each to the shareholders of Sterling in pursuance of the Scheme on 3 September 2015 as per the above swap ratio.

Subsequent to Sterling’s demerger into TCISIL as per court approved scheme, TCISIL’s name has been changed to Sterling Holidays Resorts Limited (“”SHRL””) with effect from 1 September 2015.

In terms of Scheme, all the assets and liabilities of residual Sterling are transferred to and vested in the Company and recorded at their respective fair values as determined by Board of Directors of the Company.

The difference, between the fair value of net assets of residual Sterling transferred to the Company and recorded by the Company pursuant to the order of the jurisdictional High Court(s) over the face value of equity shares allotted by the Company has been debited to Goodwill Account.

Pursuant to the scheme becoming effective, net assets of residual Sterling amounting to INR 25.3 as on 1 April 2014 have been taken over and Goodwill of INR 446.3 has been recorded after giving effect to the scheme.”

Operating segments are reported in a manner consistent with the internal reporting provided to the CODM of the Company. The Company while presenting the consolidated financial statements has disclosed the segment information as required under Indian Accounting Standard 108 “Operating Segments”.

Note 9: On 22 December 2015, Quess Corp Limited (“Quess”) issued to its shareholders 2,560,000 Equity Shares of Rs. 10 each on rights basis at an issue price of Rs 10. Consequent to the Company’s renunciation of its rights in the rights issue, as approved by the shareholders by an overwhelming majority at their meeting held on / postal ballot, the Company’s shareholding in Quess has reduced to 69.55%. Further, Quess has on 5 January 2016 issued 85,001,292 Equity Shares of Rs. 10 each as a bonus issue (in the ratio of 3:1) to the existing shareholders of Quess.

Note 10: During the previous year, the Company along with its subsidiary Travel Corporation (India) Limited acquired a 100% stake in SOTC Travel Services Private Limited (‘formerly known as Kuoni Travel India Private Limited’) by purchasing 9,713,050 Equity Shares of Rs. 10 each fully paid up for a consideration of INR 32,000.0.

Note 11: During the year, the company has acquired sub subsidiary SITA Travels Private Limited from its subsidiary SOTC Travel Services Private Limited by issuing consideration of INR 1.0.

Note 12: Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015

Loans and advances in the nature of loans to subsidiary

Note 13: Recent accounting pronouncements

Standards issued but not yet effective:

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The company is evaluating the requirements of the amendment and the effect on the financial statements is not likely to be significant.


Mar 31, 2016

1 General Information:

Thomas Cook (India) Limited (the "Company") is a Public Limited Company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged in diversified businesses of Travel and Travel related Businesses, working as Travel Agent and Tour Operator. The Company is also engaged as an Authorised Foreign Exchange Dealer.

2 Employees Stock Option Schemes

Thomas Cook Employees Stock Option Plan -2007

The Company has established an Employee Stock Option Plan called - "Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are:

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) -2010

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

Thomas Cook Employees Stock Option Plan -2013

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2013". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.

The objectives of this plan are:

a) to reward the Senior Employees of the Company for their performance

b) to motivate them to contribute to the growth and profitability of the Company and

c) to retain talent in the organization

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.

During the year ended March 31, 2016, a total of 261,473 (Previousperiod-1,205,213) and Nil (Previousperiod434,717) equity shares of Re. 1 each were issued and allotted under the Thomas Cook Employee Stock Option Plan - 2007 and Thomas Cook Save As You Earn (SAYE) -2010 respectively. Consequently, the issued and paid up Equity Share Capital has increased.

The Company has granted share options under the Company''s Employees Stock Option Plan and share options outstanding as at March 31, 2016 are 6,187,658 (Previous period - 5,565,036). Of these 3,973 (Previous period - 3,973) option have vested in 2008, 214,347 (Previous period - 214,347) have vested in 2009, 214,347 (Previous period - 214,347) have vested in 2010, 96,833 (Previous period - 96,833) have vested in 2011, 23,335 (Previous period - 64,005) have vested in 2012, Nil (Previous period - Nil) have vested in 2013, Nil (Previous period - 203,620) have vested in 2014, 219,110 (Previousperiod - 282,737) have vested in 2015, 745,300 (Previousperiod - 282,736) will vest in 2016, 517,500 (Previous period - Nil) will vest in 2017, 517,500 (Previous period - Nil) will vest in 2018 and 3,635,413 (Previous period - 4,202,438) will vest after 2017 but not later than 2020.

Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - ("SHRIL ESOS 2012")

The purpose of the ESOS is to provide the employees with an additional incentive in the form of Options to receive the equity shares of the Company at a future date. The ESOS is aimed at further motivating and retaining the employees and thereby increasing the profitability of the Company.

Vesting Schedule :

Grant I dated 24th January 2013 :

Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 3 tranches which is 40%,30%,30% on each of the anniversaries from the Grant Date.

Grant II dated 30th July 2014 :

Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 4 tranches which is 25%,25%,25%,25% on each of the anniversaries from the Grant Date.

Grant Date means the date on which the Options are granted to the eligible employees by the Company/Committee under the Scheme. Exercise Price :

Exercise price shall not be less than the par value of the Equity Shares of the Company and shall not be more than the price prescribed under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as defined in the Guidelines), whichever is more.

- The Exercise price of '' 96.00 for Grant I was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 24th January 2013.

- The Exercise price of Rs.130.15 for Grant II was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 30th July 2014

- As per clause 15.3.2 of the Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook (India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the company''s schemes and Stock Options which had been granted but not exercised as of the Record Date, by such SHRIL employees shall lapse and in lieu of the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100 options of SHRIL. The revised Exercise Price for Grant I was Rs.80.00 and for Grant II was 108.46. Subject to the terms of the Scheme and SEBI ESOP Guidelines, the option holder will have a period of 5 years from the date of which the Options have vested, within which the vested options can be exercised.

3 Related Party Disclosures

(A) Enterprises where control exists

(i) Holding Company Fairbridge Capital (Mauritius) Limited, Mauritius ("FCML") holds 67.82% of Equity Shares of TCIL. FCML is wholly owned and controlled by Fairfax Financial Holdings Limited, Canada, the ultimate holding company.

(ii) Subsidiary Companies Travel Corporation (India) Limited

Indian Horizon Marketing Services Limited (Formerly known as ''Indian Horizon Travel and Tours Limited'')

Thomas Cook Tours Limited TC Visa Services (India) Limited

Jardin Travel Solutions Limited (w.e.f. September 1, 2015)

Borderless Travel Services Limited (w.e.f. August 25, 2015)

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited (upto December 28, 2015)

Thomas Cook Lanka (Private) Limited

Luxe Asia Private Limited (w.e.f. August 1, 2015)

Quess Corp Limited MFX Infotech Private Limited Coachieve Solutions Private Limited Aravon Services Private Limited Quess Corp (USA) Inc

Quess (Philippines) Corp (''formerly known as Magna IKYA Infotech Inc, Philippines'')

Quess Corp Holdings PTE. LTD.

