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Directors Report of Indian Hotels Company Ltd.

Mar 31, 2023

The Directors take pleasure in presenting the Integrated Annual Report of The Indian Hotels Company Limited (the Company or IHCL) along with the Audited Financial Statements for the Financial Year ended March 31, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Financial Results

('' crores)
	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue	3,704.24	2,003.34	5,809.91	3,056.22
Other income	107.08	149.08	138.90	155.16
Total income	3,811.32	2,152.42	5,948.81	3,211.38
Expenses Operating expenditure	2,314.53	1,615.07	4,005.35	2,651.47
Depreciation and amortisation expenses	207.85	203.03	416.06	406.05
Total Expenses	2,522.38	1,818.10	4,421.41	3,057.52
Profit/ (Loss) before finance cost and tax	1,288.94	334.32	1,527.40	153.86
Finance cost	128.29	304.50	236.05	427.66
Profit/ (Loss) before Exceptional Items, Tax and share of equity accounted investees	1,160.65	29.82	1,291.35	(273.80)
Add/ (Less): Exceptional Items	(21.68)	(56.93)	3.29	15.62
Profit/ (Loss) before Tax and share of equity accounted investees (PBT)	1,138.97	(27.11)	1,294.64	(258.18)
Tax expense	295.94	7.34	323.21	(35.78)
Profit/ (Loss) after Tax before share of equity accounted investees	843.03	(34.45)	971.43	(222.40)
Add: Share of Profit/(Loss) of Associates and Joint Ventures net of tax	NA	NA	81.40	(42.57)
Profit/ (Loss) for the year	843.03	(34.45)	1,052.83	(264.97)
Attributable to:
Shareholders of the Company	843.03	(34.45)	1,002.59	(247.72)
Non-Controlling Interest	NA	NA	50.24	(17.25)
Opening Balance of Retained Earnings	174.67	250.64	(1,048.66)	(760.70)
Profit/(Loss)for the Year	843.03	(34.45)	1,002.59	(247.72)
Other comprehensive income/ (losses)	(13.50)	6.05	(15.04)	7.37
Total comprehensive income	829.53	(28.40)	987.55	(240.35)
Dividend Paid	*(56.82)	(47.57)	*(56.82)	(47.57)
Adjustments on account of change in non-controlling interest	-	^-	^-	(0.04)
Closing Balance of Retained Earnings	947.38	174.67	(117.93)	(1,048.66)
*Dividend declared in FY 2021-22 and paid during the year under review.

2. Dividend

The Board recommended a dividend of ''1 per fully paid Equity Share on 1,42,04,00,342 Equity Shares of face value ''1 each, for the year ended March 31, 2023 (Previous year ''0.40 per share) based on the parameters laid down under the Dividend Distribution Policy.

The dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting (AGM) scheduled to be held on Friday, June 16, 2023. The dividend once approved by the Shareholders will be paid on and after Friday, June 23, 2023.

The dividend on Equity Shares if approved by the Members, would involve a cash outflow of ''142.04 crores resulting in a dividend pay-out of 17% of the standalone profits of the Company.

3. Transfer to Reserves

During the year under review, an amount of ''51.81 crores was transferred from Debenture Redemption Reserve to General Reserve consequent to the redemption of Unsecured Non-Convertible Redeemable Debentures of ''495 crores. The Board of Directors has decided to retain the entire amount of profit for FY 2022-23 appearing in the Statement of profit and loss.

4. Share Capital

During the year under review, the Company had allotted 740 equity shares of ''1 each arising out of previous rights issues to one of the shareholders of the Company whose shares were kept in abeyance. As a result of such allotment, the paid-up share capital of the Company increased from ''142,03,99,602 (comprising 142,03,99,602 equity shares of ''1 each) to ''142,04,00,342 (comprising 142,04,00,342 equity shares of ''1 each). The equity shares so allotted rank pari-passu with the existing equity shares of the Company. Except as stated herein, there was no other change in the share capital of the Company.

5. Company''s Performance Standalone Performance

On a standalone basis, the Total income for FY 2022-23 was ''3,811.32 crores, which was higher than the previous year''s Total income of ''2,152.42 crores by 77% consequent to opening of the global economy, increased mobility and travel and higher demand for accommodation and food and beverages, especially from domestic tourism. Operating expenditure increased by 43% to ''2,314.53 crores in FY 2022-23 from ''1,615.07 crores in the previous year mainly due to increase in business volumes. The Company witnessed robust growth in volumes and rates across all its brands with increase in margins. Depreciation for FY 2022-23

at ''207.85 crores was marginally higher than that of FY 2021-22 due to renovations and refurbishments. Finance costs for FY 2022-23 at ''128.29 crores was lower than FY 2021-22 by ''176.21 crores due to repayment of debt from proceeds of equity issues during the year. The Company maintained a good liquidity position throughout the year to end with ''1,466.32 crores of liquidity against a debt of ''450.08 crores and thus maintained its position of zero net debt. Exceptional loss for the year ''21.68 crores (Previous year ''56.93 crores) represented a provision for impairment due to losses in overseas subsidiaries. After accounting for taxes, the Company reported a Profit after tax for FY 2022-23 of ''843.03 crores in comparison with a loss of ''34.45 crores for FY 2021-22.

Consolidated Performance

Consolidated Total Income for FY 2022-23 was ''5,948.81 crores, higher by 85% than the previous year''s Total Income of ''3,211.38 crores. Operating expenditure increased to ''4,005.35 crores in FY 2022-23 from ''2,651.47 crores in FY 2021-22, an increase of 51% mainly due to increase in business volumes. Depreciation at ''416.06 crores for FY 2022-23 was marginally higher than that of FY 2021-22. Finance costs for FY 2022-23 at ''236.05 crores was lower than FY 2021-22 by ''191.61 crores due to repayment of debt, including that in a subsidiary company from proceeds of equity issues during the year. Exceptional gains for the year of ''3.29 crores (Previous year ''15.62 crores) was due to a profit on sale of hotel property in a subsidiary offset by an exchange loss on long-term borrowings. Along with the parent company, all subsidiaries, joint ventures and associates registered excellent growth in business volumes and profitability during FY 2022-23. The Group registered the best-ever performance in every quarter of the year to end the year at record Turnover, EBITDA, EBITDA margins and Profit after Tax. At the consolidated level, EBITDA was 32.67% of turnover at ''1,943.46 crores for the year. The Profit after tax attributable to shareholders and non-controlling interests for FY 2022-23 was ''1,052.83 crores as against a loss of ''264.97 crores for FY 2021-22. The profit attributable to shareholders of the Company for FY 2022-23 was ''1,002.59 crores as against a loss of ''247.72 crores for the previous year. The Group generated its highest-ever free cash flow of more than ''1,000 crores during the year and maintained a positive cash position of ''987.43 crores at the end of the year.

Borrowings

Total long-term borrowings of the standalone Company stood at ''449.49 crores as on March 31, 2023 as against ''942.53 crores as on March 31, 2022. On a consolidated basis, total long-term borrowings stood at ''818.26 crores as on March 31, 2023 as against ''1,984.76 crores as on March 31, 2022.

Debentures

The Company redeemed 4,950, 7.85% Secured Non-Convertible Redeemable Debentures of face value ''10 lakhs each aggregating to ''495 crores on April 13, 2022 and 1,500, 7.50% Unsecured Non-Convertible Redeemable Debentures of face value ''10 lakhs each aggregating to ''150 crores on April 21, 2023.

Capital Expenditure

During FY 2022-23, the Company''s outlay towards capital expenditure was ''329.78 crores for the standalone Company and ''470.59 crores at the consolidated level.

Business Overview

An analysis of the Business and Financial Results are given in the Management Discussion and Analysis, which forms a part of the Annual Report.

6. Subsidiary Companies

The Company has 29 subsidiaries, 5 associates and 6 joint venture companies as on March 31, 2023. There has been no material change in the nature of the business of the subsidiaries.

During the year under review,

i. Two new companies viz. Suisland Hospitality Private Limited and Kadisland Hospitality Private Limited were incorporated as subsidiaries of the Company in August 2022 for the purpose of development of eco-tourism resorts at Suheli and Kadmat Islands in Lakshadweep, respectively.

ii. Bjets Pte. Limited ceased to be an Associate of the Company as it was struck off from the Registrar of Companies, Singapore in September 2022.

iii. Zarrenstar Hospitality Private Limited, earlier an Associate of the Company has now become a subsidiary of the Company effective March 2023.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company''s subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company at https://investor.ihcltata.com/AGM-FY2023.

7. Directors'' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2022-23.

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

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

ii. They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

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

iv. They have prepared the annual accounts on a going concern basis;

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

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

8. Directors and Key Managerial Personnel

In accordance with the requirements of the Act and the Company''s Articles of Association, Mr. N. Chandrasekaran (DIN: 00121863) retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholders'' approval for his re-appointment forms part of the Notice.

During the year under review, Mr. Venu Srinivasan retired as a Non-Executive Director of the Company with effect from December 10, 2022, upon reaching the age of retirement for Non-Executive Directors (i.e. 70 years) in accordance with the Governance Guidelines adopted by the Company. The Board places on record its appreciation for his invaluable contribution and guidance provided to the Company over the years.

In terms of Regulation 25(8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Based upon the declarations received from the independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are Independent of the Management. In the opinion of the Board, there has been no change in the circumstances affecting their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further in terms of Section 150 read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended, the Independent Directors of the Company have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and remuneration and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committees of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2023 are:

â¢ Mr. Puneet Chhatwal - Managing Director & Chief Executive Officer

â¢ Mr. Giridhar Sanjeevi - Executive Vice President & Chief Financial Officer

â¢ Mr. Beejal Desai, Executive Vice President -Corporate Affairs & Company Secretary (Group)

9. Number of Meetings of the Board

Five meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms a part of the Annual Report.

10. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure; degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); effectiveness of board processes, information and functioning, etc.; extent of co-ordination and cohesiveness between the Board and its Committees; and quality of relationship between board Members and the management.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) on January 5, 2017.

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

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

11. Policy on Directors'' Appointment and Remuneration and other Details

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act is available on https://www.ihcltata. com/board diversity director attributes.pdf and https://www.ihcltata.com/Remuneration Policy KMP Directors Employees.pdf.

12. Vigil Mechanism

In accordance with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has established the necessary vigil mechanism that provides a formal channel for all its directors, employees and other stakeholders to report concerns about any unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct. The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on https://investor. ihcltata.com/files/IHCL Whistle Blower Policy.pdf

13. Internal Financial Control Systems and their Adequacy

The Company''s internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate.

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which forms a part of the Annual Report.

14. Committees of the Board

a) Audit Committee

b) Nomination and Remuneration Committee

c) Corporate Social Responsibility and Sustainability (ESG) Committee

d) Risk Management Committee

e) Stakeholders'' Relationship Committee

During the year under review, all recommendations of the Committees were approved by the Board. The details including the composition of the Committees including attendance at the Meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report.

15. Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022. For other details regarding the CSR and Sustainability (ESG) Committee, please refer to the Corporate Governance Report, which is a part of the Annual report. The CSR policy is available on https://www.ihcltata.com/ CSR Policy.pdf.

16. Auditors

Statutory Auditor and Statutory Auditor''s Report

At the 121^st AGM of the Company held on June 30, 2022, the Members approved the re-appointment of B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as the Statutory Auditors of the Company to hold office for a second term of five consecutive years, from the conclusion of the 121^st AGM till the conclusion of the 126^th AGM of the Company to audit and examine the books of account of the Company.

The Statutory Auditors'' Report on the Financial Statements of the Company for FY 2022-23 does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, in the year under review.

Secretarial Auditor and Secretarial Auditor''s Report

In terms of Section 204 of the Act and Rules made thereunder, Neville Daroga & Associates, Practicing Company Secretary (C.P. No. 3823) were appointed as Secretarial Auditors of the Company to conduct the Secretarial Audit of records and documents of the Company for FY 2022-23 and their report is annexed as Annexure II to this Report.

The Secretarial Auditor''s Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

For FY 2022-23, the Company does not have any material unlisted Indian subsidiaries. As such the requirement to attach secretarial audit reports of material unlisted Indian subsidiaries pursuant to Regulation 24A (1) of the SEBI Listing Regulations is not applicable to the Company.

Cost Auditors

Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company.

17. Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis which forms a part of the Annual Report.

18. Particulars of Loans, Guarantees or Investments

The Company falls within the scope of the definition ''infrastructure company'' as provided by the Act. Accordingly, the Company is exempt from the provisions of Section 186 of the Act with regards to Loans, Guarantees, Securities provided and Investments. Therefore, no details are provided.

Pursuant to Regulation 34(2) (f) of the SEBI Listing Regulations and its Circular dated May 10, 2021, SEBI has made Business Responsibility & Sustainability Report (BRSR) mandatory for the top 1,000 listed companies (by market capitalisation) from FY 2022-23. IHCL falls within this category and has adopted the BRSR for FY 2022-23 to provide enhanced disclosures on ESG practices and priorities of the Company. The BRSR disclosures form a part of this Report.

As per Regulation 43A of the SEBI Listing Regulations, the Dividend Distribution Policy is disclosed in the Corporate Governance Report and is uploaded on the Company''s website at https://investor.ihcltata.com/ files/IHCL Dividend Distribution Policy.pdf

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

23. Deposits from Public

The Company does not accept and/or renew Fixed Deposits from the general public and shareholders. There were no over dues on account of principal or interest on public deposits including the unclaimed deposits at the end of FY 2022-23 (Previous year ''45,000/-).

24. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo [Pursuant to Companies (Accounts) Rules, 2014]

A. Conservation of Energy: The Company has a longstanding history of stewardship through efficient management of all its assets and resources. The Company''s conscious efforts are aligned with the Tata ethos of keeping communities and environment at the heart of doing business. In line with IHCL''s commitment to safeguard the environment, we have been the flagbearers of responsible tourism through elimination of two million plastic straws across all our properties. Our renewable energy proportion has improved to 35% from 14% in the past six years. We have shifted to renewable power at several of our properties. Green power is sourced on the basis of long-term power purchase agreements to ensure stability of prices and supplies, with the generation

19. Related Party Transactions

In line with the requirements of the Act and the SEBI Listing Regulations, as amended, the Company has formulated a Policy on Related Party Transactions for identifying, reviewing, approving and monitoring of Related Party Transactions and the same can be accessed on the Company''s website at https://www. ihcltata.com/RPT.pdf.

During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms'' Length Basis. All transactions entered into with related parties were approved by the Audit Committee.

None of the transactions with related parties are material in nature or fall under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended, in Form AOC-2 is not applicable to the Company for FY 2022-23 and hence the same is not provided.

20. Annual Return

As provided under Section 92(3) and 134(3)(a) of the Act, the Annual Return in Form MGT-7 for FY 2022-23 is available on the website of the Company at https://investor.ihcltata.com/AGM-FY2023.

21. Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are annexed to this Report as Annexure III.

The statement containing details of employees as required under Section 197(12) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this Report and will be made available to any Member on request at [email protected].

22. Disclosure Requirements

As per SEBI Listing Regulations, the Corporate Governance Report with the Practicing Company Secretary''s Certificate thereon, and the Management Discussion and Analysis are attached as a separate section which forms a part of the Annual Report.

sources being a mix of wind and solar. IHCL has also partnered with Tata Power to install EV charging stations at over 200 IHCL properties. This will help to reduce range anxiety for guests with EV vehicles and also play a role in lowering the overall carbon footprint of the country, as IHCL properties occupy prime locations in cities. In this rapidly transforming world, our sustainability goals will certainly evolve as our industry grows and as per the needs arising in the society.

B. Technology Absorption: There is no material information on technology absorption to be furnished. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations. IHCL has collaborated with IFC Tech Emerge towards piloting sustainable cooling technology. Nine projects have been rolled out across six hotels.

C. Foreign Exchange Earnings and Outgo:

â¢ Earnings: ''387.63 crores (Previous year ''149.92 crores)

â¢ Outgo: ''80.02 crores (Previous year ''44.46 crores)

25. Material Changes and Commitment Affecting the Financial Position of the Company

There are no material changes affecting the financial position of the Company subsequent to the close of FY 2022-23 till the date of this Report.

26. Significant and Material Orders Passed by the Regulators

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations. However, Members'' attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the financial statements.

27. Proceedings under Insolvency and Bankruptcy Code, 2016

During the year under review, there were no proceedings that were filed by the Company or against the Company, which are pending under the Insolvency and Bankruptcy Code, 2016, as amended, before National Company Law Tribunal or other Courts.

28. Valuation

During the year under review, there were no instances of one-time settlement with any Banks or Financial Institutions.

29. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act)

The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Company''s website at https://www.ihcltata.com/ POSH Policy.pdf

Status of complaints as on March 31, 2023:

Sr.	Particulars	Number of
No.	Particulars	Complaints
1.	Number of complaints filed during the Financial Year	16
2.	Number of complaints disposed during the Financial Year	15
3.	Number of complaints pending at the end of the Financial Year	1*
*Complaint was received only in March 2023 and appropriate steps

30. Integrated Report

With the corporate landscape rapidly evolving, Integrated Reporting has been an ideal tool to explore value creation. The Company being an iconic brand, has voluntarily provided Integrated Report, which encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Company''s long-term perspective.

The Company has progressed in the journey of Integrated Reporting and is focused on driving more authentic, comprehensive and meaningful information about all aspects of the Company''s performance and value creation story delivering benefits for both internal and external stakeholders.

The Report also touches upon aspects such as organisation''s strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

31. Acknowledgement

The Directors thank the Company''s customers, vendors, investors, lenders, partners and all other stakeholders for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

The Directors appreciate and value the contribution made by all our employees and their families and the contribution made by every other member of the IHCL family, for making the Company what it is.

On behalf of the Board of Directors

N. Chandrasekaran

Chairman (DIN: 00121863)

Mar 31, 2019

To the Members

The Directors have pleasure in presenting the 118th Annual Report on the performance of your Company together with its Audited Financial Statements for the Financial Year 2018-19:

FINANCIAL RESULTS

Rs. crores

	Standalone		Consolidated
Particulars \|	2018-19	2017-18	2018-19	2017-18
Total Income	2870.91	2639.34	4595.38	4165.28
Profit before Depreciation, Finance Costs, Tax and Exceptional items and share of equity accounted investees	819.94	684.19	913.11	732.08
Less: Finance Costs	158.64	193.43	190.13	269.04
Less: Depreciation	169.10	151.34	327.85	301.20
Profit before Tax & Exceptional Items and share of equity accounted investees	492.20	339.42	395.13	161.84
Add/(Less): Exceptional Items	(74.66)	(55.19)	6.58	22.45
Profit before Tax	417.54	284.23	401.71	184.29
Less: Provision for Tax	153.84	136.46	157.12	121.06
Profit after Tax, before Non- Controlling interest and share of equity accounted investees	263.70	147.77	244.59	63.23
Add: Share of Profit of Associates and Joint Ventures net of tax	NA	NA	51.53	40.29
Less: Non- Controlling Interest	NA	NA	9.30	2.65
Profits after Tax attributable to Owners of the Company	263.70	147.77	286.82	100.87
Retained earnings: Balance brought forward	411.84	268.71	(56.86)	(193.63)
Other Comprehensive Income attributable to Owners of the Company	(6.53)	(5.80)	(6.56)	(7.11)
Transfer from Reserve Fund	-	42.42	-	42.42
Realised gain on Equity Shares through Other Comprehensive Income	-	0.41	-	42.84
Adjustment on account of Joint Venture	NA	NA	(2.48)	-
Amount Available for Appropriation	669.01	453.51	220.92	(14.61)
Appropriations:
Dividend on equity shares (excluding tax)	47.57	34.62	47.57	34.62
Tax on dividends	5.74	7.05	7.42	7.63
Transfer to Debenture Redemption Reserve	11.93	-	11.93	-
Total Appropriations	65.24	41.67	66.92	42.25
Retained Earnings: Balance carried forward	603.77	411.84	154.00	(56.86)

FINANCIAL HIGHLIGHTS - STANDALONE

IHCLâs operational inventory stands at 149 hotels with 17,888 rooms. During Financial Year 2018-19, three Taj properties in Udaipur, Shimla and Uttarakhand and two Vivanta properties in Katra and Kathmandu were opened. Additionally, your Company re-opened the Taj Connemara, Chennai and successfully retained the iconic Taj Mahal Hotel, Mansingh Road, Delhi through a bidding process. Your Company also launched IHCLâs corporate brand identity, SeleQtions and Ama Trails & Stays brands. The Groupâs portfolio includes 46 hotels under the Ginger brand, which has an aggregate inventory of 4,021 rooms. Your Company continues to pursue expansion both in the domestic and international market, and unlocking value by monetizing its assets to achieve sustainable and profitable growth.

Income

The Total Income for the year ended March 31, 2019 at Rs. 2,870.91 crores represents a growth of 9% over Financial Year 2017-18. Within the overall revenue, Room Revenue increased by 6%, driven by improved average rate per room and occupancies. Food and Beverage Revenues increased by 11% over Financial Year 2017-18, aided by growth in restaurant sales and banqueting income. Other Operating Income, Management and Operating Fees also increased by 6% as compared to Financial Year 2017-18.

Dividend Income was higher by Rs. 19.02 crores supplemented by gain from investment in mutual funds of Rs. 11.32 crores and profit on disposal of non-core assets of Rs. 13.70 crores. However, interest income was lower than the Financial Year 2017-18 by Rs. 11.01 crores due to further deployment of temporary surplus from the rights issue proceeds.

Depreciation and Finance Costs

Depreciation at Rs. 169.10 crores was higher than Financial Year 2017-18 mainly due to depreciation on capitalisation arising from renovations at hotels and new hotel openings. Finance costs for the year ended March 31, 2019 at Rs. 158.64 crores was lower than Financial Year 2017-18 cost of Rs. 193.43 crores mainly due to repayment of debt out of rights issue proceeds.

Profit before Tax and Exceptional Items

Profit before Tax and Exceptional Items stood at Rs. 492.20 crores, which represents an increase of 45%, as compared to the Financial Year 2017-18 .

Exceptional Items

Exceptional Items include exchange loss on change in Fair value of Cross currency swap derivative contracts Rs. 41.03 crores and a provision for impairment due to losses in an overseas subsidiary of Rs. 31.71 crores. Corresponding figures for Financial Year 2017-18 were a gain of Rs. 25.51 crores and impairment of Rs. 80.50 crores.

Borrowings

The total borrowings stood at Rs. 1,784.05 crores as on March 31, 2019 as against Rs. 1,783.88 crores as on March 31, 2018.

Profit before and after tax

The Profit before Tax for the Financial Year 2018-19 was at Rs. 417.54 crores, as compared to Rs. 284.23 crores for Financial Year 2017-18. The Profit after Tax for the year under review was at Rs. 263.70 crores, as compared to Rs. 147.77 crores for Financial Year 2017-18 .

FINANCIAL HIGHLIGHTS - CONSOLIDATED

The consolidated income of your Company for the year ended March 31, 2019 aggregated Rs. 4,595.38 crores as against Rs. 4,165.28 crores for Financial Year 2017-18. Revenue from operations increased by 10% from Rs. 4,103.55 crores to Rs. 4,512.00 crores, primarily driven by improved business performance in the domestic as well as international portfolio.

Profit before Tax and Exceptional Items and share of profits of equity accounted investees stood at Rs. 395.13 crores as compared to Rs. 161.84 crores in Financial Year 2017-18.

Profit after Tax attributable to Owners of the Company aggregated to Rs. 286.82 crores for the year significantly improved when compared to previous yearâs figure of Rs. 100.87 crores. The improvement was on account of improved business, margins, and lower finance costs.

APPROPRIATIONS

Dividend

Board of Directors recommend a dividend at the rate of 50% i.e. Rs. 0.50 per share (Previous Year Rs. 0.40 per share). The dividend on Equity Shares, if approved by the Members would involve a cash payout of Rs. 71.69 crores, including dividend distribution tax of Rs. 12.22 crores.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), the Company has adopted the Dividend Distribution Policy which is attached as Annexure-I. Payment of Dividend is as per the said Policy.

Debentures

During Financial Year 2018-19, neither the Company raised any debt by way of Debentures, nor were any debentures redeemed.

Capital Expenditure

During Financial Year 2018-19, your Company incurred Rs. 246.88 crores towards capital expenditure, a majority of which was towards the Taj Exotica Resort & Spa, Andaman and Taj Connemara, Chennai projects, as well as renovations at certain hotels.

Fixed Deposits

Your Company does not accept and/or renew Fixed Deposits from the general public and shareholders. There were no over dues on account of principal or interest on public deposits other than the unclaimed deposits at the end of Financial Year 2018-19 which is Rs. 0.39 crore (Previous year Rs. 0.69 crore).

Loans, Guarantees or Investments

Your Company falls within the scope of the definition âinfrastructure companyâ as provided by the Companies Act, 2013 (âActâ). Accordingly, the Company is exempt from the provisions of Section 186 of the Act with regards to Loans, Guarantees and Investments.

Transfer to reserves

An amount of Rs. 11.93 crores has been transferred from Retained Earnings to Debenture Redemption Reserve in order to allocate sufficient funds towards future redemption of debentures. Further the Board has decided to retain the entire amount of profits for Financial Year 2018-19 in the profit and loss account.

CORPORATE SOCIAL RESPONSIBILITIES (âCSRâ)

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure II of this Report in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is also available on the website of your Company at https://www.ihcltata.com/investors/. For other details regarding the CSR Committee please refer to the Corporate Governance Report, which is a part of the Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEM AND ADEQUACY

According to Section 134(5)(e) of the Act, the term Internal Financial Control (âIFCâ) means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Companyâs internal control systems are commensurate with its size and the nature of its operations. The Company has a strong and independent in-house Internal Audit (âIAâ) department. The Audit Committee also deliberates with the members of the management, considers the systems as laid down and meets the internal auditors and statutory auditors to ascertain their views on the internal financial control systems. Further details are provided in the Management Discussion and Analysis Report which forms a part of the Annual Report.

VIGIL MECHANISM

Your Companyâs Vigil Mechanism provides a formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of Directors and Employees who avail of the mechanism and also have provided them direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The Company has revised the Whistle-Blower policy to insert âreporting of incidents of leak or suspected leak of Unpublished Price Sensitive Information (UPSI)â in terms of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time and the revised policy was approved by the Audit Committee and the Board. The said policy is available on the Companyâs website at https://www.ihcltata.com/investors/.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form No. MGT-9 as per Sections 92(3) and 134(3) of the Act read with the Rules framed thereunder are given as Annexure III, which forms part of this Report. The Annual Return for Financial Year 2017-18 is also available on the Companyâs website at www.ihcltata.com

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee, number of meetings etc. are included in the Corporate Governance Report, which forms part of the Annual Report.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (âRPTsâ) which inter alia provides for the parameters to grant omnibus approval(s) by the Audit Committee. The Policy is available on the Companyâs website at https://www.ihcltata.com/investors/.

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. A statement on RPTâs specifying the details of the transactions, pursuant to each omnibus approval granted, has been placed on a quarterly basis for review by the Audit Committee.

All contracts/arrangements/transactions entered by the Company during the year under review with related parties were on an armâs length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act.

Further, in Financial Year 2018-19, there were no material transactions of the Company with any of its related parties.

Accordingly, the Company has not provided Form No. AOC-2. RISK MANAGEMENT

The Risk Management Committee (âRMCâ) is entrusted with the responsibility to frame, implement and monitor the Risk Management plan and also ensure its effectiveness. The Company has a Risk Management Policy in accordance with the provisions of the Act and the Listing Regulations. The Audit Committee has an oversight in the area of financial risk and controls. Other details including details pertaining to various risks faced by your Company, and also development and implementation of risk management policy are provided in the Management Discussion and Analysis Report which forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Company announces its consolidated financial statements on a quarterly basis. As required under the Listing Regulations, consolidated financial statements of the Company and its Subsidiaries, prepared in accordance with the Accounting Standards, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated financial statements of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has 21 Subsidiaries, 8 Joint Ventures and 6 Associates as on March 31, 2019.

During Financial Year 2018-19, there has been no change in the Companyâs subsidiary / associates / joint ventures.

The Company has adopted a Policy for determining Material Subsidiaries in line with Regulation 16 of the SEBI Listing Regulations. The Policy, as approved by the Board, is uploaded on the Companyâs website which can be accessed at https://www.ihcltata.com/investors/.

Pursuant to the provisions of Section 129(3) of the Act and the Rules framed thereunder, a statement containing the salient features of the financial statements of the subsidiaries, is attached to the Financial Statements in Form No. AOC-1 which forms part of this Report.

Pursuant to the provisions of Section 136 of the Act, the Company will make available the said financial statements and related detailed information of the Subsidiary Companies upon the request by any Member of the Company or its Subsidiary. The Financial Statements of the Company and its subsidiaries will also be kept open for inspection by any Member at the Registered Office of the Company and the Subsidiary Companies on all working days (i.e. Monday to Friday) during the business hours and also at the venue of the AGM till the time the meeting is in process. The separate audited accounts in respect of subsidiaries are also available on the website of your Company at https://www.ihcltata.com/investors/.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (âKMPâ)

Appointments

The Company has on the recommendations of the Nomination and Remuneration Committee (âNRCâ) and in accordance with the provisions of the Act and the Listing Regulations, appointed Mr. Mehernosh Kapadia, who retired as an Executive Director of the Company on May 23, 2018 and Mr. Venu Srinivasan as Additional Directors of the Company with effect from August 10, 2018, subject to approval of the Members at the Annual General Meeting (âAGMâ). They shall hold office as Additional Directors upto the date of the forthcoming AGM. Pursuant to Section 152 and other applicable provisions of the Act, and the Articles of Association of your Company, one-third of the Directors (other than Independent Directors) as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every AGM. Consequently, Mr. Puneet Chhatwal retires by rotation and being eligible, offers himself for re-appointment in accordance with provisions of the Act.

The approval of the shareholders for their appointments/ re-appointment as Directors has been sought in the Notice convening the AGM of your Company. The disclosures pertaining to Directors being appointed/ re-appointed as required pursuant to Regulation 36 of the Listing Regulations, Clause 1.2.5 of the Secretarial Standards 2 are given in the explanatory statement to the Notice convening the AGM, forming part of the Annual Report.

Further during the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committee of the Company.

Independent Directors

In terms of Section 149 of the Act, and Regulation 16(1) of the Listing Regulations Mr. Deepak Parekh, Mr. Nadir Godrej, Ms. Ireena Vittal, Mr. Gautam Banerjee and Ms. Vibha Paul Rishi are the Independent Directors of the Company as on March 31, 2019. The Independent Directors have submitted a declaration that each of them meet the criteria for independence as laid down under Section 149(6) of the Act read with Rules framed thereunder and Regulation 16 of the Listing Regulations and that they are not aware of any circumstance or situation, which exists or is anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence as required under Regulation 25 of Listing Regulations.

Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 203 of the Act, the KMPâs of your Company for Financial Year 2018-19 were Mr. Puneet Chhatwal, Managing Director & CEO, Mr. Mehernosh Kapadia, Executive Director - Coporate Affairs (Retired as Non- Executive Director w.e.f. May 23, 2018) Mr. Giridhar Sanjeevi, Executive Vice President & CFO, and Mr. Beejal Desai, Senior Vice President - Legal & Company Secretary.

BOARD MEETINGS

During the year under review, five Board Meetings were held and the intervening gap between the meetings did not exceed the period of one hundred and twenty days, the details of which are given in the Corporate Governance Report.

BOARD EVALUATION

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provisions of the Act and the Listing Regulations.

At a separate meeting of Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated. The Independent Directors in the said meeting also evaluated the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Additionally, the Chairman of the Board was also evaluated after taking into account the views of Executive Directors and Non-Executive Directors in the aforesaid meeting.

The Board evaluated its performance after seeking inputs from all the directors on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. Further, the performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are in line with the Guidance Note on Board Evaluation issued by SEBI on January 5, 2017.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and Committee Meeting like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the Board meeting that followed the meeting of the Independent Directors and the meeting of NRC, performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR

The NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and the Listing Regulations as stated under:

Independence: A Director will be considered as an âIndependent Directorâ if he/she meets with the criteria for âIndependenceâ as laid down in the Act and the Rules frame thereunder Listing Regulations.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is ensured that the Board comprises a mix of members with different educational qualifications, knowledge, age, gender and who possesses adequate experiance in banking and finance, accounting and taxation, ecomonics, legal and regulatory matters, consumer industry, hospitality sector and other disciplines related to the Companyâs business.

Positive Attributes: Apart from the duties of Directors as prescribed under the Act, the Directors are expected to abide by the respective code of conduct as applicable to them.

POLICY ON REMUNERATION OF DIRECTORS

Your Company has adopted a Remuneration Policy for the Directors, KMP, Senior Management and other employees, pursuant to the provisions of the Act and the Listing Regulations.

The key principles governing your Companyâs Remuneration Policy and connected matter as provided in section 178(3) of the Act has been disclosed in the Corporate Governance Report which forms part of this Report.

It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of your Company. The Remuneration Policy for Directors, KMP and other Employees is uploaded on the website of your Company at https://www.ihcltata.com/investors/.

PARTICULARS OF EMPLOYEES

The disclosure pertaining to remuneration and other details as required to be furnished pursuant to Section 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure V to this Report.

The statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate Annexure forming part of the Report. In terms of proviso to Section 136(1) of the Act, the Report along with Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said Annexure is open for inspection at the Registered Office of the Company. Any member interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes affecting the financial position of the Company subsequent to the close of Financial Year 2018-19 till the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companyâs operations. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the Financial Statement.