IKYA Business Services Private Limited Quess Global (Malaysia) SDN. BHD.

MFXchange Holdings Inc Canada Brainhunter Systems Limited, Canada MFXchange US Inc MFXchange (Ireland) Ltd Mindwire Systems Limited Brainhunter Companies, LLC USA Brainhunter Companies, Canada Inc.

Sterling Holiday Resorts Limited (formerly known as ''Thomas Cook Insurance Services (India) Limited'')

Sterling Holidays (Ooty) Limited

Sterling Holidays (Kodaikannal) Limited

Nature Trails Resorts Private Limited (w.e.f. March 15, 2016)

SOTC Travel Services Private Limited (formerly known as ''Kuoni Travel (India) Private Limited'')* Sita Incoming (India) Private Limited*

Sita Holidays Resorts Private Limited*

Sita Holidays (India) Private Limited*

Sita Destination Management Private Limited*

Sita Beach Resorts Private Limited*

Sita Travels Private Limited*

Sita Travels & Tours Private Limited*

Distant Frontiers Tours Private Limited*

KAT Management Consulting (Shanghai) Co. Limited*

Sita World Travel Lanka Private Limited*

Sita World Travel (Nepal) Private Limited*

Horizon Travel Holdings (Singapore) Private Limited (w.e.f. August 19, 2015)

Luxe Asia Travel China Limited (formerly known as ''Horizon Travel Holdings (Hongkong) Private Limited (w.e.f. September 10, 2015)

Kuoni Travel (China) Limited (w.e.f. November 1, 2015)

* w.e.f. January 1, 2016

Other entities where relationship exists

Styracorp Management Services IME Consultancy

(B) Other Related Parties with whom the Company had transactions during the year / period

(i) Fellow Subsidiaries Fairbridge Capital Private Limited

Hamblin Watsa Investment Counsel Limited

(ii) Key Management Personnel Madhavan Menon

R. R. Kenkare Debasis Nandy Mahesh Iyer Rajeev Kale Amit Madhan Mona Cheriyan Abraham Alapatt

Amit Parekh (w.e.f. March 1, 2016)

(iii) Relatives of Key Lili Menon

4 Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding as at March 31, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5 Derivative Instruments

The Company uses Forward Exchange Contracts to hedge against its foreign currency exposures related to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

6 Merger of Sterling Holiday Resorts (India) Limited

The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited (""TCISIL"") & Sterling Holiday Resorts (India) Limited (Sterling) had at their meetings held on February 7, 2014 approved a composite scheme of arrangement and amalgamation (Scheme) pursuant to which there was (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company.

Pursuant to the scheme, (i) 116 equity shares of paid up value Rs.1 each of the Company were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid up value of Rs.10 in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company of paid up value of Rs.1 each were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid value of Rs.10 in consideration of the amalgamation of residual Sterling into the Company.

The Hon''ble High Court of Madras sanctioned the Scheme of Sterling on April 13, 2015, while the Hon''ble High Court of Bombay sanctioned the Scheme of the Company and TCISIL on July 2, 2015. The High Court Order was filed with the Registrar of Companies, Mumbai on August 18, 2015 and thus, the scheme is effective from April 1, 2014 (Appointed date).

After obtaining statutory approvals, the Company completed the process of allotment of 48,657,929 equity shares of Rs.1/- each to the shareholders of Sterling in pursuance of the Scheme on September 3, 2015 as per the above swap ratio.

Subsequent to Sterling''s demerger into TCISIL as per court approved scheme, TCISIL''s name has been changed to Sterling Holidays Resorts Limited (""SHRL"")with effect from September 1, 2015.

In terms of Scheme, all the assets and liabilities of residual Sterling are transferred to and vested in the Company and recorded at their respective fair values as determined by Board of Directors of the Company.

The difference, between the fair value of net assets of residual Sterling transferred to the Company and recorded by the Company pursuant to the order of the jurisdictional High Court(s) over the face value of equity shares allotted by the Company has been debited to Goodwill Account which is amortized over period of 5 years.

Pursuant to the scheme becoming effective, net assets of residual Sterling amounting to Rs.2,526,936 as on April 1, 2014 have been taken over and Goodwill of Rs.44,633,089 has been recorded after giving effect to the scheme.

7 Managerial remuneration aggregating to Rs.48,679,659 paid for the year ended March 31, 2016, exceeded the permissible limit as prescribed under Schedule V of the Companies'' Act 2013. The Company has made an application to the Central Government for payment of remuneration for five years, for which approval is yet to be received.

Managerial remuneration aggregating to Rs.45,371,443/- paid for the period ended March 31, 2015, exceeded the permissible limit as prescribed under Schedule V of the Companies'' Act 2013 (which corresponds to Schedule XIII of the Companies'' Act, 1956). The Company has made an application to the Central Government of India for such excess remuneration paid, approval of which is awaited.

8 Pursuant to the enactment of Companies Act, 2013, the Company has, effective April 1, 2015, reviewed and revised the estimated useful lives of its fixed assets, in accordance with the provisions of Schedule II of the Act and will depreciate the carrying amount of the asset as on April 1, 2015, over the remaining useful life of the asset. Additional depreciation charge on account of revised estimated useful lives of fixed assets for year ended March 31, 2016 is Rs.54,574,008.

Where the remaining useful life of an asset on April 1, 2015 was nil, the carrying amount of the asset after retaining the residual value was recognised in the opening balance of retained earnings (net of Deferred Tax) to the tune of Rs.37,626,502.

9 On December 22, 2015, Quess Corp Limited ("Quess") issued to its shareholders 2,560,000 Equity Shares of Rs.10 each on rights basis at an issue price of Rs.10. Consequent to the Company''s renunciation of its rights in the rights issue, as approved by the shareholders by an overwhelming majority at their meeting held on / postal ballot, The Company''s shareholding in Quess has reduced to 69.55%. Further, Quess has on January 5, 2016 issued 8,50,01,292 Equity Shares of Rs.10 each as a bonus issue (In the ratio of 3:1) to the existing shareholders of Quess.

10 The Company along with its subsidiary Travel Corporation (India) Limited acquired a 100% stake in SOTC Travel Services Private Limited (''formerly known as Kuoni Travel India Private Limited'') by purchasing 9,713,050 Equity Shares of Rs.10 each fully paid up for a consideration of Rs.3,200,000,000.

11 Employees of the Company and other parties misappropriated assets aggregating to Rs.4,277,774 during the year. The Company has recovered Rs.1,499,540 so far. The cases are under investigation and the Company has taken steps for recovering the balance amount.

12 Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015

Loans and advances in the nature of loans to subsidiary

13 In the previous period the Company had changed its financial year closing date from December 31 to March 31. Accordingly, the figures for the previous period are for the fifteen month period from January 1, 2014 to March 31, 2015 and are therefore not comparable with those of the current year which is twelve months from April 1, 2015 to March 31, 2016.

14 Previous period figures have been regrouped / reclassified wherever necessary to conform to this year''s classification.


Mar 31, 2015

1 General Information:

Thomas Cook (India) Limited (the "Company") is a Public Limited Company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged in diversified businesses primarily working as an Authorised Foreign Exchange Dealer. The Company is also engaged in Tour and Travel Business and working as Travel Agent and Tour Operator.

2 Rights, preferences and restrictions attached to shares

Equity Shares:-The Company has one class of equity shares having a par value of Re. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution to preference shareholders of all preferential amounts, in proportion to their shareholding.

CCPS:- 6,250,000 CCPS of Rs. 10 each were allotted on March 13, 2014 to Fairbridge Capital (Mauritius) Limited at a price of Rs. 800 each which includes a premium of Rs. 790 per share in order to partly fund the investment made by Thomas Cook Insurance Services (India) Limited in Sterling Holiday Resorts (India) Limited. [Refer Note 42]. The CCPS would be entitled to a dividend of 0.001% per annum.

During the period, on March 9, 2015, out of total 6,250,000 CCPS, 1,827,000 of Rs. 10 each were converted into 18,270,000 equity shares of Re.1 each.

3 Terms of securities convertible into Equity Shares

Class B & C Cumulative Convertible / Redeemable Preference Shares :-

Pursuant to the execution of the Consent terms dated February 5, 2014 with LKP Finance Limited and the Award dated February 20, 2014 issued by the Hon'ble Arbitral Tribunal, the Board of Directors, vide its resolution dated April 25, 2014, allotted 5,140,000 equity shares of Re. 1 each upon conversion of the 319,765 Class 'B' 0.001% Cumulative Convertible / Redeemable Preference Shares of Rs. 10 each and 271,800 Class 'C' 0.001% Cumulative Convertible / Redeemable Preference Shares of Rs. 10 each.

CCPS :-

The CCPS shall be compulsorily convertible into equity shares of the Company within a period of 18 months from the date of allotment of the CCPS. Each CCPS shall be convertible into 10 Equity Shares of the Company having face value of Re. 1 each at a premium of Rs. 79 each so that the 6,250,000 CCPS shall convert into 62,500,000 Equity Shares. The CCPS can be converted into Equity Shares of the Company at any time by the holder of the CCPS, in one or more tranches, prior to expiry of 18 months from the date of allotment of the CCPS. The CCPS shall be converted into equity shares in accordance with the provisions of applicable law, including minimum public shareholding requirements.

Amount in Rupees

4 Contingent Liabilities As at As at March 31, December 31, 2015 2013

(i) Claims against the Company not acknowledged as debts:

- Demand from Bombay Electricity 1,961,083 1,961,083 Supply and Transport (BEST) for Electricity charges

- Disputed claims made by clients 2,323,519 2,633,519

- Disputed Labour law suits 300,000 -

(ii) Disputed Income Tax demands 140,703,031 24,202,876

(iii) Disputed Service Tax demands 27,619,935 3,140,439,678

(iv) Disputed Demand for increase in 58,918,335 53,750,060 rent raised by Brihanmumbai Municipal Corporation

Notes: Future cash outflows in respect of (i) to (iv) above are determinable only on receipt of judgments/decisions pending with various forums/ authorities.

5. Employees Stock Option Schemes

Thomas Cook Employees Stock Option Plan -2007

The Company has established an Employee Stock Option Plan called - "Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are:

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) -2010

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

Thomas Cook Employees Stock Option Plan -2013

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2013". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.

The objectives of this plan are:

a) to reward the Senior Employees of the Company for their performance

b) to motivate them to contribute to the growth and profitability of the Company and

c) to retain talent in the organization

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.

During the period ended March 31, 2015, a total of 1,205,213 (Previous Year -142,597) and 434,717 (Previous Year Nil) equity shares of Re. 1 each were issued and allotted under the Thomas Cook Employee Stock Option Plan - 2007 and Thomas Cook Save As You Earn (SAYE) -2010 respectively. Consequently, the issued and paid up Equity Share Capital has increased to 272,730,827 shares.

The Company has granted share options under the Company's Employees Stock Option Plan and share options outstanding as at March 31, 2015 are 5,565,036 (Previous Year - 7,508,101). Of these 3,973 (Previous Year - 3,973) option have vested in 2008, 214,347 (Previous Year - 214,347) have vested in 2009, 214,347 (Previous Year - 197,680) have vested in 2010, 96,833 (Previous Year - 102,205) have vested in 2011, 64,005 (Previous Year - 741,862) have vested in 2012, Nil (Previous Year - 342,015) have vested in 2013, 203,620 (Previous Year - 1,000,915) have vested in 2014, 282,737 (Previous Year - 351,334) will vest in 2015, 282,736 (Previous Year - 351,332) will vest in 2016 and 4,202,438 (Previous Year - 4,202,438) will vest after 2017 but not later than 2020.

6 Related Party Disclosures

(A) Enterprises where control exists

(i) Holding Company Fairbridge Capital (Mauritius) Limited, Mauritius ("FCML") holds 45.01% of Equity Shares of TCIL and H Investments Limited ("HIL") holds 29.76% of Equity Shares of TCIL. FCML and HIL are wholly owned and controlled by Fairfax Financial Holdings Limited, Canada, the ultimate holding company.

(ii) Subsidiary Travel Corporation (India) Limited Companies Thomas Cook Insurance Services (India) Limited

Indian Horizon Marketing Services Limited (Formerly known as 'Indian Horizon Travel and Tours Limited')

Thomas Cook Tours Limited

TC Visa Services (India) Limited

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited

Thomas Cook Lanka (Private) Limited

Quess Corp Limited (Formerly known as 'IKYA Human Capital Solutions Limited' (w.e.f May 14, 2013)

Avon Facility Management Services Limited (merged with Quess Corp Limited effective January 1, 2014)

Co-Achieve Solutions Private Limited

Magna Infotech Limited (merged with Quess Corp Limited effective January 1,2014)

Hofincons Infotech & Industrial Services Private Limited (merged with Quess Corp effective July 1,2014)

MFX Infotech Private Limited

Brainhunter Systems Limited

Brainhunter Systems (Ottawa) Limited

Brainhunter Companies (Canada) Limited

Brainhunter Companies LLC (USA)

Magna Ikya Infotech Inc (Philippines)

Quesscorp Inc, USA (formerly known as Magna Infotech Inc USA)

Sterling Holiday Resorts (India) Limited (w.e.f September 3, 2014)

Sterling Holidays (Ooty) Limited (w.e.f September 3, 2014)