STATUTORY AUDIT

At the 116th AGM of the Company held on August 21, 2017, B S R & Co LLP (âBSRâ), Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors of the Company by the Members for a term of five consecutive years effective from August 21, 2017. BSR has furnished a certificate of their eligibility and consent under Sections 139(1) and 141 of the Act and the Rules framed thereunder for their continuance as Statutory Auditors of the Company for Financial Year 2019-20.

The Report of the Statutory Auditors along with the Notes to Schedules forms part of the Annual Report and contains an Unmodified Opinion without any qualification, reservation, disclaimer or adverse remark.

The Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the Act.

COST AUDIT

The Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

SECRETARIAL AUDIT

Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/S Neville Daroga & Associates, Company Secretaries to undertake the Secretarial Audit of your Company for the Financial Year 2018-19. The Secretarial Audit Report is annexed herewith as Annexure IV. The Report does not contain any qualifications, reservation or adverse remarks or disclaimers.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

During Financial Year 2018-19, the Company has complied with the relevant provisions of Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy: The Company has a longstanding history of stewardship through efficient management of all its assets and resources. The Companyâs conscious efforts are aligned with the Tata ethos of keeping communities and environment at the heart of doing business. In line with IHCLâs commitment to safeguard the environment, we have been the flagbearers of responsible tourism through elimination of two million plastic straws accross all our properties. Our renewable energy proportion has taken a leap of 23% from 7% in the past three years. In this rapidly transforming world, our sustainability goals will certainly evolve as our industry grow and as per the needs arising in the society.

B. Technology Absorption: Nil

C. Foreign Exchange Earnings and Outgo:

- Earnings : Rs. 732.47 crores

- Outgo : Rs. 84.31 crores

DIRECTORSâ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by your Company, work performed by the Internal, Statutory and Secretarial Auditors including audit of internal financial controls over financial reporting by the Statutory Auditors and reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that your Companyâs internal financial controls were adequate and effective during Financial Year 2018-19.

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

(i) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent in order to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance within the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts for the Financial Year ended March 31, 2019 on a âgoing concernâ basis;

(v) they have laid down internal financial controls for the Company which are adequate and are operating effectively;

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

PREVENTION OF SEXUAL HARASSMENT

Your Company has zero tolerance for sexual harassment at its workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSH Actâ) and the Rules framed thereunder for prevention and redressal of complaints of sexual harassment at workplace.

An Internal Committee (IC) has been constituted in accordance with the provisions of the POSH Act to redress complaints received regarding sexual harassment and all the provisions regarding the constitution are complied with.

INTEGRATED REPORTING

IHCL has embarked on the journey of the Integrated Reporting framework prescribed by the International Integrated Reporting Council (âIIRCâ). This is the first year of our journey on Integrated Reporting. Through this Report, we aspire to provide to our stakeholders an all-inclusive depiction of the organisationâs value creation using both financial and non-financial resources. The Report strives to provide insights into our key strategies, operating environment, the operating risks and opportunities, governance structure and the Companyâs approach towards long-term sustainability.

ACKNOWLEDGEMENT

The Directors thank the Companyâs employees, customers, business partners, vendors, investors and lenders for their continuous support.

The Directors also thank the Government of India, Government of various states in India, Government of various countries and concerned Government departments and agencies for their co-operation.

The Directors appreciate and value the contribution made by every member of the IHCL family.

On behalf of the Board of Directors

N. Chandrasekaran

Chairman

Mumbai, April 30, 2019

Registered Office:

Mandlik House, Mandlik Road,

Mumbai 400 001.

CIN: L74999MH1902PLC000183

Tel.: 022 66395515 Fax: 022 22027442

Email: [email protected]

Website: www.ihcltata.com

Mar 31, 2018

To the Members

The Directors have pleasure in presenting the 117^th Annual Report of your Company together with its Audited Financial Statements for the financial year ended March 31, 2018:

Financial Results

Rs./crores

	Standalone		Consolidated
Particulars	2017-18	2016-17	2017-18	2016-17
Total Income	2639.34	2459.58	4165.28	4075.51
Profit before Depreciation, Finance Costs, Tax and Exceptional Items & share of equity accounted investees	684.19	577.70	732.08	664.56
Less: Depreciation	151.34	151.31	301.2	299.37
Less: Finance Costs	193.43	197.86	269.04	323.83
Profit before Tax, Exceptional Items and share of profit of equity accounted investees	339.42	228.53	161.84	41.36
Add/(Less): Exceptional Items	(55.19)	33.51	22.45	(10.78)
Profit before Tax	284.23	262.04	184.29	30.58
Less: Provision for Tax	136.46	118.86	121.06	113.74
Profit / (Loss) after Tax, before Non-Controlling interest & share of profit of equity accounted investees	147.77	143.18	63.23	(83.16)
Less: Non-Controlling Interest	-	-	2.65	(17.60)
Add: Share of Profit of Associates and joint ventures net of Tax	-	-	40.29	37.56
Profit / (Loss) after Tax attributable to Owners of the Company	147.77	143.18	100.87	(63.20)

External Environment

The Indian economy grew by 7.2% year on year in the quarter ending December 2017 on good showing by key sectors like agriculture, construction and manufacturing, as against 6.3% year on year in the previous quarter. The growth in GDP during FY 2017-18 is estimated at 6.5% as compared to the growth rate of 7.1% in FY 2016-17.

Indiaâs annual inflation rate rose to a 3 month high of 4.58% in April 2018 from 4.28% in the previous month. Inflation rate in India averaged 6.60% from 2012 until 2018, reaching an all-time high of 12.17% in November 2013 and a record low of 1.54% in June 2017 mainly due to demonetization.

Revival in rural demand and increased infrastructure spending is likely to drive Indiaâs growth in current year, even as increasing debt and trade protectionism could pose a challenge. After a year of disruptions and growth slowdown due to Goods and Services Tax & demonetisation, Indian economy is consolidating the gains from the recent reforms. There is high optimism in domestic demand in the form of consumption and revival in small scale business activities, resulting in an increase in Foreign Direct Investment flows into the country. With an eye on infrastructure development, the Government has given green light to Rs. 7 trillion infrastructure program in late 2017, with the aim to pave more than 80,000 km of road by March 2022. In addition, Government continues to encourage the expansion of Digital India.

Indian Hospitality Industry

The Indian hospitality industry has been instrumental in contributing to the nationâs economic growth. The introduction of e-visa for foreign tourists and the increased domestic travel have helped in contributing to the same.

International travel and tourism arrivals increased by a remarkable 7% to reach a total of 1,322 million in 2017 (January to December), 87 million more than the calendar year 2016. (Source: UNWTO).

For India, Foreign Tourist Arrivals during 2017 were 10.18 million with a growth of 15.6% over the same period of the previous year. During 2016 Foreign Tourist Arrivals were 8.8 million with a growth rate of 9.7% over 2015. (Source: Ministry of Tourism, Government of India)

The facility of e-visa has been enhanced and is now offered to citizens of 163 specified countries. In 2017, a total of 17 lakhs tourists availed the facility as compared to 10.79 lakhs in 2016, which represents a growth of 57%.

The growth in demand for rooms (5%) has been consistently outpacing the supply (3.2%) growth in India and this trend has been sustained over the recent past. This has resulted in an all India occupancy level of 65% across the industry. Except Chennai & Gurgaon, most key cities saw a healthy increase in demand. (Source: STR reports)

Financial Highlights-Standalone

The Taj Group opened one luxury hotel in Andaman. The inventory of the Taj Group of Hotels now stands at 145 hotels with 17,145 rooms. The Groupâs portfolio also includes 42 hotels under the Ginger brand, which has an aggregate inventory of 3,763 rooms. Your Company continues to pursue expansion both in the domestic and international market, in a capital light manner, to achieve sustainable and profitable growth.

Income

The Total Income for the year ended March 31, 2018 at Rs. 2,639.34 crores represents a growth of 7% over the previous year. Within the overall revenue, Room Revenue increased by 4%, driven by improved average rate per room (âARRâ) across the portfolio. The Food and Beverage Revenues increased by 8% over the previous year, aided by growth in restaurant sales and banqueting income. Other Operating Income, Management and Operating Fees, were also higher as compared to the previous year.

Dividend Income were lower as compared to the previous year, however Company earned interest income of Rs. 11.4 crores out of surplus funds from rights issue proceeds pending utilisation which was temporarily parked in fixed deposits with banks.

Depreciation and Finance Costs

Depreciation at Rs. 151.34 crores was at the same level as the previous year.

Finance costs for the year ended March 31, 2018 at Rs. 193.43 crores was lower than the previous yearâs figure of Rs. 197.86 crores mainly due to repayment of debt out of Rights Issue proceeds.

Profit before Tax and Exceptional Items

Profit before Tax and Exceptional Items stood at Rs. 339.42 crores, which represents an increase of 49%, as compared to the previous year.

Exceptional Items

Exceptional Items mainly include exchange gain on change in Fair value of cross currency swap derivative contracts Rs. 25.51 crores and provision for impairment due to losses in an overseas subsidiary Rs. 80.50 crores. Corresponding figures for the previous year were Rs. 65.45 crores and Rs. 64.33 crores respectively.

In the previous year, there was a one-time gain of Rs. 24.33 crores arising out of settlement claims and refund of Municipal Tax and interest of Rs. 6.16 crores previously paid under protest.

Borrowings

The total borrowings stood at Rs. 1,783.88 crores as at March 31, 2018 as against Rs. 2,048.98 crores as on March 31, 2017 representing a decrease of Rs. 265.10 crores due to repayment & refinancing of debt.

Profit / (Loss) before and after Tax

The Profit before Tax for the year was at Rs. 284.23 crores, as compared to Rs. 262.04 crores for the previous year. The Profit after Tax for the year was at Rs. 147.77 crores, as compared to Rs. 143.18 crores, for the previous year.

Financial Highlights - Consolidated

The consolidated income of your Company for the year ended March 31, 2018 aggregated Rs. 4,165.28 crores as against Rs. 4,075.51 crores for the previous year. The revenue from operations increased by 4% (on a same store basis, without considering the results of Taj Boston which was divested during the previous year) from Rs. 3,944.20 crores to Rs. 4,103.55 crores largely due to improvement in the performance of the domestic portfolio.

The Profit before Tax and Exceptional Items and share of profits of equity accounted investees stood at Rs. 161.84 crores as compared to Rs. 41.36 crores in the previous year.

Profit / (Loss) after Tax attributable to Owners of the Company aggregated to Rs. 100.87 crores for the year which has significantly improved when compared to previous year figure of Rs. (63.20) crores. Improvement was on account of reduced finance cost as also improvement operational performance. The Previous Years results were also impacted due to loss on sale of Taj Boston.

Appropriations

Dividend

On account of improved performance and Profit after Tax reported by your Company during the current year, the Board of Directors recommend a dividend at the rate of 40% i.e. Rs. 0.40 per share (Previous Year - Rs. 0.35 per share). The dividend on Equity Shares, if approved by the Members would involve a cash payout of Rs. 57.35 crores, including dividend distribution tax. Pursuant to Regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), the Company has adopted the Dividend Distribution Policy which is attached as Annexure-I.

Debentures

During the year under review, your Company redeemed 2,000, 2% Unsecured Non-convertible Redeemable Debentures of face value Rs. 10,00,000 each, aggregating to Rs. 200 Crores on April 23, 2017.

During the year under review, your Company raised 7.85% Unsecured Non-convertible Redeemable Debentures of face value Rs. 10,00,000 each aggregating to Rs. 200 crores.

Capital Expenditure

During the year under review, your Company incurred Rs. 311.33 crores towards capital expenditure, a majority of which was towards Taj Exotica Resort & Spa, Andamans and renovations and refurbishments of hotels. Other areas of investment included new Information Technology initiatives.

Fixed Deposits

The outstanding amount of Fixed Deposits placed with your Company was Nil (Previous Year - Nil) excluding Rs. 0.69 crore (Previous Year - Rs. 0.72 crore), which remained unclaimed by depositors as at March 31, 2018. Your Company does not accept and / or renew Fixed Deposits from the general public and shareholders.

Loans, Guarantees or Investments

Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013 (âActâ) with regard to Loans and Guarantees. Details of Investments made are given in the Notes to the Financial Statements.

Strategic Initiatives

Our strategic objective is to build a sustainable organization that remains committed to meet the expectations of our discerning customers, while generating profitable growth for our shareholders and all other stakeholders. In this regard, your Company has unveiled a slew of strategic initiatives, each of which is summarized in the Management Discussion and Analysis.

Amalgamation of TIFCO Holdings Limited (âTIFCOâ)

At a meeting held on May 26, 2017, the Board of Directors had approved the amalgamation of TIFCO, a wholly owned subsidiary of the Company with the Company, by way of a Scheme of Amalgamation between TIFCO and the Company (the âSchemeâ), as provided under Sections 230 to 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 or any other applicable law as amended from time to time. The appointed date for the Scheme was April 1, 2017. The Honâble National Company Law Tribunal, Mumbai Bench (NCL.T) vide its order dated March 8, 2018 approved the Scheme. Pursuant thereto, the NCLT order was filed with the Registrar of Companies, Maharashtra on April 11, 2018, being the âEffective Dateâ.

Pursuant thereto, in accordance with the terms of the Scheme, TIFCO was amalgamated with the Company w.e.f. the Appointed Date i.e. April 1, 2017, and consequently, TIFCO stands dissolved without winding up. The necessary accounting entries giving effect to the amalgamation were passed in the books of accounts of the Company.

Pursuant to the amalgamation, the Company has access to significant liquid assets of TIFCO in the form of cash, Mutual Fund investments and Inter-Corporate Deposits which can be put to better and more profitable use by the Company. The aggregate free reserves of the Company has increased by ~ Rs. 140 crores thereby enhancing the Companyâs ability to pay dividend to its shareholders.

Transfer within Reserves

Subsequent to the merger of TIFCO Holdings Ltd., the Company has transferred Rs. 42.42 crores from Reserve Fund to Retained Earnings during the year. TIFCO Holdings Ltd. was a Non-Banking Financial Company (NBFC) and has filed intimation with the statutory authorities for surrender of the NBFC license.

Management Agreement for Taj Boston Hotel

As part of the Agreement of Sale of Taj Boston during the previous year, the Group had entered into a hotel management services agreement (the âBoston Management Agreementâ) with Newbury Owner LLC.

On April 3, 2018, pursuant to Amendment to the Boston Management Agreement , the Group has received fees of about $ 6.91 million as an extraordinary income towards modification of certain contractual terms.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company and the initiatives undertaken by your Company on CSR activities during the year under review are set out in Annexure II of this report in the format prescribed under the Companies (CSR Policy) Rules, 2014. The CSR policy is available on the website of your Company.

Internal Control Systems and their adequacy

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

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

In addition, during the FY 2017-18, as required under Section 143 of the Act, the Statutory Auditors have evaluated and expressed an opinion on the Companyâs internal financial controls over financial reporting based on an audit. In their opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as on March 31, 2018.

Vigil Mechanism / Whistle Blower Policy

Your Company has adopted a Whistle Blower Policy to provide a formal mechanism for the Directors and employees to report genuine concerns about any unethical behavior, actual or suspected fraud or violation of your Companyâs Code of Conduct or ethics policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel has been denied access to the Chairman of the Audit Committee. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and Regulation 22 of the Listing Regulations. The Whistle Blower policy can be accessed on your Companyâs website at the link: https://www.taihotels.com/policies/whistle-blower-policv. pdf.

Extract Of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 as per Section 92(3) of the Act are given as Annexure III, which forms part of this Report.

Audit Committee

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which forms part of the Annual Report.

Related Party Transactions

In line with the requirements of the Act and the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (âRPTsâ) which can be accessed on the Companyâs website under the link: https://www.taihotels.com/policies/rpt-policv-post-amendment-act.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

Prior omnibus approval is obtained for RPTs which are of a repetitive nature and entered in the Ordinary Course of Business and are at Armâs Length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, has been placed on a quarterly basis for review by the Audit Committee.

All RPTs that were entered into during the financial year were in the Ordinary Course of Business and at Armâs Length. No Material RPTs, i.e. transactions exceeding the prescribed limits under Section 188 of the Act or the Listing Regulations were entered into during the year by your Company. Accordingly, the disclosure of RPTs in Form AOC-2 is not applicable.

Risk Management

Although not mandatory, your Company has constituted a Risk Management Committee as a measure of good governance. The Risk Management Committee is tasked with the responsibility to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The details of the Committee and its terms of reference are set out in the Corporate Governance Report.

Your Company has adopted a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, to identify and evaluate business risks and opportunities for mitigation of the same on a continual basis. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Companyâs competitive advantage. The Risk Management framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

Your Company is faced with risks of different types, each of which need varying approaches for mitigation. Details of various risks faced by your Company are provided in the Management Discussion and Analysis.