Sterling Holidays Resorts (Kodaikannal) Limited (w.e.f September 3, 2014)

(iii) Associate MFxchange Holdings Inc, Canada enterprise

(B) Other Related Parties with whom the Company had transactions during the period/year

(i) Fellow Fairfax (Barbados) International Corp. Subsidiaries Fairbridge Capital Private Limited

(ii) Key Management Madhavan Menon Personnel R. R. Kenkare Debasis Nandy Mahesh Iyer Rajeev Kale Amit Madhan

Mona Cheriyan (w.e.f August 25, 2014)

Madhav Pai (upto July 15, 2013)

Ambreesh Mahajan (upto December 16, 2013)

Vinayak K. Purohit (upto August 17, 2012)

Rakshit Desai (upto July 16, 2012)

(iii) Relatives of Lili Menon Key Management Personnel

7. Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding as at March 31, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

8. Derivative Instruments

The Company uses Forward Exchange Contracts to hedge against its foreign currency exposures related to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

9. Merger of Sterling Holiday Resorts (India) Limited

The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited ("TCISIL") & Sterling Holiday Resorts (India) Limited ("Sterling") have at their meetings held on February 7, 2014 approved a composite scheme of arrangement and amalgamation pursuant to which there will be: (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company. Pursuant to the scheme, (i) 116 equity shares of the Company will be issued to the shareholders of Sterling for every 100 equity shares held in Sterling in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company will be issued to the shareholders of Sterling for every 100 equity shares held in Sterling in consideration of the amalgamation of residual Sterling into the Company.

Appointed date for the composite scheme is April 1, 2014 and the same is subject to regulatory approvals as deemed necessary.

Further, the Company had agreed to subscribe to 36,000,000 equity shares of TCISIL, a wholly owned subsidiary of the Company, having face value of Rs. 10 each for an aggregate consideration of Rs. 7,200,000,000 at a premium of Rs. 190 per share, of which 29,000,000 shares for an aggregate consideration of Rs. 5,800,000,000 including premium of Rs. 5,510,000,000 have been subscribed to as on March 31, 2015.

TCISIL has utilised part of these funds for the acquisition of shares of Sterling, as follows: (i) 20,650,000 under share subscription agreement (ii) 17,045,534 from certain existing share holders of Sterling (iii) 10,209 under an open offer in terms of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and (iv) 11,863,334 shares under share purchase agreement. Accordingly, TCISIL's stake in Sterling increased to 53.42% on September 3, 2014, and as such, Sterling became a subsidiary of TCISIL in accordance with Accounting Standard (AS) 21 issued by the ICAI.

Sterling's application for the composite scheme of arrangement and amalgamation has been approved by the Honourable Madras High Court on April 13 , 2015. However, up to the date of preparation of these financial statements, the Company and TCISIL have not received the order of the Honourable Bombay High Court and accordingly, the Scheme is not yet effective. Hence, these financial statements have been prepared without considering the effect of the Scheme.

10. Managerial remuneration aggregating to Rs. 45,371,443/- paid for the period, exceeded the permissible limit as prescribed under Schedule V of the Companies' Act 2013 (which corresponds to Schedule XIII of the Companies' Act, 1956). The Company is in the process of making an application to the Central Government of India, subject to the approval of the shareholders for approval of such excess remuneration paid.

11. CCPS Issue

The Company issued and allotted 6,250,000 CCPS of Rs. 10 each on March 13, 2014 to Fairbridge Capital (Mauritius) Limited at a price of Rs. 800 each which includes a premium of Rs. 790 in order to partly fund the investment made by TCISIL in Sterling. TCISIL issued 25,000,000 equity shares of Rs. 10 each at a premium of Rs. 190 to the Company.

12. Employees of the Company and other parties misappropriated assets aggregating to Rs. 19,288,585 during the period. The Company has recovered Rs.3,212,962 so far. The cases are under investigation and the Company has taken steps for recovering the balance amount.

13. During the period, the Company has changed its financial year from December 31 to March 31. Accordingly, the figures for the current period are for the fifteen months period from January 1, 2014 to March 31,2015 and are therefore not comparable with those of the previous year.

14. Previous year figures have been reclassified wherever necessary to conform to this period's classification.


Dec 31, 2013

1 Contingent Liabilities As at As at December 31, 2013 December 31, 2012

Contingent Liabilities

(i) Claims against the Company not acknowledged as debts:

Demand from Bombay Electricity Supply and Transport (BEST) for Electricity charges 1,961,083 1,961,083

Disputed claims made by clients 2,633,519 2,633,519

(ii) Disputed Income Tax demands 24,202,876 47,097,990

(iii) Disputed Service Tax demands# 3,140,439,678 2,055,698,792

(iv) Disputed Demand for increase in rent raised by Brihanmumbai Municipal Corporation 53,750,060 49,615,440

Notes:

Future cash outflows in respect of (i) to (iv) above are determinable only on receipt of judgments/decisions pending with various forums/ authorities.

* Disputed Service Tax demands include matters in respect of Outbound Tours to the extent of Rs. 3,093,295,602. In this respect, the Central Excise Service Tax Appellate Tribunal, New Delhi, vide its order dated December 10, 2013, in case of the Company''s wholly owned subsidiary, Travel Corporation (India) Limited, has ruled that Service Tax is not applicable on Outbound Tours to the extent that services are rendered abroad.

The said order is expected to hold good for the litigation of the aforesaid issue of Service Tax on Outbound tours in case of the Company, currently amounting to Rs. 3,093,295,602.

2 Employees Stock Option Schemes

Thomas Cook Employees Stock Option Plan -2007

The Company has established an Employee Stock Option Plan called - "Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are :

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) -2010

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

Thomas Cook Employees Stock Option Plan -2013

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2013". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.

The objectives of this plan are :

(a) to reward the Senior Employees of the Company for their performance

(b) to motivate them to contribute to the growth and profitability of the Company and

(c) to retain talent in the organization

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.

During the year ended December 31, 2013, a total of 142,597 (Previous Year -1,151,332) equity shares of Rs. 1 each were issued and allotted under the Thomas Cook Employee Stock Option Plan - 2007. Consequently, the issued and paid up Equity Share Capital has increased to 247,680,897 shares.

The Company has granted share options under the Company''s Employees Stock Option Plan and share options outstanding as at December 31, 2013 are 7,508,101 (Previous Year - 3,042,009). Of these 3,973 (Previous Year - 58,140) option have vested in 2008, 214,347 (Previous Year - 330,180) have vested in 2009,197,680 (Previous Year - 330,180) have vested in 2010,102,205 (Previous Year - 180,539) have vested in 2011, 741,862 (Previous Year - 748,701) have vested in 2012, 342,015 (Previous Year - 1,116,997) have vested in 2013,1,000,915 (Previous Year - 277,272) will vest in 2014, 351,334 (Previous Year - Nil) will vest in 2015, 351,332 (Previous Year - Nil) will vest in 2016 and 4,202,438 (Previous Year - Nil) will vest after 2017 but not later than 2020.