Subsidiaries, Joint Ventures and Associate Companies

Your Company announces its Consolidated Financial Statements as additional information along with the Standalone Financial Statements on a quarterly basis. The Annual Consolidated Financial Statements of your Company and its Subsidiaries, prepared in accordance with the relevant Accounting Standards, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the Subsidiaries, is attached to the Financial Statement in Form AOC-1. The Company will make available the said Financial Statements and related detailed information of the Subsidiary Companies upon the request by any Member of the Company or its Subsidiary. The Financial Statements will also be kept open for inspection by any Member at the Registered Office of the Company and the Subsidiary Companies.

Pursuant to the provisions of Section 136 of the Act, the Financial Statements of your Company, Consolidated Financial Statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of your Company.

Your Company has 21 Subsidiaries, 8 Joint Ventures and 6 Associates as on March 31, 2018.

TIFCO Holdings Limited ceased to be a subsidiary of the Company pursuant to its amalgamation with the Company i.e. w.e.f from April 11,2018. The appointed date for the Scheme of Amalgamation was April 1, 2017.

Apex Hotel Management Services Pte Limited ceased to be a subsidiary of the Company w.e.f. August 7, 2017, Chieftain Corporation Limited was liquidated on April 13, 2017 and Samsara Properties Limited was dissolved on June 6, 2017.

The policy for determining material subsidiaries can be accessed on your Companyâs website under the link https://www.taihotels.com/policies/policv-for-determinine-material-subsdiaries.docx

Rights Issue

The Company, vide its Letter of Offer dated September 25,2017, had offered up to 20,00,00,000 Equity Shares of face value of Rs. 1 each of the Company for cash at a price of Rs. 75 per Equity Share (including a premium of Rs. 74 per Equity Share), for an amount not exceeding Rs. 1,500 crores, on Rights basis, in the ratio of 1 Equity Share for every 5 fully paid-up Equity Shares held by the eligible equity shareholders as on the record date. The issue had opened on October 13, 2017 and closed on October 27, 2017. Consequently, on November 7, 2017, the Company allotted 19,99,84,430 Equity Shares of Rs. 75 each aggregating Rs. 14,99,88,32,250.

Directors And Key Managerial Personnel (âKMPâ) Appointments

During the year under review, the Board has on the recommendation of the Nomination and Remuneration Committee (âNRCâ) appointed Mr. Puneet Chhatwal as the Managing Director and Chief Executive Officer (âMD & CEO¹) of the Company w.e.f November 6, 2017 for a period of five years from the date of his appointment. Since Mr. Chhatwal was not a resident of India at the time of his appointment, the Company has made an application to the Central Government pursuant to the provisions of Section 196 read together with Schedule V of the Act and the approval is awaited.

In accordance with the Act and the Articles of Association of your Company, Mr. N. Chandrasekaran retires by rotation and being eligible, offers himself for re-appointment.

The approval of the shareholders for their appointment / re-appointment as Directors has been sought in the Notice convening the AGM of your Company.

Retirement / Resignations

Mr. Rakesh Sarna had expressed his desire to step down as the MD & CEO of the Company upon completion of his three year tenure due to personal reasons vide letter dated May 26, 2017.

The Board accepted the resignation of Mr. Sarna appreciating the contribution made by him to the Company in its transformation to operational excellence.

Mr. Sarna stepped down as the MD & CEO of the Company w.e.f the close of business hours on September 30, 2017.

During the year under review, the following Directors also stepped down from the Board of the Company as under:

- Mr. K. B. Dadiseth w.e.f. April 7, 2017

- Mr. Shapoor Mistry w.e.f. April 25, 2017

Mr. Mehernosh Kapadia retired as the Executive Director -Corporate Affairs on May 23, 2018 upon him reaching the age of retirement for Executive Directors in accordance with the Governance Guidelines adopted by the Company. During his tenure, Mr. Kapadia, a visionary and an outstanding leader steered the Company with great distinction and provided guidance and direction to the Company, in its quest to become a leading iconic hospitality Company in India as also overseas.

The Board places on record its appreciation of the services rendered by these Directors during their respective tenures.

Independent Directors

The Independent Directors have submitted a declaration that each of them meet the criteria for independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an Independent Director during the year under review.

KMP

Pursuant to the provisions of Section 203 of the Act, the KMPs of your Company as at March 31, 2018 are Mr. Puneet Chhatwal, MD & CEO, Mr. Mehernosh S. Kapadia, Executive Director - Corporate Affairs, Mr. Giridhar Sanjeevi, Executive Vice President & CFO and Mr. Beejal Desai, Senior Vice President - Legal & Company Secretary.

Board Meetings

During the year under review, six Board Meetings were held and the intervening gap between the meetings did not exceed the period prescribed under the Act, the details of which are given in the Corporate Governance Report.

Board Effectiveness

Your Company has adopted the Tata Governance Guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directorâs term, retirement age and Committees of the Board. They also cover aspects relating to nomination, appointment, induction and development of Directors, Directorâs remuneration, subsidiary oversight, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.

A. Board Evaluation

The evaluation of the individual Directors, Board and Committee effectiveness was conducted in accordance with the provisions of the Act, the Listing Regulations and the Tata Governance Guidelines on Board Effectiveness Review with the N RC having oversight of the whole process.

Board / Committee evaluation and Self-Assessment questionnaires having qualitative parameters and feedback based on rating after taking into consideration the guidance note issued by the Securities and Exchange Board of India on January 5, 2017 were circulated to the Directors for their comments.

Performance of the Board and Board Committees were evaluated on various parameters such as Board composition & structure, frequency, flow and functioning of meetings, quality, diversity, experience, competencies, performance of specific duties and obligations, quality of decision making and effectiveness of Board processes.

Performance of individual Directors was evaluated on parameters, such as attendance at Meetings, participation and constructive contribution in Meetings, preparedness on the issues to be discussed, integrity and independent judgement, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

The NRC Chairman and the Board Chairman conducted detailed discussions with every Board member with specific focus on their individual performance and effective functioning of the Board. The conclusions of the discussion were discussed by the NRC Chairman and the Board Chairman and based on the feedback gathered, the NRC carried out the evaluation of every Directorâs performance.

The feedback and suggestions received from all Directors were discussed at the NRC Meeting for positive reinforcement implementation. Following the discussions, the inputs translated into an action plan followed up by the Board periodically. Areas that needed improvement and more focus at Board and Committee Meetings were noted.

The Board had received consistent ratings on its overall effectiveness and had been rated comparatively higher this year for composition of Directors and their skills, attributes and experience, Board Meeting practices, governance and compliance, Secretarial Support, Corporate culture and values amongst others.

At a separate Meeting of Independent Directors, performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of the Executive Directors and Non-Executive Directors.

A comprehensive brief of the aforesaid Meetings was subsequently shared at the next Board Meeting at which the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

Following the Board discussion, feedback on the Committee reports were discussed with each of the relevant Committee Chairs. The Committees were highly regarded in the feedback and viewed as effective in fulfilling their remits and individual feedback, as appropriate, was provided to the Directors by the Board Chairman.

B. Appointment of Directors and criteria for determining qualifications, positive attributes & independence of a Director

The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of your Company. The NRC reviews and meets potential candidates, prior to recommending their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Independence: A Director will be considered as an âIndependent Directorâ if he / she meets with the criteria for âIndependenceâ as laid down in the Act, Regulation 16 of the Listing Regulations and the Tata Governance Guidelines.

Competency: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is ensured that the Board comprises a mix of members with different educational qualifications, knowledge and who possess adequate experience in banking and finance, accounting and taxation, economics, legal and regulatory matters, consumer industry, hospitality sector and other disciplines related to the Companyâs businesses.

Additional Positive Attributes:

- The Directors should not have any other pecuniary relationship with the Company, its Subsidiaries, Associates or Joint Ventures and the Companyâs Promoters, except as provided under law.

- The Directors should maintain an Armâs Length Relationship between themselves and the employees of the Company, as also with the directors and employees of its Subsidiaries, Associates, Joint Ventures, Promoters and stakeholders for whom the relationship with these entities is material.

- The Directors should not be the subject of proved allegations of illegal or unethical behavior, in their private or professional lives.

- The Directors should have the ability to devote sufficient time to the affairs of the Company.

C. Remuneration Policy

Your Company has adopted a Remuneration Policy for the Directors, KMPs and other employees, pursuant to the provisions of the Act and the Listing Regulations. The NRC is responsible for recommending the Remuneration Policy to the Board. The Board is responsible for approving and overseeing implementation of the Remuneration Policy.

The key principles governing your Companyâs Remuneration Policy are as follows:

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

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

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

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

- Quantum of sitting fees may be subject to review on a periodic basis, as required.

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

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

- In addition to the sitting fees and commission, your Company may pay to any Director such fair and reasonable expenditure, as may have been incurred by the Director while performing his / her role as a Director of the Company. This could include reasonable expenditure incurred by the Director for attending Board / Committee Meetings, General Meetings, Court Convened Meetings, Meetings with Shareholders/ Creditors/Management, site visits, induction and training (organized by the Company for Directors) and in obtaining professional advice from independent advisors in furtherance of his/her duties as a Director.

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

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

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

- In addition to the basic/fixed salary, benefits, perquisites and allowances as provided above, your Company provides MD/ EDs such remuneration by way of commission, calculated with reference to the net profits of your Company for the relevant financial year, as may be determined by the Board, subject to the overall limits stipulated in Section 197 of the Act. The specific amount payable to the MD/EDs would be based on performance as evaluated by the NRC and approved by the Board. Your Company may also provide to MD/EDs such remuneration by way of an annual incentive remuneration / performance linked bonus subject to the achievement of certain performance criteria and such other parameters as may be considered appropriate from time to time by the Board. An indicative list of factors may be considered for determination of the extent of this component such as Company performance on certain defined qualitative and quantitative parameters as may be decided by the Board from time to time, industry benchmarks of remuneration and performance of the individual.

- Your Company provides the rest of the employees a performance linked bonus. The performance linked bonus is driven by the outcome of the performance appraisal process and the performance of your Company and the individualâs contribution.

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

Material Changes and Commitment affecting the Financial Position of the Company

There are no material changes affecting the financial position of the Company subsequent to the close of the FY2018 till the date of this report.

Significant and material orders passed by the Regulators

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companyâs operations.

Statutory Auditors

B S R & Co LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors of the Company by the Members for a term of five consecutive years, from the conclusion of 116^th AGM till the conclusion of the 121^st AGM of the Company (subject to ratification of their appointment at every AGM, if required under the Act).

However, pursuant to the Companies Amendment Act, 2017 which was notified on May 7, 2018, the provision related to ratification of appointment of auditors by Members at every AGM has been done away with.

The report of the Statutory Auditors along with the Notes to Schedules forms part of the Annual Report and contains an Unmodified Opinion without any qualification, reservation or adverse remark.

Compliance with Secretarial Standards on Board Meetings and General Meetings

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

Secretarial Audit

Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed BNP & Associates, Company Secretaries (Firm Registration No. P2014MH037400) to undertake the Secretarial Audit of your Company for the financial year 2017-18. The Secretarial Audit Report is annexed herewith as Annexure IV. The report does not contain any qualifications, reservation or adverse remarks.

Conservation of Energy and Technology Absorption

The details of conservation of energy are given in the Management Discussion and Analysis Report.

Particulars of Employees

The disclosure pertaining to remuneration and other details as required to be furnished pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure V to this Report.

The statement containing particulars of top ten employees and the employees drawing remuneration in excess of limits prescribed under Section 197(12) of the Act read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate Annexure forming part of the Report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said statement is also open for inspection at the Registered Office of the Company. Any member interested in obtaining a copy of the same may write to the Company Secretary.

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

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

During the year under review, your Company has received 15 complaints on sexual harassment. All the complaints have been resolved and appropriate action taken, where so necessary, and no cases remain pending.

Directorsâ Responsibility Statement

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

(i) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable Accounting

Standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent in order to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

(iv) they have prepared the annual accounts for the financial year ended March 31, 2018 on a âgoing concernâ basis;

(v) they have laid down internal financial controls for the Company which are adequate and are operating effectively;

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

Corporate Governance

As required by the Listing Regulations, the Report on Management Discussion and Analysis, Business Responsibility and Corporate Governance along with the Practising Company Secretaryâs Certificate regarding compliance of conditions of Corporate Governance norms as stipulated in Regulation 34 read along with Schedule V of the Listing Regulations forms part of the Annual Report.

Acknowledgement

The Directors express their deep sense of appreciation for the contributions made by the employees to the significant improvement in the operations of the Company.

The Directors also than kail the stakeholders including Members, customers, lenders, vendors, investors, business partners, and the Government of India for their continued co-operation and support and their confidence in its management.

On behalf of the Board of Directors

N. Chandrasekaran

Chairman

Mumbai, May 25, 2018

Registered Office:

Mandlik House, Mandlik Road, Mumbai 400 001.

CIN: L74999MH1902PLC000183

Tel.: 022 66395515 Fax: 022 22027442

Email: investorrelations(5)taihotels.com

Website: www.taihotels.com

Mar 31, 2017

TO THE MEMBERS

The Directors have pleasure in presenting the 116th Annual Report of your Company together with its Audited Financial Statements for the financial year ended March 31, 2017.

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

FINANCIAL RESULTS

	Standalone		Consolidated
Particulars	2016/17	2015/16	2016/17	2015/16
	Rs. crores	Rs. crores	Rs. crores	Rs. crores
Total Income	2445.11	2374.12	4065.20	4122.78
Profit before Depreciation, Finance Costs, Tax and Exceptional items	574.49	528.58	664.56	651.92
Less: Depreciation	151.29	126.02	299.37	284.82
Less: Finance Costs	197.86	242.78	323.83	375.59
Profit before Tax & Exceptional Item	225.34	159.78	41.36	(8.49)
Add/(Less): Exceptional Items	33.51	(6.89)	(10.78)	(82.68)
Profit / (Loss) before Tax	258.85	152.89	30.58	(91.17)
Less: Provision for Tax	116.91	68.74	113.74	90.63
Profit / (Loss) after Tax, Non - controlling interest & share of Associates and Joint Ventures	141.94	84.15	(83.16)	(181.80)
Less: Non - controlling Interest	-	-	(17.60)	(27.87)
Add: Share of Profit / (Loss) of Associates and Joint Ventures	-	-	37.56	(21.41)
Profits / (Loss) after Tax	141.94	84.15	(63.20)	(231.08)

EXTERNAL ENVIRONMENT

The Indian economy grew by 7.0% year on year in the quarter ending December 2016, slightly lower than the 7.4% year on year in the previous quarter. The growth in GDP during 2016/17 is estimated at 7.1% as compared to the growth rate of 7.9% in 2015/16.

Consumer Inflation has moderated from 5.47% in April 2016 to 2.99% in April 2017. The decrease in inflation over the recent past is attributed to the demonetization drive which commenced in November 2016. The cash crunch, combined with a decrease in demand, led to the fall in inflation. It is expected that sectors that depend mostly on cash will see some disruption in the short term. Although increased activity in the rural economy coupled with pay revisions across public sector enterprises was expected to have a favourable impact on consumption, these positives were more than offset by the demonetization drive.

Looking ahead, the growth of some sectors such as Information Technology / Information Technology Enabled Services may be constrained with several key macroeconomic events in FY16-17 such as Brexit, continued increase in interest rates by the US Federal Reserve and protectionist policies in the USA. However, Indiaâs increased focus on digitalization and the âSmart Citiesâ and âMake in Indiaâ initiatives is expected to create opportunities which may counter any slowdown globally.

INDIAN HOSPITALITY INDUSTRY

International travel and tourism arrivals increased by 3.9% to reach a total of 1,235 million in 2016 (January to December), 46 million more than for the calender year 2015 in the same period. (Source: UNWTO) For India, during the period January - December 2016, foreign touristsâ arrivals were 88.90 lakh an increase of 10.7% as compared to 80.27 lakh in the calendar year 2015. (Source: Ministry of Tourism, Government of India)

The facility of e-visa has been enhanced and is now available at 16 international airports to tourists arriving from 161 specified countries. In 2016, a total of 10.79 lakh tourists availed the facility as compared to 4.45 lakh in 2015 which represents, a growth of 142.5%.

The growth in demand for rooms (6.2%) has been consistently outpacing the supply (3.1%) growth in India and this trends has been sustained over the recent past. This has resulted in occupancies to be sustained at over 60% across the industry. All key markets have registered growth in room demand and no key markets were lagging compared to the previous year (Source: STR reports)

FINANCIAL HIGHLIGHTS - STANDALONE

The Taj Group opened one Luxury hotel in Amritsar and one Gateway hotel at Corbett. The inventory of the Taj Group of Hotels now stands at 134 hotels with 16,675 rooms. The Groupâs portfolio also include 35 hotels under the Ginger Brand, which has an aggregate inventory of 3,324 rooms. Your Company continues to pursue expansion both in the domestic and international market, in a capital light manner, to achieve sustainable and profitable growth.

Income

The Total Income for the year ended March 31, 2017 at Rs.2,445.11 crores represents a growth of 3% over the previous year. Within the overall revenue, Room Revenue increased by 8%, driven by improved Average Rate Per Room (âARRâ), occupancies and incremental impact of full year operations of Taj Guwahati, which commenced operations in April 2016. The Food and Beverage Revenues increased marginally over the previous year, aided by growth in restaurant sales and banqueting income. Other Operating Income, Management and Operating Fees, were also higher, compared to the previous year.

Dividend and Interest Income were however lower as compared to the previous year, as the Company had used surplus cash to redeem Non-Convertible Debentures of Rs.521 crores (including premium on redemption) in the latter half of 2015/16, which impacted the treasury income during the current year.

Depreciation and Finance Costs

Depreciation for the year was higher at Rs.151.29 crores as compared to Rs.126.02 crores for the previous year due to additions to fixed assets on account of planned renovations carried out in Mumbai and Goa Hotels and the impact of full year of operations of Taj Guwahati.

Finance costs for the year ended March 31, 2017 at Rs.197.86 crores were lower than the previous year by Rs.44.92 crores mainly due to retirement of high cost debt.

Profit Before Tax and Exceptional items

Profit before Tax and Exceptional Items stood at Rs.225.34 crores, which represents an increase of 41%, as compared to the previous year.

Exceptional Items

Exceptional Items include foreign exchange gain of Rs.1.90 crores on long term borrowings/ assets , exchange gain on change in Fair value of Cross currency swap derivative contracts Rs.65.45 crores and provision for impairment due to losses in an overseas subsidiary Rs.64.33 crores.

Exceptional Items also include Recovery of costs on a surrendered project, interest awarded by Arbitrator against claim raised on Karnataka Forest Development Corporation Rs.24.33 crores and Refund of Municipal Tax and interest of Rs.6.16 crores previously paid under protest.

In the previous year, there was a net exchange gain of Rs.3.29 crores and your Company had written off expenditure incurred on a project of Rs.9.83 crores.

Borrowings

The total borrowings stood at Rs.2,048.98 crores as at March 31, 2017 as against Rs.2,157.65 crores as on March 31, 2016, representing a decrease of Rs.108.67 crores due to repayment & refinancing of debt.

Profit / (Loss) before and after tax

The Profit before Tax for the year was at Rs.258.85 crores, as compared to Rs.152.89 crores for the previous year. The Profit after Tax for the year was at Rs.141.94 crores, as compared to Rs.84.15 crores, for the previous year.

FINANCIAL HIGHLIGHTS - CONSOLIDATED

The consolidated income of your Company for the year ended March 31, 2017 aggregated Rs.4,065.20 crores as against Rs.4,122.78 crores for the previous year. The revenue from operations increased by 4% (on a same store basis, without considering the results of Taj Boston which was divested during the year) from Rs.3,800.29 crores to Rs.3,933.89 crores largely due to improvement in the performance of the domestic portfolio.

The Profit before Tax and Exceptional Items stood at Rs.41.36 crores as compared to loss of â (8.49) crores in the previous year. The Loss after Tax, Minority interest and share of associates/ joint ventures aggregating to â (63.20) crores for the year has significantly reduced when compared to previous year of â (231.08) crores.

The consolidated results for the current Financial Year are after considering the sale of Taj Boston, and may therefore impact the comparison with the previous year.

APPROPRIATIONS

Dividend

On account of improved performance and Profit After Tax reported by your Company during the current year, the Board of Directors recommend a dividend at Rs.0.35 per share (previous year Rs.0.30 per share). The dividend on Equity Shares, if approved by the Members, would involve a cash payout of Rs.41.67 crores, including dividend tax. Pursuant to Regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), the Company has adopted the Dividend Distribution Policy which is attached as Annexure-I.

Debentures

During the year, your Company redeemed the following Debentures:

1. 1,360, 9.90% Unsecured Non-convertible Redeemable Debentures of face value Rs.10,00,000 each aggregating to Rs.136 crores were redeemed on February 24, 2017.

2. 2% Secured Non-Convertible Debentures of the face value of Rs.5,00,000 each aggregating to Rs.150 crores, along with redemption premium of Rs.3.51 lakhs per debenture were redeemed on March 22, 2017.

During the year, your Company had raised 7.85% Secured Non-convertible Redeemable Debentures of face value Rs.10,00,000 each aggregating to Rs.495 crores.

Capital Expenditure

During the year under review, your Company incurred Rs.255.24 crores towards capital expenditure, a majority of which was towards the upcoming hotel at Andamans and to commission balance floors of Taj Guwahati project. Other areas of investment included new Information Technology initiatives, renovations and refurbishments of hotels.

Fixed Deposits

The outstanding amount of Fixed Deposits placed with your Company was Nil (Previous year Nil) excluding Rs.0.72 crore (Previous year Rs.0.81 crore), which remained unclaimed by depositors as at March 31, 2017. Your Company does not accept and / or renew Fixed Deposits from the general public and shareholders.

Loans, Guarantees or Investments

Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013 (âActâ) with regard to Loans and Guarantees. Details of Investments made are given in the notes to the Financial Statements.

STRATEGIC INITIATIVES

Amalgamation of International Hotel Management Services, LLC (âIHMSâ)

As part of the Companyâs restructuring plan, at a meeting held on October 19, 2015, the Board of Directors had approved the amalgamation of IHMS (formerly known as International Hotel Management Services Inc.), a wholly held subsidiary into the Company, by way of a Scheme of Arrangement amongst the Company, the Transferor Company, and the respective shareholders and creditors (the âSchemeâ), as provided under Sections 391 to 394 of the Companies Act, 1956 read with Section 52 of the Act, Section 78 and Sections 100 to 103 of the Companies Act, 1956. The Appointed Date for the Scheme was January 1, 2016. The amalgamation was approved by the Members at the meeting convened on May 4, 2016, on the direction of the Honourable High Court of Judicature at Bombay (âBombay High Courtâ) where the application seeking permission for the amalgamation was filed. The Bombay High Court vide its order dated August 12, 2016 had approved the Scheme which had been filed with the jurisdictional Registrar of Companies on September 15, 2016.

The other conditions to effectiveness of the Scheme as specified in Clause 18(a) of the Scheme had subsequently been fulfilled including the receipt of the approval of the Securities and Exchange Board of India (âSEBIâ) in terms of the SEBI Scheme Circulars and the filing of the âCertificate of Mergerâ with the office of the Secretary of State of the State of Delaware, both on September 29, 2016. Accordingly, the âEffective Dateâ of the Scheme is September 29, 2016, being the last of the dates on which all the conditions and matters referred to in Clause 18(a) of the Scheme have been fulfilled in accordance with the Scheme.

Pursuant thereto, in accordance with the terms of the Scheme, IHMS has amalgamated with the Company and has ceased to exist as a separate legal entity as per the applicable law in the State of Delaware and is deemed to be dissolved without winding up for the purposes of the Companies Act with effect from the Appointed Date i.e. January 1, 2016. The necessary accounting entries have been passed in the books of accounts of the Company to reflect the same.

Amalgamation of Lands End Properties Private Limited (âLEPPLâ)

At a meeting held on October 19, 2015, the Board of Directors of the Company had approved the amalgamation of LEPPL, a wholly held subsidiary into the Company, by way of a Scheme of Arrangement amongst the Company, the Transferor Company, and the respective shareholders and creditors (the âSchemeâ), as provided under Sections 391 to 394 of the Companies Act, 1956 read with Section 52 of the Act, section 78 and Sections 100 to 103 of the Companies Act, 1956. The Appointed Date for the Scheme is March 31, 2016. The amalgamation was approved by the Members of the Company at the meeting convened on May 4, 2016, on the direction of the Honourable High Court of Judicature at Bombay (âBombay High Courtâ) where the application seeking permission for the amalgamation has been filed. The Bombay High Court vide its order dated October 13, 2016 has approved the scheme of arrangement between LEPPL and the Company. Pursuant thereto, the High Court orders were filed with the jurisdictional Registrar of Companies on December 7, 2016 for reduction of capital of the Company and on December 9, 2016 in respect of the Scheme.

The other conditions to effectiveness of the Scheme as specified in Clause 18(a) of the Scheme were subsequently fulfilled including receipt of approval/comments from the SEBI on December 19, 2016 vide SEBI Letter dated December 15, 2016, in terms of SEBI Circular No. CIR/CFD/DIL/5/2013 dated February 4, 2013 read with SEBI Circular No. CIR/CFD/DIL/8/2013 dated May 21, 2013. Accordingly, the âEffective Dateâ of the Scheme is December 19, 2016, being the last of the dates on which all the conditions and matters referred to in Clause 18(a) of the Scheme occur or have been fulfilled or waived in accordance with the Scheme.

Pursuant thereto, in accordance with the terms of the Scheme, LEPPL was amalgamated with the Company with effect from the Appointed Date i.e. March 31, 2016, and consequently, LEPPL stands dissolved without winding up. The necessary accounting entries giving effect to the amalgamation have been passed in the books of accounts of the Company.

Divestment of IHMS (Boston) LLC - Taj Boston Hotel

The Board of Directors of the Company had, at its meeting held on May 18, 2016, accorded its approval to United Overseas Holding Inc. (MUOHM), an indirect wholly owned subsidiary (âWOSâ) of the Company incorporated in the United States of America, to pursue the option of divestment of the Taj Boston Hotel by way of sale/ disposal of its entire issued and outstanding LLC interests in IHMS (Boston) LLC (a direct WOS of UOH), at a consideration not being lower than US$ 125 million (US$ One hundred and twenty five million only), to an independent third party, subject to negotiations and execution of suitable agreements and receipt of approval from its Members.

The Company had subsequently, obtained the Members approval for the same by a Special Resolution vide Postal Ballot. Accordingly, UOH effected on July 12, 2016, the divestment of the Hotel through sale of the entire issued and outstanding LLC interests of IHMS (Boston) LLC held by UOH, to âAS Holdings LLC, Bostonâ, for an aggregate consideration of US$ 125 million (US$ One hundred and twenty five million only).

Pursuant to the sale by UOH of its entire LLC interest in IHMS (Boston) LLC, the owning company of the Hotel, the Hotel continues to be operated and managed by IHMS (USA) LLC, an indirect wholly held subsidiary of the Company. IHMS (USA) LLC has entered into a Management Services Agreement with the new owning company, thus ensuring continuity of Tajâs presence in the Boston market.

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (âCSRâ) Policy of your Company and the initiatives undertaken by your Company on CSR activities during the year are set out in Annexure II of this report in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is available on the website of your Company.

INTERNAL CONTROL systems AND THEIR adequacy

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

In addition, during the year 2016/17, as required under Section 143 of the Act, the Statutory Auditors have evaluated and expressed an opinion on the Companyâs internal financial controls over financial reporting based on an audit. In their opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behaviour, actual or suspected fraud or violation of your Companyâs Code of Conduct. No person has been denied access to the Chairman of the Audit Committee. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and Regulation 22 of the Listing Regulations. The Whistle Blower Policy can be accessed on your Companyâs website at the link: https://www.taihotels.com/content/dam/thrp/investors/WHISTLE-BLOWER-POLICY-AND-VIGIL-MECHANISM.pdf.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 as per Section 92 (3) of the Act are given as Annexure III, which forms part of this Report.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which forms part of the Annual Report.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (âRPTsâ) which can be accessed on the Companyâs website under the link: https://www.taihotels.com/content/dam/thrp/investors/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

Prior omnibus approval is obtained for RPTs which are of a repetitive nature and entered in the Ordinary Course of Business and are at Armâs Length. All RPTs are placed before the Audit Committee for review on a quarterly basis.

All RPTs that were entered into during the Financial Year were in the Ordinary Course of Business and at Armâs Length. The Company has nothing to report in Form AOC-2, hence the same is not annexed.

RISK MANAGEMENT

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Consolidated Financial Statements of your Company and its Subsidiaries, Joint Ventures and Associates, prepared in accordance with the relevant Accounting Standards, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.

Your Company has 25 Subsidiaries, 8 Joint Ventures and 6 Associates as at March 31, 2017. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the Financial Statements of your Companyâs Subsidiaries, Associates and Joint Ventures in Form AOC-1 is attached to the Financial Statements of your Company.

During the year under review, LEPPL and IHMS ceased to be subsidiaries of the Company pursuant to their amalgamation with the Company, i.e. w.e.f from December 19, 2016 and September 29, 2016, respectively. The appointed dates for the Scheme of Arrangement to be effective were opening of the business hours of January 1, 2016 for IHMS and close of the business hours of March 31, 2016 for LEPPL.

Apex Hotel Management Services (Australia) Pty Ltd ceased to be a subsidiary of the Company w.e.f. March 31, 2017.

The policy for determining material subsidiaries can be accessed on your Companyâs website under the link https://www.taihotels.com/content/dam/thrp/investors/POLICY-FOR-DETERMINING-MATERIAL-SuBSIDIARIES.pdf.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Appointments

During the year, Mr. N. Chandrasekaran was appointed as an Additional Director of the Company w.e.f. January 27, 2017 and as Chairman of the Company w.e.f. February 22, 2017. He holds office upto the date of the forthcoming Annual General Meeting (âAGMâ) of the Company.

In accordance with the Act and the Articles of Association of your Company, Mr. Mehernosh S. Kapadia retires by rotation and being eligible, offers himself for re-appointment.

The approval of the shareholders for their appointment / re-appointment as Directors has been sought in the Notice convening the AGM of your Company.

Retirement / Resignations

Mr. Anil P. Goel sought premature retirement from the services of the Company and stepped down as the Executive Director and Chief Financial Officer (âCFOâ) w.e.f. October 15, 2016. Mr. Goel served the Company for more than 15 years overseeing the Taj Groupâs Finance, Mergers and Acquisitions, Purchases and Information Technology functions and brought in a unique understanding of fiscal responsibility to the Taj Group.

The following Directors also stepped down from the Board of the Company:

- Dr. N. S. Rajan w.e.f. October 28, 2016

- Mr. Cyrus P. Mistry w.e.f. December 19, 2016

- Mr. K. B. Dadiseth w.e.f. April 7, 2017.

- Mr. Shapoor Mistry w.e.f. April 25, 2017

The Board places on record its appreciation of the services rendered by these Directors to the Company during their respective tenures.

Mr. Rakesh Sarna had expressed his desire to step down as the Managing Director & Chief Executive Officer (âMD & CEOâ) of the Company upon completion of his three year tenure due to personal reasons vide his letter dated May 26, 2017.

The Board accepted the resignation of Mr. Sarna and requested him to continue as the MD & CEO of the Company until September 30, 2017 appreciating the contribution made by him to the Company in its transformation to operational excellence, which he agreed and accepted.

Changes in KMP

Pursuant to the provisions of Section 203 of the Act, the KMPs of your Company are Mr. Rakesh Sarna, MD & CEO, Mr. Mehernosh S. Kapadia, Executive Director - Corporate Affairs, Mr. Giridhar Sanjeevi, CFO, and Mr. Beejal Desai, Vice President - Legal & Company Secretary. Mr. Giridhar Sanjeevi was appointed as the CFO of the Company w.e.f. May 4, 2017 in place of Mr. Anil P. Goel. Mr. Giridhar Sanjeevi is a Chartered Accountant and holds an MBA degree from IIM -Ahmedabad.

BOARD MEETINGS

BOARD EFFECTIVENESS

Your Company has adopted the Governance Guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directorâs term, retirement age and Committees of the Board. They also cover aspects relating to nomination, appointment, induction and development of Directors, Directorâs remuneration, subsidiary oversight, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.

A. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirement as prescribed by the Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of specified criteria such as the Board Composition and structures, effectiveness of board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

The Board and the Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the individual Directors on the basis of as the contribution of the individual Director to the Board and Committee meetings based upon criteria such as preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At a separate meeting of Independent Directors, performance of Non-Independent Directors & performance of the Board as a whole was evaluated, taking into account the views of the Executive Directors and Non-Executive Directors. The same was discussed at the next Board meeting at which the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

B. Appointment of Directors and criteria for determining qualifications, positive attributes, independence of a Director

Additional Positive Attributes:

- The Directors should not have any other pecuniary relationship with your Company, its subsidiaries, associates or joint ventures and the Companyâs promoters, except as provided under law.

- The Directors should maintain an Armâs Length relationship between themselves and the employees of the Company, as also with the directors and employees of its subsidiaries, associates, joint ventures, promoters and stakeholders for whom the relationship with these entities is material.

- The Directors should not be the subject of proved allegations of illegal or unethical behaviour, in their private or professional lives.

- The Directors should have the ability to devote sufficient time to the affairs of your Company.

C. Remuneration Policy

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

The key principles governing your Companyâs Remuneration Policy are as follows:

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

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

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

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

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

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

- In addition to the basic / fixed salary, benefits, perquisites and allowances as provided above, your Company provides MD / EDs such remuneration by way of performance linked bonus, calculated with reference to the net profits of your Company for the Financial Year, as may be determined by the Board, subject to the overall limits stipulated in Section 197 of the Act. The specific amount payable to the MD / EDs would be based on performance as evaluated by the NRC and approved by the Board.