3 Related Party Disclosures

(A) Enterprises where control exists (i) Holding Company

Fairbridge Capital (Mauritius) Limited, Mauritius holds 74.96% of Equity Shares of the Company. Fairbridge Capital (Mauritius) Limited is a step down subsidiary of Fairfax Financial Holdings Limited, Canada the Ultimate Holding Company.

(ii) Subsidiary Companies

Travel Corporation (India) Limited

Thomas Cook Insurance Services (India) Limited

Indian Horizon Travel and Tours Limited

Thomas Cook Tours Limited

TC Visa Services (India) Limited

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited

Thomas Cook Lanka (Private) Limited (w.e.f August 1, 2012)

IKYA Human Capital Solutions Limited (w.e.f May 14, 2013)

Avon Facility Management Services Limited (w.e.f May 14, 2013)

Magna Infotech Limited (w.e.f May 14, 2013)

CoAchieve Solutions Private Limited (w.e.f May 14, 2013)

Magna IKYA Infotech Inc. (w.e.f May 28, 2013)

(B) Other Related Parties with whom the Company had transactions during the year

(i) Fellow Subsidiaries Fairfax (Barbados) International Corp.

(ii) Key Management Personnel Madhavan Menon

R. R. Kenkare

Debasis Nandy

Mahesh Iyer

Rajeev Kale

Amit Madhan

Madhav Pai (upto July 15, 2013)

Ambreesh Mahajan (upto December 16, 2013)

Vinayak K. Purohit (upto August 17, 2012)

Rakshit Desai (upto July 16, 2012)

(iii) Relatives of Key Management Lili Menon Personnel

4 Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding as at December 31, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5 Institutional Placement Programme Issue

The Company issued and allotted 34,379,606 equity shares for cash at a price of Rs. 53.50 per equity share (including securities premium of Rs. 52.50 per equity share) aggregating to Rs. 1,839,308,921 by way of an IPP, on May 7, 2013, under Chapter Vlll-A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, with the conditions prescribed by SEBI, vide its letters dated March 8,2013 and April 15,2013. Upon issue of equity shares under the IPP on May 7, 2013, the promoter, Fairbridge Capital (Mauritius) Limited''s shareholding in Thomas Cook (India) Limited has reduced from 87.1% to 74.96% currently, in line with Clause 40A(ii)(d) of the Equity Listing Agreement.

6 Acquisition of IKYA

On May 14, 2013, the Company acquired 74.85% equity stake on a fully diluted basis in IKYA comprising of 7,525,914 Equity Shares of Rs. 10 each fully paid-up, 3,529,672 0.005% Mandatorily Convertible Preference Shares of Rs. 40 each fully paid-up (Tranche I), 1,873,333 0.005% Mandatorily Convertible Preference Shares of Rs. 15 each fully paid-up (Tranche II) and 7,717,912 0.001% Mandatorily Convertible Preference Shares of Rs. 100 each fully paid-up for a total consideration of Rs. 2,563,185,705. On October 18, 2013, Tranche I and Tranche II Preference Shares were converted into fully paid up 5,403,005 Equity Shares of Rs. 10 each. Accordingly, 12,928,919 fully paid-up Equity Shares of Rs. 10 each and 7,717,912 fully paid-up Mandatorily Convertible Preference Shares of Rs. 100 each are held in IKYA representing 77.29% of the total Paid up Capital as at the Balance Sheet date. Expenses related to the acquisition amounted to Rs. 29,309,091 and have been included in the cost of the Equity Shares held as at the Balance Sheet date.

7 Merger of Sterling Holiday Resorts (India) Limited

The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited ("TCISIL") & Sterling Holiday Resorts (India) Limited ("Sterling") have at their meetings held on February 7, 2014 approved a composite scheme of arrangement and amalgamation pursuant to which there will be: (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company. Pursuant to the scheme, (i) 116 equity shares of the Company will be issued to the shareholders of Sterling for every 100 equity shares held in Sterling in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company will be issued to the shareholders of Sterling for every 100 equity shares held in Sterling in consideration of the amalgamation of residual Sterling into the Company.

Further, the Company has agreed to subscribe to 36,000,000 equity shares of Thomas Cook Insurance Services (India) Limited, a wholly owned subsidiary of the Company, having face value of Rs. 10 each for an aggregate consideration of Rs. 7,200,000,000 at a premium of Rs. 190 per share. TCISIL will be using such funds for acquisition of shares of Sterling, including as follows: (i) subscription to 20,650,000 equity shares of Sterling, (ii) purchase of upto 18,007,677 equity shares of Sterling from certain existing shareholders, and (iii) an open offer for 26% of the diluted share capital of Sterling, in terms of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

In order to partly fund the investment proposed to be made by TCISIL in Sterling, the parent of the Company, being Fairbridge Capital (Mauritius) Limited has agreed to subscribe to compulsorily convertible preference shares to comply with the provisions of the FDI Policy, subject to receipt of applicable approvals and consents. Accordingly, the Company has proposed to create, offer, issue and allot in one or more tranches, on private placement and/or preferential basis, up to 6,250,000 compulsorily convertible preference shares of Rs. 10 each (CCPS) at a price of Rs. 800 each which includes a premium of Rs. 790 per CCPS of the Company, each such CCPS being convertible into 10 equity shares of the Company having face value of Rs. 1 each to Fairbridge Capital (Mauritius) Limited.

All of the aforesaid transactions are subject to conditions precedent and regulatory approvals, as deemed necessary.

8 As reported, employees of the Company and other parties misappropriated assets aggregating to Rs. 9,899,598 during the year. The Company has recovered Rs. 2,055,466 so far. The cases are under investigation and the Company has taken steps for recovering the balance amount.

9 Previous year figures have been reclassified to conform to this year''s classification.


Dec 31, 2012

1 General Information :

Thomas Cook (India) Limited (the "Company") is a Public Limited Company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged in diversified businesses primarily working as Authorised Foreign Exchange Dealer. The Company is also engaged in Tour and Travel Business and working as Travel Agent and Tour Operator.

(a) Rights, preferences and restrictions attached to shares

Equity Shares:-The Company has one class of equity shares having a par value of Rs. 1/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution to preference shareholders of all preferential amounts, in proportion to their shareholding. Preference Shares:- 319,765 ''Class B'' 0.001% Cumulative Convertible / Redeemable Preference Shares of Rs. 10 each and 271,800 ''Class C'' 0.001% Cumulative Convertible / Redeemable Preference Shares of Rs. 10 each were issued on 7th February, 2007 to the erstwhile shareholders of LKP Merchant Financing Limited (presently known as LKP Finance Limited) pursuant to the Scheme of Amalgamation without payment being received in cash. The terms of redemption of these preference shares are given in Note (f).