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

SIGNIFICANT AND MATERIAL ORDERS PASSED By THE REGULATORS

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companyâs operations.

STATUTORY AUDITORS

Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), the Statutory Auditors of the Company, hold office till the conclusion of the 116th AGM of the Company. The Board has recommended the appointment of BSR & Co LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), as the Statutory Auditors of the Company in their place, for a term of five consecutive years, from the conclusion of this AGM till the conclusion of the 121st AGM of the Company (subject to ratification of their appointment at every AGM, if required under the Act), for approval of the Members.

The report of the Statutory Auditors along with the Notes to Schedules is enclosed to this report and contains an Unmodified Opinion.

SECRETARIAL AUDIT

Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed BNP & Associates, Company Secretaries to undertake the Secretarial Audit of your Company for the Financial Year 2016-17. The Secretarial Audit Report is annexed herewith as Annexure IV. The report does not contain any qualifications, reservation or adverse remarks.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The details of conservation of energy are given in the Management Discussion and Analysis Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, the information relating to foreign exchange earnings and expenses is set out in Notes 40 and 41 of the Notes to the Financial Statements.

PARTICULARS OF EMPLOYEES / HUMAN RESOURCES

The disclosure required to be furnished pursuant to Section 197 (12) read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure V to this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required to be furnished pursuant to Section 197 (12) read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. However, as per the provisions of Section 136 (1) of the Act, the reports and accounts are being sent to all the Members of your Company excluding the statement of particulars of employees. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholders interested in obtaining a copy of the same may write to the Company Secretary.

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

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

During the year under review, your Company has received 19 complaints on sexual harassment, and all the complaints have been resolved and appropriate action taken, where so necessary, and no cases remain pending.

DIRECTORSâ RESPONSIBILITY STATEMENT

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

(i) In the preparation of the accounts for the year ended March 31, 2017, the applicable accounting standards have been followed and that there are no material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent in order to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the Financial Statements for the financial year ended March 31, 2017 on a âgoing concernâ basis;

(v) The Directors have laid down internal financial controls for the company which are adequate and are operating effectively;

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

CORPORATE GOVERNANCE

Your Company evolves and follows corporate governance guidelines and best practices sincerely, not just to boost long-term shareholder value, but also to respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information regarding our operations and performance, as well as the leadership and governance of the Company.

During the second half of the year under review, the Company witnessed leadership change at Tata Sons (our Promoter). During this period there were allegations made regarding the ethics and governance of the Company. Clarifications were also sought by the regulators with respect to certain business decisions and governance processes. The Company would like to categorically deny the references and would like to impress upon you that it has robust processes in place to ensure compliance to all regulatory requirements. The Companyâs Board exercises its independence both in letter and in spirit. The Directors have always acted in the best interest of the Company and will continue to do so.

Further, allegations were made in relation to certain acquisitions and divestments by the Company and the financial condition of the Company. In this regard, we wish to highlight that the Company has made various strategic investments in properties, both overseas and India, with the aim of promoting the âTajâ brand and to expand the business and operations of the Company. A number of these investments were made before the global downturn and financial crisis in 2008-09, when markets were buoyant. The âblack swanâ event of collapse of the global markets in 2008-09 had an adverse impact on the hotel industry, not just in India but globally and this led to decline in the underlying asset values of the investments made by the Company. In some cases, the Company was, therefore, forced to sell the properties at a loss - such as in the case of Orient Express Hotels (Belmond) and Taj Boston. In other cases, where required, the Company has taken write downs on the relevant investments, as per applicable accounting standards. It should also be noted that during this period, the Company had also undertaken a divestment of the Blue Sydney in Australia, on which the Company realised a profit.

Allegations were also made in relation to the terms of the lease obtained by the Company for The Pierre in New York City. The Pierre is located at 5th Avenue and 61st Street, opposite Central Park, a premier address in Manhattan. The hotel has one of the most sought-after banquet venues in New York. Leasing of The Pierre was strategically important for the Company to establish its brand as well as visibility in the USA which is a key feeder market for the Taj Groupâs Indian operations. One should note that the lease terms of The Pierre have remained largely unchanged for a long period and the hotel was run and operated on almost similar terms for the long time by earlier operators including Four Seasons, and was thus available to the Company only on similar terms. Given the strategic value that would be added by addition of The Pierre in the Companyâs portfolio of hotels, the Board of Directors of the Company had taken a considered decision to enter into the lease for The Pierre. In any event, the Company reserves the option not to renew the lease after the initial period of ten years i.e. 2025. The Company has the right but not the obligation for two renewal options, each for a ten years period up to June 30, 2045.

Questions have also been raised about the acquisition of the Sea Rock property by the Company. Acquisition of the Sea Rock property was of strategic importance to the Company, due to variety of reasons including the unique location of the property, synergy with the existing Taj Lands End Hotel and economies of scale. If a competitor were to acquire the Sea Rock property then a competitor hotel across the road would have adverse impact on the annual turnover and profitability of the marquee Taj Lands End property, in addition to obstructing the view which the Taj Lands End Hotel currently enjoys. The timing of the acquisition of the Sea Rock property was just before the 26/11 terrorist attacks in Mumbai and the collapse of the global markets in 2008/09. Prior to the latter two events, the markets were booming and the prices were buoyant. It could not be visualised that both the aforesaid events would occur in a short period post acquisition. Consequently, taking cognizance of the changed business realities, it was decided to insulate the acquisition and incubate the asset in a separate company, till such time the sector sentiments improved, whilst pursuing with design development and residual approvals. The purchase of the Sea Rock hotel was put in a separate subsidiary as the transaction had not been completed. The original owner still has a 15% stake in the property and was responsible for getting all approvals. The Company originally planned to get an international partner and for this reason, this subsidiary was created. In any event, since then, the apex holding company for the Sea Rock property was made a 100% subsidiary and amalgamated into the Company.

In the past, the Company has taken write-offs on its investments as and when required by applicable accounting standards and policies. In spite of the write-offs taken by the Company, by and large the Company has maintained a healthy dividend record (barring two financial years viz. 2013-14 and 2014-15).

Your Board has closely monitored the events that unfolded during the leadership transition. The Audit Committee of the Board (âCommitteeâ) reviewed the aforementioned issues including the correspondence between the Regulators and the Company and the allegations made by Mr. Cyrus P. Mistry (both in public as well as in the proceedings before the National Company Law Tribunal initiated against our Promoter). The Committee also reviewed the Companyâs interventions, the processes implemented and followed with respect to various compliances and disclosures and the rigours applied when such strategic investment decisions were taken. After due deliberations with relevant stakeholders and review of relevant documents, the Committee expressed its confidence in the Companyâs processes to ensure compliance with the provisions of SEBI Regulations. The Committee noted that appropriate procedures were followed by your Company in preparing its financial statements and addressing the business risk issues and that there has been compliance with all legal requirements and corporate governance standards. It follows therefore that the aforesaid allegations by Mr. Cyrus P. Mistry in the various proceedings, representations and public statements against your Company and its governance were incorrect and such statements were made without exercising proper care.

As required by the Listing Regulations the report on Management Discussion and Analysis, Corporate Governance along with the Practising Company Secretaryâs Certificate regarding compliance of conditions of Corporate Governance and Business Responsibility Reporting form part of the Annual Report.

ACKNOWLEDGEMENT

The Directors express their deep sense of appreciation for the contribution made by the employees to the significant improvement in the operations of the Company.

The Directors also thank all the stakeholders including Members, customers, lenders, vendors, investors, business partners and the Government of India for their continued co-operation and support.

On behalf of the Board of Directors

N. Chandrasekaran

Mumbai, May 26, 2017 Chairman

Registered Office:

Mandlik House,

Mandlik Road,

Mumbai 400 001.

CIN: L74999MH1902PLC000183

Tel.: 022 66395515

Fax: 022 22027442

Email: [email protected]

Website: www.tajhotels.com

Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting the 112th Annual Report of the Company together with its Audited Statement of Profit and Loss for the year ended March 31, 2013 and the Balance Sheet as on that date:

FINANCIAL RESULTS

2012-13 2011-12 Particulars Rs./crores Rs./crores

Total Income 1,924.79 1,864.72

Profit before Depreciation, Finance Costs and Tax 453.34 461.92

Less: Depreciation 125.02 113.90

Less: Finance Costs 105.20 111.99

Profit before Tax & Exceptional Item 223.12 236.03

Less: Exceptional Items 432.91 6.11

Profit/(Loss) before Tax (209.79) 229.92

Less: Provision for Tax 78.04 118.19

Add: MAT Credit - 33.62

Add: Excess Provision of Tax of earlier years (Net) 11.22 -

Profit/(Loss) after Tax (276.61) 145.35

Add: Balance brought forward from the previous year 422.67 380.13

Amount available for Appropriation 146.06 525.48

APPROPRIATIONS

(i) General Reserve - 14.54

(ii) Proposed Dividend: 64.60 75.95

Dividend of 80% i.e. Rs. 0.80/- per Ordinary Share was recommended by the Board of Directors on May 30, 2013.

(In respect of the previous year, a final dividend of 100% i.e. Rs. 1/- per Ordinary Share was declared and paid to the Members)

Tax on Dividend 10.59 12.32

(iii) Dividend paid for previous year 4.80 -

Tax on Dividend 0.78 -

(iv) Balance carried to Balance Sheet 65.29 422.67

146.06 525.48

INCOME

The total income for the year ended March 31, 2013 at Rs. 1,924.79 crores was higher than that of the previous year by 3%.

While Room Income was marginally higher than the previous year. Food & Beverage income increased by 7% over the previous year, aided by growth in banqueting income.

DEPRECIATION AND FINANCE COSTS

Depreciation for the year was higher on account of incremental depreciation charge on the Vivanta by Taj - Yeshwantpur, Bengaluru which was operational for the entire period in the current year and the on-going renovations at select hotels. Further, depreciation for the previous year was lower due to a one time reversal of excess depreciation charged on the damaged assets for the period, post the terror attack at Taj Mahal Palace, Mumbai.

Finance costs for the year ended March 31, 2013, net of currency swap gains, at Rs. 105.20 crores were lower than the finance costs of the preceding year by Rs. 6.79 crores due to retirement of debt during the year.

PROFIT BEFORE TAX & EXCEPTIONAL ITEM

Profit before Tax & Exceptional Item at Rs. 223.12 crores was lower than the previous year by 5% primarily on account of higher expenditure on Power & Fuel and higher depreciation.

EXCEPTIONAL ITEMS

Over a period of time the Company has made long term strategic investments, either directly orthrough its overseas subsidiaries, which are being carried at "cost" in its financial statements. Selectively, some of these investments have witnessed a decline in the fair value and consequent erosion in net worth on account of the global recessionary conditions that have continued unabated in recent years. Thus, it was considered prudent to recognize a diminution in the value of the investments, other than temporary, in select entities for an amount of Rs. 373 crores. This covers a diminution of Rs. 305 crores in the Company''s investment in Taj International Hotels (HK) Ltd. a Wholly Owned Subsidiary (WOS), which in turn holds investments in various international entities, including Orient-Express Hotels Ltd. In addition, a diminution other than temporary of Rs. 68 crores has been recognised in the Company''s investments in BJets Pte Ltd. The Company will continue to monitor the performance of these assets on a periodic basis.

The Company has created a provision of Rs. 27.55 crores, to satisfy the obligations of BJets Pte. Ltd, an associate company, currently under restructuring.

An amount paid of Rs. 23.11 crores (including interest Rs. 17.97 crores) has been accounted for towards a satisfactory settlement of a dispute that was under arbitration for over 25 years.

PROFIT/ (LOSS)

Due to the various Exceptional Items as explained above, Profit before Tax was at Rs. (209.79) crores as against Rs. 229.92 crores in the previous year. Similarly, Profit after Tax was at Rs. (276.61) crores as against Rs. 145.35 crores for the previous year.

CONSOLIDATED FINANCIAL RESULTS

The consolidated turnover of the Company for the year ended March 31, 2013 aggregated to Rs. 3,803.52 crores as against Rs. 3,514.90 crores for the previous year. The consolidated turnover increased by 8% due to improved turnover of the parent Company, full year impact of change in status of certain companies from associates to subsidiaries, improved turnover from certain domestic subsidiaries and the benefit of conversion of the revenues of overseas subsidiaries at a rupee rate higher than what was prevalent for the preceding year for the relevant currencies. Profit after Tax aggregated to Rs. (430.24) crores for the year as against the Profit after Tax of Rs. 3.06 crores for the previous year. The consolidated results for the year were impacted due to various Exceptional Items recognised during the year, as explained earlier. Moreover, the Company continued to face challenging environment not just in the domestic market but also across the key international markets wherein the Company owns / operates hotels.

The Company''s US hotels have shown marginal improvement in their turnover inspite of the continued challenges faced by the US economy. The Company is continuing on its focus to improve the profitability of its US operations on priority.

DIVIDEND

Your Directors are pleased to recommend a dividend of 80% or Rs. 0.80 per Ordinary Share for the year ended March 31, 2013.

EQUITY SHARE CAPITAL

During the financial year 2012-13, 4.80 crores Warrants issued to Tata Sons Limited aggregating to Rs. 497.47 crores have been converted into fully paid equity shares. Thus, the Company had received Rs. 373.10 crores, being the balance 75% of the aggregate exercise share price, and allotted 4.80 crores Equity Shares (at a price of Rs. 103.64 per share) against conversion of the Warrants into equity shares.

BORROWINGS

The total borrowings stood at Rs. 2,522.27 crores as at March 31, 2013 as against Rs. 2,679.38 crores as on March 31, 2012 for the standalone entity, a reduction of Rs. 157.10 crores.

CAPITAL EXPENDITURE

During the year under review, the Company incurred Rs. 142.41 crores towards capital expenditure, most part of which was incurred on the Company''s projects covering Vivanta by Taj hotels at Dwarka and at Guwahati, as also on the ongoing renovations at certain hotels of the Company.

BUSINESS OVERVIEW

Global economic recovery has been very gradual with the Eurozone volatility continuing during 2012, albeit at a lower intensity. The Eurozone countries continued to adopt austerity measures, as part of the fiscal adjustment.

The GDP growth in India during the year is estimated to have been around 5%. Inflation was at very high levels during the first half of the year, but has gradually come down to 7% by the end of the year. The Indian Rupee witnessed a seesaw against the US Dollar and hovered between Rs. 55 to 56/$ levels on the average. All the above factors went to weaken the overall economic mood of the country.

The International tourists arrival, worldwide, have grown to 1.035 billion in 2012, 4% above 2011 and are forecast to grow at a moderate pace in 2013. While emerging economies (constituting 47%) grew by 4.1%, the developed economies (constituting 53%) grew by 3.6%. .

The Foreign Tourist Arrivals, in India, during 2012 was 6.65 million, which translates to a 5.4% growth over the previous year. Foreign Exchange Earnings from tourism grew to Rs. 94,487 crores during 2012 from Rs. 77,591 crores in 2011, registering a growth of 21.8%.

The Taj Group launched 2 new Vivanta by Taj hotels during the year at Coorg and Gurgaon, respectively. The Group currently has a portfolio of 27 Ginger hotels with a room inventory of -2600 rooms (including 2 hotels under management contract). Projects for new Ginger hotels are at various stages of execution at Noida, Jaipur, Greater Noida, Chandigarh and Amritsar. The inventory of the Taj Group of Hotels now stands at 118 hotels with ~14,300 rooms.

Your Company continues to pursue the completion of on-going projects in a time bound manner, both in the domestic and international market, under various brands to achieve sustainable and profitable growth.

SUBSIDIARIES

The Ministry of Corporate Affairs vide their letter no. 5/12/2007-CL-lll dated February 8, 2011 has granted a general exemption under Section 212 (8) of the Companies Act, 1956 for publication of the Accounts of subsidiary Companies, subject to fulfilment of certain conditions. In view of the same, your Company is also exempted from publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the Consolidated Financial Statements of the Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts.

The Financial Statements of the subsidiary companies and other detailed information will be made available to the investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection at the Registered Office of the Company as well as the respective Registered Offices of subsidiary companies.

LISTING

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

DEBENTURES

The Company had issued the following Debentures listed on the National Stock Exchange of India Limited:

- 2,000 - 2% Unsecured Non-Convertible Debentures of the face value Rs. 10,00,000 each (Rupees Ten Lakhs only) issued on private placement basis on April 23, 2012 for an aggregate value of Rs. 200 crores (Rupees Two Hundred Crores) repayable at the end of five years from the date of allotment.

The Company had redeemed the following Debentures:

- Out of the 3,000 - 11.80% Secured Non-Convertible Debentures of the face value Rs. 10,00,000 each (Rupees Ten Lakhs only) issued on private placement basis, 50% of the face value was redeemed on December 18, 2011 for an aggregate value of Rs. 150 crores (Rupees One Hundred and Fifty Crores) and 30% of the face value was redeemed on December 18, 2012 for an aggregate value of Rs. 90 crores (Rupees Ninety Crores).

FIXED DEPOSITS

The outstanding amount of Fixed Deposits placed with your Company amounted to Rs. 0.60 crores (Previous years Rs. 286.00 crores) excluding Rs. 2.31 crores (Previous year Rs.1.75 crores), which remained unclaimed by depositors as on March 31, 2013. Your Company has stopped accepting and / or renewing Fixed Deposits from the general public and shareholders.

DIRECTORS

Mr. R. N. Tata retired as Director and Chairman of the Company, effective December 28, 2012, in accordance with the Tata Group guidelines on retirement. Mr. Tata is an iconic industrialist and an illustrious leader. He propelled the Company''s growth plans and aided it to expand the wings of the ''Taj'' Brand globally. Mr. Tata demonstrated exemplary courage & leadership during the unfortunate terrorist attack on the Taj Mumbai and provided tremendous support to the management whilst steering the Company successfully through its most trying times. The Board places on record its heartfelt appreciation for the stellar contribution made by Mr. R. N. Tata during his tenure as Chairman of the Company.

Mrs. A. R. Aga resigned as Director of the Company effective June 6, 2012, consequent upon her appointment as a Member of the Rajya Sabha. The Board places on record its appreciation for the contribution made by Mrs. A. R. Aga during her tenure as Director of the Company.

Mr. Cyrus P. Mistry was appointed as an Additional Director & Non Executive Chairman effective December 28, 2012. With Mr. Mistry taking over the mantle, the Company would benefit from his fresh perspective & dynamic leadership which would further consolidate the ''Taj'' as one of the most globally renowned brands. Mr. Guy Lindsay Macintyre Crawford was appointed as an Additional Director of the Company effective March 27, 2013. Mr. Mistry and Mr. Crawford both hold office upto the date of the forthcoming Annual General Meeting.

Mr. Raymond N. Bickson''s tenure as Managing Director ends on July 18, 2013. The Company has greatly benefited from his expertise and international experience. In view of the same, it is proposed to re-appoint Mr. Bickson as the Managing Director of the Company for a period of 5 years w.e.f. July 19, 2013. The Board commends his re-appointment as the Managing Director of the Company to the Members of the Company.

Mr. Anil P. Goel and Mr. Abhijit Mukerji''s tenure as Whole-time Directors ended on March 16, 2013. The Company has greatly benefited from their expertise and experience. In view of the same, it is proposed to re-appoint Mr. Anil P. Goel and Mr. Abhijit Mukerji as Whole-time Directors of the Company for a period of 3 years each w.e.f. March 17, 2013. The Board commends their re-appointment as Whole-time Directors of the Company to the Members of the Company.

In accordance with the Companies Act, 1956, and the Articles of Association of the Company, two of your Directors, viz., Mr. Shapoor Mistry and Mr. Deepak Parekh retire by rotation, and are eligible for re-appointment.

Your approval for their appointments as Directors has been sought in the Notice convening the Annual General Meeting of the Company.

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Practising Company Secretary''s Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report.

AUDITORS

At the Annual General Meeting, the Members will be requested to re-appoint M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm No. 117366W), and M/s. PKF Sridhar & Santhanam, Chartered Accountants (Firm No. 003990S) as the Joint Auditors for the current year and authorise the Board of Directors to fix their remuneration.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is given in Notes 37, 38 and 39 of the Notes to the Accounts.

STAFF

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

The Directors express their appreciation for the contribution made by the employees to the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

(ii) it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for that period;

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

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

On behalf of the Board of Directors

Cyrus P. Mistry

Mumbai, May 30, 2013 Chairman

Registered Office:

Mandlik House

Mandlik Road

Mumbai 400 001

Mar 31, 2012

The Directors have pleasure in presenting the 111th Annual Report of the Company together with its Audited Statement of Profit and Loss for the year ended March 31, 2012 and the Balance Sheet as on that date:

FINANCIAL RESULTS

2011-12 2010-11 Particulars Rs crores Rs crores

Total Income 1,864.72 1,737.14

Profit before Depreciation, Finance Costs and Tax 461.92 482.13

Less: Depreciation 113.90 108.40

Less: Finance Costs 111.99 146.49

Profit before Tax & Exceptional Item 236.03 227.24

Less: Exceptional Items 6.11 5.79

Profit before Tax 229.92 221.45

Less: Provision for Tax 118.19 107.50

Add: MAT Credit 33.62 32.63

Less: Short Provision of Tax of earlier years (Net) - 5.33

Profit after Tax 145.35 141.25

Add: Balance brought forward from the previous year 380.13 454.58

Amount available for Appropriation 525.48 595.83

APPROPRIATIONS

(i) General Reserve 14.54 14.13

(ii) Dividend:

A dividend of 100% i.e. Rs 1/- per Ordinary Share was recommended by the Board of Directors on May 28, 2012

(In respect of the previous year, a final dividend of 100% i.e. Rs 1/- per Ordinary Share 75.95 75.95 was declared and paid to the Members)

Tax on Dividend 12.32 12.32

(iii) Transfer to Debenture Redemption Reserve - 113.30

(iv) Balance carried to Balance Sheet 422.67 380.13

525.48 595.83

INCOME

The total income for the year ended March 31, 2012, at Rs 1,864.72 crores was higher than that of the previous year by 7%. Room Income was higher than the previous year by 6%; Food & Beverage (F&B) income also increased by 11 % over the previous year, enabled by a similar growth in banqueting income.

DEPRECIATION AND FINANCE COSTS

Depreciation for the year was higher due to incremental depreciation on the newly opened Vivanta by Taj- Yeshwantpur, Bengaluru, as also on account of Taj Falaknuma Palace, Hyderabad, being operational for the full year and the ongoing renovations at the hotels.

Finance Costs for the year ended March 31, 2012, net of currency swap gains at Rs 111.99 crores were lower than the finance costs of the preceding year by Rs 34.50 crores resulting from interest rate restructuring and increase in capitalisation of interest on hotel projects under construction.

PROFITS

Profit before Tax at Rs 229.92 crores was higher than the previous year by 4%, whereas Profit after Tax at Rs 145.35 crores was higher by 3%.

CONSOLIDATED FINANCIAL RESULTS

The consolidated turnover of the Company for the year ended March 31, 2012 aggregated to Rs 3,503.65 crores as against Rs 2,932.20 crores for the previous year. Profit after Tax aggregated to Rs 3.06 crores for the year as against the Loss after Tax of Rs 87.26 crores for the previous year.

The consolidated turnover increased by 19% on account of launch of new hotels during the year by the Company, as also due to the change in status of certain companies from associates to subsidiaries. The Company, during the year, had increased its stake in Piem Hotels Limited, an associate; resultantly it has become a subsidiary with effect from May 25, 2011. The foregoing has also resulted in certain other companies' status being changed to subsidiary. Among the Company's domestic subsidiaries, Piem Hotels Limited and Roots Corporation Limited improved their turnover. The Company's subsidiary in the flight catering segment also reported growth in turnover as well. However, its profitability has been marginal due to the continued turbulence in the aviation sector and a highly competitive environment. The Company's US hotels have shown marginal improvement in occupancies and ARRs over the previous year, notwithstanding the continuing weakness in the US economy. The Company is putting all its endeavours to turnaround the US portfolio and make it profitable in the long term. The Company's UK subsidiary continued to register a good performance in line with the previous year.

DIVIDEND

Your Directors are pleased to recommend a dividend of 100% or Rs 1/- per Ordinary Share for the year ended March 31, 2012. Dividend at the same rate is also recommended to be paid on those Ordinary Shares that may be allotted by the Company on conversion of Warrants issued by the Company upto July 20, 2012, being the commencement date of the closure of the Company's Register of Members and Share Transfer Books.

EQUITY SHARE CAPITAL

During the financial year 2010-11, the Company had allotted 3.60 crores Equity Shares (at a price of Rs 103.64 per share) and 4.80 crores Warrants on preferential basis to Tata Sons Limited. Through the preferential allotment, the Company had raised Rs 373.10 crores towards Equity issue and a further sum of Rs 124.37 crores being 25% of the aggregate exercise price of the Warrants. The Company would further receive Rs 373.10 crores, if the Warrants are exercised by Tata Sons Limited at any time before June 23, 2012.

BORROWINGS

The total borrowings stood at Rs 2,679.38 crores as at March 31, 2012 as against Rs 2,341.44 crores as on March 31, 2011 for the standalone entity. The increase in debt in the standalone entity was primarily on account of the need to retire foreign currency debt in some of the Company's off shore subsidiaries through the Parent Company.

As on March 31, 2012, the gross consolidated debt stood at Rs 3,805.49 crores. This compared favourably to the consolidated gross debt ofRs 4,243.01 crores as on March 31, 2011.

CAPITAL EXPENDITURE

During the year under review, the Company incurred Rs 153.62 crores towards capital expenditure, most part of which was incurred on the Company's projects covering Vivanta by Taj Hotels at Dwarka and at Bengaluru as also due to the ongoing renovations.

BUSINESS OVERVIEW

Global economic recovery is losing traction due to continuing Euro zone debt crisis and the resultant austerity measures being taken by the Euro zone countries.

Domestically, the state of the economy is a matter of growing concern with slowing economy, persistently high inflation, uncertain political environment and depreciation of the Indian Rupee weakening the overall economic sentiment of the country.

The International tourists arrival worldwide has grown to 980 million in 2011, 4.4% above 2010 and is forecasted to grow at a moderate pace in 2012. Emerging economies of South Asia, South-East Asia and South America led the tourism growth with 12% increase in International tourists arrivals.

In the year 2011, the tourism sector in India witnessed a growth as compared to 2010. The Foreign Tourist Arrivals in India during 2011 were 6.29 million which translates to a 9% growth over the previous year. Foreign Exchange Earnings from tourism grew from Rs 64,889 crores during 2010 toRs 77,591 crores in 2011, registering a growth of 19.6%. The domestic tourist traffic is also estimated to have increased by approximately 9% to 804 million during 2011.

The Taj Group launched 5 new Vivanta by Taj hotels during the year at Srinagar, Yeshwantpur - Bengaluru, Coimbatore, Begumpet - Hyderabad and Bekal - Kerala. Ginger Hotels currently has a portfolio of 24 hotels with a room inventory of approximately 2345 rooms. Projects for new Ginger hotels are at various stages of construction in Bengaluru, Noida, Jaipur, Faridabad, Greater Noida, Chandigarh and Amritsar. The inventory of the Taj Group of Hotels now stands at 112 hotels with 13,629 rooms.

Your Company continues to pursue the completion of ongoing projects, both in the domestic and international market, under various brands to achieve sustainable and profitable growth.

SUBSIDIARIES

The Ministry of Corporate Affairs vide their letter no. 5/12/2007-CL-flI dated February 8, 2011, has granted a general exemption under Section 212 (8) of the Companies Act, 1956, for publication of the accounts of subsidiary companies, subject to fulfilment of certain conditions. In view of the same, your company is also exempted from publication of the accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the Consolidated Financial Statements of the Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditor, forms part of the Annual Report and are reflected in the consolidated accounts.

During the year, the Company along with its wholly owned subsidiary TIFCO Holdings Limited had acquired an additional 5.36% stake in its associate company, Piem Hotels Limited (PHL) consolidating its total holdings to 51.57 %. Accordingly, PHL became a subsidiary of the Company, with effect from May 25, 2011. By virtue of this restructuring, additional 11 companies became subsidiaries (direct or indirect) of the Company.

The Financial Statements of the subsidiary companies and other detailed information will be made available to the investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection at the Registered Office of the Company as well as the respective registered offices of subsidiary companies.

LISTING

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

DEBENTURES

The Company had issued the following Debentures listed on the National Stock Exchange of India Limited:

- 2,500 - 9.95% Secured Non-Convertible Debentures of the face value of Rs 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis on July 27, 2011 for an aggregate value of Rs 250,00,00,000/- (Rupees Two Hundred and Fifty Crores) repayable at the end of ten years from the date of allotment.

- 3,000 - 10.10% Secured Non-Convertible Debentures of the face value of Rs 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis on November 18, 2011 for an aggregate value of Rs 300,00,00,000/- (Rupees Three Hundred Crores) repayable at the end of ten years from the date of allotment.

- 1,360 - 9.90% Unsecured Non-Convertible Debentures of the face value of Rs 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis on February 24, 2012 for an aggregate value ofRs 136,00,00,000/- (Rupees One Hundred and Thirty Six Crores) repayable at the end of five years from the date of allotment.

The Company had redeemed the following Debentures:

- 3,000 - 11.80% Secured Non-Convertible Debentures of the face value of Rs 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis, of which 50% of the face value was redeemed on December 18,2011 for an aggregate value ofRs 150,00,00,000/- (Rupees One Hundred and Fifty Crores).

- 2,500 - 9.5% Secured Non-Convertible Debentures of the face value of Rs 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis were redeemed on February 28, 2012 for an aggregate value of Rs 250,00,00,000/- (Rupees Two Hundred and Fifty Crores).

FIXED DEPOSITS

The outstanding amount of Fixed Deposits placed with your Company amounted to Rs 286.00 crores. (Previous year Rs 354.18 crores) excluding Rs 1.75 crores (previous year Rs 0.28 crores), which remained unclaimed by depositors as on March 31, 2012. Your Company has stopped accepting/renewing deposits from the general public and shareholders.

DIRECTORS

Mr. Mehernosh S. Kapadia was appointed as an Additional Director and as a Whole-time Director of the Company for a period of five years with effect from August 10, 2011. He holds office upto the date of the forthcoming Annual General Meeting of the Company. Taking into consideration his knowledge and experience, the Board commends his appointment as Whole-time Director of the Company to the Members of the Company. Members' approval for his appointment as Director and Whole-time Director has been sought in the Notice convening the Annual General Meeting of the Company.

In accordance with the Companies Act, 1956 and the Articles of Association of the Company, three of your Directors, viz., Mr. Jagdish Capoor, Mr. K. B. Dadiseth and Mr. Nadir Godrej retire by rotation, and are eligible for re-appointment.

CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Practising Company Secretary's Certificate regarding compliance of conditions of Corporate Governance, forms part of the Annual Report.

AUDITORS

At the Annual General Meeting, the Members will be requested to re-appoint M/s Deloitte Haskins & Sells, Chartered Accountants (Firm No. 117366W) and M/s. PKF Sridhar & Santhanam, Chartered Accountants (Firm No. 003990S) as the Joint Auditors of the Company for the current year and authorise the Board of Directors to fix their remuneration.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is given in Notes 38, 39 and 40 (Page 94) of the Notes to the financial statements.

STAFF

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

The Directors express their appreciation for the contribution made by the employees to the significant improvement in the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(ii) it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for that period;

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

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

GLOBAL COMPACT

As part of the Tata Group, your Company had signed-up to promote the United Nations "Global Compact" which lays down ten key principles to specifically address issues in the areas of human rights, labour, corruption and the environment. Your Company continues to be an active member of the Global Compact. Your Company annually submits a 'Corporate Sustainability Report' detailing its economic, environmental and social performance.

On behalf of the Board of Directors

Ratan N. Tata

Chairman

Mumbai, May 28, 2012

Registered Office:

Mandlik House

Mandlik Road

Mumbai 400 001

Mar 31, 2011

TO THE MEMBERS

The Directors have pleasure in presenting the 110th Annual Report of the Company together with its Audited profit and Loss Account for the year ended March 31, 2011 and the Balance Sheet as on that date:

FINANCIAL RESULTS

Rs. crores

Particulars 2010-11 2009-10

Total Income 1724.92 1520.36

profit before Depreciation, Interest and Tax 471.40 427.38

Less: Depreciation 108.46 104.14

Less: Interest 122.85 152.90

profit before Tax & Exceptional Item 240.09 170.34

Less: Exceptional Items 17.14 (47.91)

profit before Tax 222.95 218.25

Less: Provision for Tax 109.00 62.46

Add : MAT Credit 32.63

Less: Short Provision of Tax of earlier years (Net) 5.33 2.69

profit after Tax 141.25 153.10

Add: Balance brought forward from the previous year 454.58 539.25

Amount available for Appropriation 595.83 692.35

APPROPRIATIONS

(i) General Reserve 14.13 15.31

(ii) Dividend:

A dividend of 100% i.e. Rs. 1/- per Ordinary Share was recommended by the Board of Directors on May 24, 2011.

(In respect of the previous year, a final dividend of 100% i.e. Rs. 1/- per Ordinary Share 75.95 72.35 was declared and paid to the Members)

Tax on Dividend 12.32 11.11

(iii) Transfer to Debenture Redemption Reserve 113.30 139.00

(iv) Balance carried to Balance Sheet 380.13 454.58

595.83 692.35

INCOME

The total income for the year ended March 31, 2011 at Rs. 1724.92 crores was higher than that of the previous year by 13%. Room Income was higher than the previous year by 19%. The Average Room Rate (ARR) increased by 9% over the previous year. Food & Beverage (F&B) income also increased by 19% over the previous year, enabled by a healthy growth in banqueting income, which grew by 22% over the previous year.