(b) Terms of securities convertible into Equity Shares Class B Preference Shares :-

If the EPS of the Company for any financial year during the Earn out period first exceeds Rs. 30.30/-, each Class B Preference Share shall be converted into 1 (One) equity share of the Company within 6 (six) months from the expiry of the said Financial Year. The number of the equity shares to be issued upon conversion of the Class B Preference shares shall be proportionately adjusted in case of any subdivision of equity shares or Bonus issues of equity shares during the Earn Out period. Provided however that if the EPS of the Company does not exceed Rs. 30.30/- for any Financial Year comprised in the Earn Out period , each Class B Preference share shall be redeemed by the Company at par within 6 (Six) months from the expiry of the Earn Out period.

Class C Preference Shares :-

If the EPS of the Company for any financial year during the Earn out period first exceeds Rs. 36.40, each Class C Preference Share shall be converted into 1 (one) equity share of the Company within 6 (six) months from the expiry of the said Financial Year. The number of the equity shares to be issued upon conversion of the Class C Preference shares shall be proportionately adjusted in case of any subdivision of equity shares or Bonus issues of equity shares during the Earn Out period. Provided however that if the EPS of the Company does not exceed Rs. 36.40 for any Financial Year comprised in the Earn Out period , each Class C Preference share shall be redeemed by the Company at par within 6 (Six) months from the expiry of the Earn Out period.

Pursuant to sub division of equity share capital of Company in May 2007, wherein the face value of one equity share of Rs. 10 each was sub-divided into ten equity share of Rs. 1 each, the aforesaid EPS figures have respectively been adjusted to Rs. 3.03/- and Rs. 3.64/- per the terms of issue of those shares. Both Class B and Class C Preference Shares will be due for redemption on 31st December, 2013 if not converted before the said date.

2 Employees Stock Option Schemes

Thomas Cook Employees Stock Option Plan -2007

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on 23rd March, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are :

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual installments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) -2010

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on 14th December, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

During the year ended December 31, 2012, a total of 1,151,332 (Previous Year-199,663) equity shares of Rs. 1 each were issued and allotted under the Thomas Cook Employee Stock Option Plan - 2007. Consequently, the issued and paid up Equity Share Capital has increased to 213,158,694 shares.

The Company has granted share options under the Company''s Employees Stock Option Plan and share options outstanding as at December 31, 2012 are 3,042,009 (Previous Year - 5,924,654). Of these 58,140 (Previous Year -129,973) option have vested in 2008, 330,180 (Previous Year - 500,347) have vested in 2009, 330,180 (Previous Year - 615,992) have vested in 2010, 180,539 (Previous Year - 1,163,709) have vested in 2011, 748,701 (Previous Year - 1,372,818) have vested in 2012 and 1,116,997 (Previous Year - 1,675,873) will vest in 2013, 277,272 (Previous Year - 465,942) will vest in 2014.

(b) Defined Benefit Plans

The disclosures in respect of gratuity, a defined benefit scheme (based on Actuarial Valuation) are as follows -

This does not include gratuity liability of Rs. Nil (Previous Year Rs. 629,138) and charge of Rs. 16,555 (Previous YearRs. 176,040) in respect of Sri Lanka branch.

* The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

** The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

*** The estimates of the future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

3 The entire Promoter Shareholding of 163,471,449 Equity Shares of the Company that was pledged on January 10, 2012 was released from pledge on August 14, 2012. The aforesaid Promoters'' stake was transferred to Fairbridge Capital (Mauritius) Limited ("Fairbridge"), a step down subsidiary of Fairfax Financial Holdings Limited, Canada, on August 14, 2012 at Rs. 50/- per equity share in terms of the share purchase agreement amongst themselves. Further, Fairbridge has acquired 22,182,276 shares from the Non-promoters through the open offer at a price of Rs. 65.48/- per equity share in terms of the provisions of Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, which was transferred to it on August 14, 2012. The same was communicated to the Stock Exchanges at the relevant times.

4 Related Party Disclosures

(A) Enterprises where control exists

(i) Holding Company Fairbridge Capital (Mauritius) Limited, Mauritius holds 87.10% of Equity Shares of the Company.

Fairbridge Capital (Mauritius) Limited is a step down subsidiary of Fairfax Financial Holdings Limited, Canada the Ultimate Holding Company.

(ii) Subsidiary Companies Travel Corporation (India) Limited

Thomas Cook Insurance Services (India) Limited

Indian Horizon Travel and Tours Limited

Thomas Cook Tours Limited

TC Visa Services (India) Limited

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited

Thomas Cook Lanka (Private) Limited (w.e.f 1st August, 2012)

(B) Other Related Parties with whom the Company had transactions during the year

(i) Fellow Subsidiaries Thomas Cook AG, Germany (upto 14th August, 2012)

Thomas Cook Tour Operations Limited, UK (upto 14th August, 2012)

Thomas Cook Signature Limited, UK (upto 14th August, 2012)

Neckermann Reisen, Germany (upto 14th August, 2012)

Thomas Cook Overseas Limited, Egypt (upto 14th August, 2012)

(ii) Key Management Personnel Madhavan Menon

R. R. Kenkare

Madhav Pai (w.e.f 17th August 2012)

Ambreesh Mahajan (w.e.f 15th November 2012)

Debasis Nandy (w.e.f 18th August 2012)

Vinayak K. Purohit (upto 17th August 2012)

Rakshit Desai (upto 16th July 2012)

Dr. D. Prasanth Nair (upto 10th May 2012)

Amitabh Pandey (upto 31st August 2012)

(iii) Relatives of Key Management Lili Menon Personnel

5 Employees of the Company and other parties misappropriated assets aggregating to Rs. 5,333,646 during the year. The Company has recovered Rs. 3,357,363 so far. The cases are under investigation and Company has taken steps for recovering the balance amount.

6 Acquisition of 74% stake in IKYA Human Capital Solutions

On 5th February, 2013 the Company has signed an investment agreement for acquiring 74 % interest in IKYA Human Capital Solutions Private Limited for a consideration of Rs. 2,563 million. The transaction is subject to various closing conditions, conditions precedent as well as any regulatory approvals as deemed to be necessary.

7 Transfer of Sri Lanka Business

During the current year, the Company has transferred its Sri Lanka Branch business to its wholly owned subsidiary Thomas Cook Lanka (Private) Limited with effect from 1st August, 2012 for a consideration of Rs. 47.50 million. Consequently the results for current year includes results for the Sri Lanka branch for 7 months period ended 31st July 2012. Accordingly, the figures of the current year are not comparable with those of the previous year.

8 Previous Year Figures

The financial statements for the year ended December 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended December 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification. The adoption of Revised Schedule VI for previous year figures has not impacted recognition and measurement principles followed for preparation of financial statements.


Dec 31, 2011

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 6,060,554 (Previous Year Rs 12,326,038).

As at As at 31st December, 2011 31st December, 2010 Rupees Rupees

(b) Contingent Liabilities

(i) Claims against the company not acknowledged as debts:

- Demand from Bombay Electricity Supply and Transport (BEST) for Electricity 1,961,083 1,961,083

- Revocation of Bank Guarantee given to Airport Authority of India 5,387,244 -

(ii) Disputed Income-tax Demands 20,555,770 -

(iii) Disputed Service Tax Demands 1,288,637,350 686,383,970

(iv) Disputed Demand for increase in rent raised by Brihanmumbai Municipal Corporation 45,480,820 41,346,200

(v) Disputed Value Added Tax Demands - 3,182,594

Note:

Future cash outflows in respect of above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

(c) The tax year for the company being the year ending 31st March, the provision for taxation for the year is the aggregate of the provision made for the three months ended 31st March, 2011 and the provision based on the figures for the remaining nine months up to 31st December, 2011, the ultimate tax liability of which will be determined on the basis of the figures for the period 1st April, 2011 to 31st March, 2012.

(d) Micro and Small Scale Business Entities

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding as at 31st December, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(e) Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

a) Charge to the Profit and Loss Account towards Contribution to Provident and Other Funds (including Acturial Loss on Provident Fund of Rs 2,966,256) amounts to Rs 58,454,195 (Previous Year Rs 48,390,716).

b) The disclosures in respect of gratuity, a defined benefit scheme (based on Actuarial Valuation) are as follows -

This does not include gratuity liability of Rs 629,138 (Previous Year Rs 469,356) and charge of Rs 176,040 (Previous Year Rs 88,139) in respect of Sri Lanka branch.

(f) Employee Stock Options :

Thomas Cook Employees Stock Option Plan - 2007.

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on 23rd March, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are :

(a) Motivate talent in the organization with a view to achieve long term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual installments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) - 2010.

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on 14th December, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme - 2010 are same as Thomas Cook Employees Stock Option Plan -2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

(g) Exceptional Item in the previous year represents Rs 100,000,000 received as compensation towards termination of Non Compete Agreement for the LKP Forex Acquisition.

(h) Derivative Instruments

The Company uses Forward Exchange Contracts to hedge against its foreign currency exposures related to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(i) Employees of the Company and other parties misappropriated assets aggregating to Rs 5,430,000 (Previous Year Rs 5,620,000) during the year. The Company has recovered Rs 5,070,000 so far. The cases are under investigation and Company has taken steps for recovering the balance amount.

(j) The entire Promoter Shareholding of 77.1% has been pledged on 10th January, 2012. Subsequently on 8th February, 2012 Thomas Cook Group plc - the ultimate holding company of Thomas Cook (India) Limited has announced the launch of formal sale process for its 77.1% shareholding in Thomas Cook (India) Limited.

(k) Previous year figures have been regrouped where necessary.


Dec 31, 2010

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 12,326,038 (Previous YearRs. 5,306,211).

As at As at 31st December, 2010 31st December, 2009 Rupees Rupees

(b) Contingent Liabilities

(i) Claims against the Company not acknowledged as debts:

Demand from Bombay Electricity Supply and Transport (BEST) for Electricity 1,961,083 1,961,083

(ii) Disputed Income-tax Demands - 57,600,535

(iii) Disputed Service Tax Demands 686,383,970 238,730,410

(iv) Disputed Demand for increase in rent raised by Brihanmumbai Municipal Corporation 41,346,200 37,211,580

(v) Disputed Value Added Tax Demands 3,182,594 --

(vi) Corporate Guarantee given to a bank for the credit facilities extended by the said bank to Thomas Cook (Mauritius) Operations Company Limited - 69,795,000

Note:

Future cash outflows in respect of (i) to (v) above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

(c) The tax year for the Company being the year ending 31st March, the provision for taxation for the year is the aggregate of the provision made for the three months ended 31st March, 2010 and the provision based on the figures for the remaining nine months up to 31st December, 2010, the ultimate tax liability of which will be determined on the basis of the figures for the period 1st April, 2010 to 31st March, 2011.

(d) Micro and Small Scale Business Entities

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding as at 31st December, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(i) Related Party Disclosures

(A) Enterprises where control exists (i) Holding Company

TCIM Limited, UK holds 55.77% of Equity Shares of the Company. Thomas Cook UK Limited, the Holding Company of TCIM Limited, UK owns 21.41% of Equity Shares of the Company. Thomas Cook UK Limited is a step down subsidiary of Thomas Cook Group pic, the ultimate holding company.

(ii) Subsidiary Companies

Travel Corporation (India) Limited

Thomas Cook Insurance Services (India) Limited

Indian Horizon Travel and Tours Limited

Thomas Cook Tours Limited

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited

(B) Other Related Parties with whom the Company had transactions during the year

(i) Fellow Subsidiaries

Thomas Cook AG, Germany Thomas Cook Tour Operations Limited, UK Thomas Cook Signature Limited, UK Thomas Cook Reisen, Germany Neckermann Reisen, Germany Thomas Cook Overseas Limited, Egypt

(ii) Key Management Personnel

Madhavan Menon Vinayak K. Purohit Rakshit Desai Amitabh Pandey Dr. Prasanth Nair R. R. Kenkare

(iii) Relatives of Key Managemenl Personnel

Lili Menon

(d) Revenue includes:

(i) Brokerage and Incentives paid netted off Rs. 368,774,136 (Previous Year Rs. 243,486,572).

(ii) Exchange loss on revaluation of Nostra and other Bank Accounts used for holding foreign currency for travel business Rs. 36,210,634 (Previous YearRs. 10,913,354).

(e) The Company had considered Non-Compete Fees amounting to Rs. 220,000,000 paid during the financial year ended 31st December, 2007 as an allowable expenditure for the purpose of computing the provision for tax. In the current year, the Company has received an assessment order from the Income Tax authorities in respect of the assessment year 2007-08. This order has allowed the deduction of non compete fees of Rs. 220,000,000 prorated equally over assessment years 2007-08, 2008-09 & 2009-10 respectively. The necessary adjustments for the year wise provision for tax have been made in the books of account.

(f) Employee Stock Options:

Thomas Cook Employees Stock Option Plan -2007.

The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on 23rd March, 2007.

The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999. The exercise price is as governed by the guidelines issued by SEBI.

The objectives of this plan are:

(a) Motivate talent in the organization with a view to achieve long-term business goals.

(b) Retain key talent in the organization

(c) Foster ownership and motivation.

The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual installments on each of the anniversaries from the Grant Date.

Thomas Cook Save As You Earn (SAYE) - 2010.

Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on 14th December, 2010, by the shareholders by means of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.

The objectives of the SAYE Scheme - 2010 are same as Thomas Cook Employees Stock Option Plan - 2007.

SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of TCIL at the predetermined Exercise Price or withdraw the Monthly Savings Contributions along with Interest accrued.

Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) shares. The maximum number of shares that may be issued/ transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) shares.

Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.

(g) Exceptional Item represents Rs. 100,000,000 received as compensation towards termination of Non-Compete Agreement for the LKP Forex Acquisition.

(h) Payroll cost and other expenses are net of reimbursement from Travel Corporation (India) Limited towards common expenses incurred for Leisure Inbound business aggregating to Rs. 53,957,769.

(i) Derivative Instruments

The Company uses Forward Exchange Contracts to hedge against its foreign currency exposures related to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(j) Employees of the Company and other parties misappropriated assets aggregating to Rs. 5,620,000 (Previous Year Rs. 4,987,000) during the year. The Company has recovered Rs 350,000 so far .The cases are under investigation and Company has taken steps for recovering the balance amount.

(k) During the year ended 3Tst December, 2009, the Management had reviewed the operations of its various divisions and branches, and based on this review the Management has restructured its businesses/branches and centralised travel operation, thereby incurred a personnel cost of Rs. 79,034,878.

(l) Previous year figures have been regrouped where necessary.


Dec 31, 2009

(a) The tax year for the Company being the year ending 31st March, the provision for taxation for the year is the aggregate of the provision made for the three months ended 31st March, 2009 and the provision based on the figures for the remaining nine months up to 31st December, 2009, the ultimate tax liability of which will be determined on the basis of the figures for the period 1st April, 2009 to 31st March, 2010.

(b) Micro and Small Scale Business Entities

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding as at 31st December, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(i) Related Party Disclosures

(A) Enterprises where control exists

(i) Holding Company

TCIM Limited, UK holds 55.87% of Equity Shares of the Company. Thomas Cook UK Limited, the Holding Company of TCIM Limited, UK owns 21.45% of Equity Shares of the Company. Thomas Cook UK Limited is a step down subsidiary of Thomas Cook Group pic, the ultimate holding company.

(ii) Subsidiary Companies

Travel Corporation (India) Limited

Thomas Cook Insurance Services (India) Limited

Indian Horizon Travel and Tours Limited

Thomas Cook Tours Limited

Thomas Cook (Mauritius) Holding Company Limited

Thomas Cook (Mauritius) Operations Company Limited

Thomas Cook (Mauritius) Holidays Limited

Thomas Cook (Mauritius) Travel Limited

Thomas Cook Lanka Holdings (Private) Limited

Airline Services Lanka (Private) Limited

(B) Other Related Parties with whom the Company had transactions during the year

(i) Fellow Subsidiaries

Thomas Cook AG, Germany Thomas Cook Tour Operations Limited, UK Thomas Cook Signature Limited, UK Thomas Cook Reisen, Germany Neckermann Reisen, Germany Thomas Cook Overseas Limited, Egypt

(ii) Key Management Personnel

Madhavan Menon

Vinayak K. Purohit

Rakshit Desai

Nalini Gupta (upto 17th October, 2009)

Parag Mehta (upto 31st March, 2009)

Amitabh Pandey

Dr. Prasanth Nair

R. R. Kenkare

(iii) Relatives of Key Management Personnel

Lili Menon

(c) Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

a) Charge to the Profit and Loss Account towards Contribution to Provident Fund and Other Fundsamounted to Rs. 46,289,843 (Previous YearRs. 47,368,802)

b) The disclosures in respect of gratuity, a defined benefit scheme (based on Actuarial Valuation) is as follows -

This does not include gratuity liability of Rs. 371,616 (Previous Year Rs. 292,906) and charge of Rs. 98,156 (Previous Year Rs. 208,620) in respect of Sri Lanka branch.

(d) Turnover includes:

(i) Brokerage and Incentives paid netted off Rs. 243,486,572 (Previous Year Rs. 240,993,930).

(ii) Exchange loss on revaluation of Nostra and other Bank Accounts used for holding foreign currency for travel business Rs. 10,913,354 (Previous Year profit Rs. 24,409,780).

(e) The Company has considered Non-Compete Fees amounting to Rs. 220,000,000 paid during the financial year ended 31st December, 2007 as an allowable expenditure for the purpose of computing the provision for tax for the year ended 31st December, 2007 based on legal opinion. The assessment proceedings for the relevant assessment year have not been completed.

(f) The Company has appointed an Executive Director for a period of two years with effect from 25th November, 2008 and the Company has paid remuneration of Rs. 2,473,348 and Rs. 23,568,159 for the years ended 31st December, 2008 and 31st December, 2009 respectively. The appointment and remuneration of the said Executive Director was approved by the members in the Annual General Meeting held on 28th May, 2009 but approval of the Central Government of India for which an application has been made is still awaited.

Managerial remuneration aggregating Rs. 55,354,659 [including Rs. 23,568,159 paid to Executive Director referred in paragraph above] for the year paid/payable to the directors, which exceeded the permissible limits as prescribed under Schedule XIII of the Act, is subject to approval of the Central Government of India. The Company is in the process of obtaining an approval from the Central Government of India for the excess remuneration.

(g) The Management has reviewed the operations of its various Divisions and Branches, and based on this review, the Management has:

(a) Restructured during the year its businesses/branches and centralized travel operations, thereby incurred personnel cost of Rs. 79,034,878.

(b) Closed the travel/forex branches in previous year and incurred a sum of Rs. 13,566,679 on account of personnel cost, professional fees and loss on disposal of assets.

(h) During the previous year, the Company came out with Rights issue of 56,278,554 fully paid-up Equity shares in ratio of 35 (thirty five) fully paid up equity shares for every 100 (hundred) fully paid up Equity Share held by the existing shareholders on the record date 27th December, 2008. Pursuant to this the Company at its Committee meeting held on 21st January, 2009 allotted 50,650,699 fully paid up Equity Shares of Re. 1/- each for cash at a price of Rs. 35.50 (including a share premium of Rs. 34.50) per equity share aggregating to Rs. 1,798,099,815.

(i) During the year ended 31st December, 2009, the Company has redeemed preference shares of Rs. 1,050,000,000. The premium on redemption of Rs. 105,287,671 has been adjusted against share premium account arising out of Right issue of equity shares.

(j) Derivative Instruments

The Company uses Forward Exchange Contracts to hedge against its foreign currency exposures related to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(k) Employees of the Company and other parties misappropriated assets aggregating to Rs. 4,987,000 (Previous YearRs. 7,251,682) during the year. The Company has recovered Rs. 750,000 so far. The cases are under investigation and Company has taken steps for recovering the balance amount. There is no open exposure on the profit for the year in respect of misappropriated assets except for Rs. Nil (Previous YearRs. 751,100).

(l) Previous year figures have been regrouped where necessary.

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