DEPRECIATION AND INTEREST

Depreciation for the year was higher due to incremental depreciation on the newly opened Taj Falaknuma Palace, Hyderabad, as also on account of capitalisation of the replaced assets at the Taj Mahal Palace, Mumbai and the ongoing renovations across select hotels.

The net interest cost for the year ended March 31, 2011 at Rs. 122.85 crores was lower than the net interest cost of the preceding year by Rs. 30.05 crores. The gross interest cost for the year decreased by Rs. 18.19 crores due to retirement of debt during the year and increase in capitalisation of interest on hotel projects under construction. Interest income for the year was higher due to currency swap gains earned on the Company's foreign currency loans.

PROFITS

profit before Tax at Rs. 222.95 crores was higher than the previous year by 2%. profit after Tax at Rs. 141.25 crores was lower by 8% over the previous year, mainly due to a higher incidence of tax on business profits.

CONSOLIDATED FINANCIAL RESULTS

The consolidated turnover of the Company for the year ended March 31, 2011 aggregated to Rs. 2914.90 crores as against Rs. 2562.53 crores for the previous year. Loss after Tax which aggregated to Rs. 87.26 crores for the year reduced in comparison with the Loss after Tax ofRs. 136.88 crores for the previous year.

The consolidated turnover increased by 14% with improved domestic tourism and corporate travel which favourably impacted ARRs and occupancies across not just the Company's hotel portfolio but also the hotels in its joint ventures, subsidiaries and associates. There was an improvement in the Management Fee income from hotels under operation. The restored Taj Mahal Palace, Mumbai, the full year impact of new inventory at Taj Lands End and the recently opened Taj Falaknuma Palace, Hyderabad contributed to improved results of the Company. Among the Company's domestic subsidiaries, the subsidiary in the economy hotels segment grew its hotel portfolio thus improving its turnover. The profitability of the Company's subsidiary in the flight catering segment continued to be impacted by the pressures being faced in the aviation sector. During the year, the Company exited from its investment in the frozen foods sector. Subsequent to the successful launch of The Gateway hotels brand in 2009/10, during the year the Company launched the Vivanta by Taj brand, the response to which from our guests and the trade has been very favourable. Effectively, the Company operates its portfolio of hotels now under 4 clear and well defined brands, namely Taj Luxury Hotels, Vivanta by Taj, The Gateway hotel and Ginger hotels, each addressing opportunities at varying price points and providing to our guests well defined and consistent products, services and experiences. The Company's US subsidiary continued to be impacted by the slower-than-expected recovery in the US economy. The losses from the US portfolio have reduced and all efforts are underway to turn the portfolio profitable in the near term. The re-opening of The Pierre after renovation has resulted in turnover growth which along with other US hotels has registered increasing occupancies, the pressure on ADRs notwithstanding. The Company's UK subsidiary continued to register a good performance in line with the previous year. The international joint venture with hotels in the Maldives registered improved performance taking the benefit of full year operations of the renovated Vivanta by Taj, Coral Reef, Maldives.

DIVIDEND

Your Directors, in anticipation of a turnaround in the business, are pleased to recommend a dividend of 100 % or Rs. 1/- per Ordinary Share for the year ended March 31, 2011.

EQUITY SHARE CAPITAL

During the year, the Company allotted 3.60 crores equity shares at a price of Rs. 103.64 per share and 4.80 crores warrants on preferential basis to Tata Sons Limited. Through the preferential allotment, the Company raised Rs. 373.10 crores towards equity issue and Rs. 124.37 crores being 25% of the aggregate exercise price of the warrants. The Company would further receive Rs. 373.11 crores, if the warrants are exercised by the Tata Sons Limited at any time after April 1, 2011 but before June 23, 2012.

BORROWINGS

The total borrowings stood atRs. 2338.67 crores as at March 31, 2011 as againstRs. 2650.55 crores as on March 31, 2010, a reduction ofRs. 311.88 crores.

CAPITAL EXPENDITURE

During the year under review, the Company incurred Rs. 307.46 crores towards capital expenditure. Major expenditure was incurred on the Company's projects covering the Taj Falaknuma Palace, Hyderabad, Vivanta by Taj Hotels at Dwarka, Bangalore and towards the restoration of Taj Mahal Palace, Mumbai.

BUSINESS OVERVIEW

Travel & Tourism in Asia Pacific grew very strongly in 2010 in line with the recovery from the global recession. All Asia Pacific sub-regions made strong gains in 2010, but the best growth was in South Asia, boosted by a visible recovery in India, Sri Lanka and the region.

In the year 2010, the tourism sector in India witnessed substantial growth as compared to 2009. The Foreign Tourist Arrivals (FTA) in India during 2010 were 5.58 million as compared to the FTAs of 5.17 million during 2009, showing a growth of 8.1%. The FTA growth rate during 2009 over 2008 was (2.2)%. Foreign Exchange Earnings (FEE) from tourism during 2010 were Rs. 64,889 crores as compared to Rs. 54,960 crores during 2009, registering a growth rate of 18.1%. The growth rate in FEE from tourism during 2009 over 2008 was 8.3%. The domestic tourist traffic is also estimated to have increased by approximately 15%.

The fully restored heritage block of the Taj Mahal Palace, Mumbai reopened its doors to guests on August 15, 2010. The spectacular Falaknuma Palace, another significant addition to the Company's Palaces portfolio was opened in November, 2010 and has been well received. Four new Ginger hotels at Manesar, Chennai, East Delhi and Indore commenced operations during the year. On the International front, Taj Cape Town, South Africa with an inventory of 155 rooms and 22 apartments opened with a grand launch event. The inventory of the Taj Group of Hotels now stands at 107 hotels with 12,849 rooms. Further details on the new properties launched, product upgradation, and expansion in domestic and international markets are provided under the section Management Discussion and Analysis.

Your Company continues to pursue the completion of ongoing projects, both in the domestic and international market, under various brands to achieve sustainable and profitable growth.

SUBSIDIARIES

The Ministry of Corporate Affairs vide their Letter no. 5/12/2007-CL-III dated February 8, 2011 has granted a general exemption under Section 212 (8) of the Companies Act, 1956 for publication of the Accounts of subsidiary companies, subject to fulfilment of certain conditions. In view of the same, your Company is also exempted from publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the Consolidated Financial Statements of the Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts.

Innovative Foods Limited is no longer a subsidiary of The Indian Hotels Company Limited with effect from February 11, 2011 due to the sale of stake by Residency Foods & Beverages Limited.

The Financial Statements of the subsidiary companies and other detailed information will be made available to the investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection at the Registered Offi ce of the Company as well as the respective Registered offices of subsidiary companies.

LISTING

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

DEBENTURES

The Company had redeemed the following debentures:

(i) 3,000 - 9.86% Secured Non-Convertible Redeemable Debentures of the face value ofRs. 10,00,000/- each (Rupees Ten Lakhs only) issued on private placement basis were redeemed on September 7, 2010 for an aggregate value of Rs. 300,00,00,000 /- (Rupees Three Hundred Crores only).

(ii) 6,02,76,898 - 6% Secured Non-Convertible Redeemable Debentures of the face value of Rs. 100 /- each (Rupees Hundred only) issued on rights basis were redeemed on May 13, 2011 for an aggregate value ofRs. 602,76,89,800 /-(Rupees Six Hundred and Two Crores Seventy Six Lakhs Eighty Nine Thousand and Eight Hundred only).

FIXED DEPOSITS

Your Company's Fixed Deposit Scheme inviting deposits from the general public at a rate of 9.5% p.a. for a period of two years and 10% p.a. for a period of three years with a minimum amount of deposit being Rs. 25,000 was kept open until July 13, 2009. Your Company has since stopped accepting deposits from the general public and shareholders.

The outstanding amount of fixed deposits placed with your Company amounted to Rs. 354.18 crores (Previous year Rs. 357.49 crores) excluding Rs. 0.28 crores (Previous year Rs. 0.27 crores), which remained unclaimed by depositors as on March 31, 2011.

DIRECTORS

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

CORPORATE GOVERNANCE

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

AUDITORS

M/s N. M. Raiji & Co., Chartered Accountants, have not offered themselves for re-appointment as the Joint Auditors of the Company. The Board wishes to place on record its appreciation of the services rendered by M/s. N. M. Raiji & Co., to the Company during their tenure as Auditors of the Company.

At the Annual General Meeting, the Members will be requested to re-appoint M/s Deloitte Haskins & Sells, Chartered Accountants (Firm No. 117366W), and to appoint M/s. PKF Sridhar & Santhanam, Chartered Accountants (Firm No. 003990S) as the Joint Auditors for the current year and authorise the Board of Directors to fix their remuneration.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is given in Notes 22, 23 and 24 (Refer page 97) of the Notes to the Accounts.

STAFF

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

The Directors express their appreciation for the contribution made by the employees to the significant improvement in the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(ii) it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for that period;

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

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

GLOBAL COMPACT

As part of the Tata Group, your Company had signed up to promote the United Nations "Global Compact" which lays down ten key principles to specifically address issues in the areas of human rights, labour, corruption and the environment. Your Company continues to be an active member of Global Compact. Your Company annually submits a 'Corporate Sustainability Report' detailing its economic, environmental and social performance.

On behalf of the Board of Directors

Ratan N. Tata Chairman

Mumbai, May 24, 2011

Registered office:

Mandlik House Mandlik Road Mumbai 400 001

Mar 31, 2010

The Directors have pleasure in presenting the 109th Annual Report of the Company together with its Audited Profit and Loss Account for the year ended March 31, 2010 and the Balance Sheet as on that date:

FINANCIAL RESULTS

Rs/Crores

Particulars 2009/10 2008/09

Total Income 1566.35 1706.52

Profit before Depreciation, Interest and Tax 473.37 552.16

Less: Depreciation 104.14 94.46

Less: Interest 152.90 89.19

Profit before Tax & Exceptional Items 216.33 368.51

Less: Exceptional Items (1.92) 6.21

Profit before Tax 218.25 362.30

Less: Provision for Tax 62.46 124.58

Less: Short Provision of Tax of earlier years (Net) 2.69 3.69

Profit after Tax 153.10 234.03

Add: Balance brought forward from the previous year 539.25 536.78

Amount available for Appropriation 692.35 770.81

APPROPRIATIONS

(i) General Reserve 15.31 30.00

(ii) Dividend:

A final dividend of 100% i.e. Re. 1/- per Ordinary Share was recommended by the Board of Directors on May 26, 2010.

(In respect of the previous year, a final dividend of 120% i.e. Rs. 1.20/- per Ordinary Share was declared and paid to the Members) 72.35 86.81

Tax on Dividend 11.11 14.75

(iii) Transfer to Debenture Redemption Reserve 139.00 100.00

(iv) Balance carried to Balance Sheet 454.58 539.25

692.35 770.81

INCOME

The total income for the year ended March 31, 2010 at Rs.1566.35 crores was lower than that of the previous year by 8.2%. Room Income was lower than the previous year by 17%. The Average Room Rate (ARR) decreased by 16% over the previous year. Food & Beverage (F&B) income was 5% higher than the previous year. Banquets income grew by 12% over the previous year.

DEPRECIATION AND INTEREST

Depreciation for the year was higher due to incremental depreciation on new additions to fixed assets as also the full year impact of depreciation on the 120 rooms added to Lands End hotel in Mumbai and the Vivanta by Taj hotel that was launched at Bangalore.

Interest cost for the year ended March 31, 2010 was higher at Rs. 152.90 crores as compared to Rs. 89.19 crores in the previous year. Gross interest cost increased by Rs. 54.51 crores due to incremental debt raised during the year to retire foreign currency debt in some of the Companys off shore subsidiaries. Interest income for the year reduced on account of the utilisation of surplus funds for ongoing projects.

PROFITS

Profit before Tax at Rs. 218.25 crores was lower than the previous year by 40%. Profit after Tax at Rs. 153.10 crores was also lower by 35% over the previous year. As is well known, the Tourism industry also bore the brunt of the global economic crisis resulting in depressed occupancies, Room rates and therefore turnover and profitability.

CONSOLIDATED FINANCIAL RESULTS

The consolidated turnover of the Company for the year ended March 31, 2010 aggregated to Rs. 2606.18 crores as against Rs. 2756.63 crores for the previous year. The Loss after Tax for the year aggregated to Rs. 136.88 crores against a Profit after Tax of Rs.12.46 crores for the previous year.

The consolidated results for the year were adversely impacted on account of the challenging environment not just in the domestic tourism market but also across the key international markets across which the company owns / operates its portfolio of hotels. The global financial meltdown in the early part of the year impacted the sector adversely, which reduced margins and profitability across the hotels of the Company, its joint ventures and associates as well as reduced the management fees from hotels under operation. Closure of the heritage wing rooms of Taj Mumbai which is under restoration post the terror attack and the non-availability of the ÃLoss of ProfitÃ cover beyond the insurance indemnity period further impacted profitability during the fourth quarter. The CompanyÃs subsidiaries in the US were adversely impacted by the recession in the US economy which impacted the occupancies and average daily rates (ADRs) of the 3 hotels in that market. The Pierre hotel in NY which was closed for renovation for 18 months re-opened in June, 2009. The consolidated interest costs include the cost of debt raised to acquire a strategic stake in Orient - Express Hotels Ltd. The CompanyÃs JV in the flight catering business was also impacted by the pressures being faced by the domestic aviation sector.

At a consolidated level, the profit improvement will be strongly driven by a general improvement in the domestic economic environment which will lead to improvement in profitability of the domestic portfolio. In addition, a time bound turn around strategy for the US portfolio of hotels, which is under implementation, is expected to improve the cash flows and margins. With the opening of the Taj Cape Town as well as the benefit from the full year operations of renovated hotels viz. The Pierre, New York and Vivanta by Taj, Coral Reef, Maldives the consolidated results is expected to improve going forward.

DIVIDEND

In recognition of the fact that economy is recovering and that tourism growth is expected to continue, your Directors are pleased to recommend a dividend of 100% or Re. 1/- per Ordinary Share for the year ended March 31, 2010.

BORROWINGS

The total borrowings stood at Rs. 2650.55 crores as at March 31, 2010 as against Rs. 1766.47 crores as on March 31, 2009 for the stand alone entity. The increase in debt in the stand alone entity was primarily on account of the need to retire foreign currency debt in some of the Companys off shore subsidiaries.

As on March 31, 2010 the gross consolidated debt stood at Rs. 4460.69 crores. After adjustments for uncommitted liquidity of Rs. 759 crores on same date, the effective net consolidated debt stood at Rs. 3701.69 crores. This compared favourably to the consolidated net debt of Rs. 4646.88 crores as on March 31, 2009.

CAPITAL EXPENDITURE

During the year under review, the Company incurred Rs. 276.75 crores towards capital expenditure. Major expenditure was incurred on the Company s projects at Falaknuma Palace Hyderabad, Dwarka New Delhi, Yeshwantpur Bangalore and the restoration of Taj Mahal Palace and Tower, Mumbai.

BUSINESS OVERVIEW

The aftermath of the terror attack on the city of Mumbai in November, 2008 saw a challenging and difficult 2009-10 for the tourism and hospitality industry. Due to global slowdown, terrorist activities, H1N1 pandemic, travel advisories, etc., the foreign tourist arrivals in India during 2009 fell by 3.3%. The year witnessed a contraction in global tourism by 4.3% in comparison to which India was much better placed. Foreign Exchange Earnings (FEEÃs) from tourism increased from Rs. 15,064 crores in 2002 to Rs. 54,960 crores in 2009. The growth rate in earnings in 2009 vis-ÃÂ -vis 2008 was 8.3%.

The slowdown in the tourism sector has had a cascading effect in the tourism industry with a decrease in the occupancy and Average Room Rates. To combat the drop in revenue due to the global events, stringent cost control measures with no compromise in quality were implemented. The guest satisfaction scores at our key hotels reflect that despite the measures, the quality of our hospitality services continues to be at world class levels. The last two quarters of the year witnessed a gradual recovery in the hospitality sector.

According to the Travel & Tourism Competitiveness Report 2009 brought out by the World Economic Forum, the contribution of travel and tourism to Gross Domestic Product (GDP) is expected to be at US$ 187.3 billion by 2019. The report also states that real GDP growth for travel and tourism economy is expected to achieve an average 7.7% p.a. over the next 10 years. Export earnings from international visitors and tourism goods are expected to generate US$ 51.4 billion (nominal terms) by 2019. The travel and tourism sector which accounted for 6.4% of total employment in 2009 is expected to generate 40 million jobs i.e.7.2% of total employment by 2019.

During the year 7 new hotels were added in the Taj portfolio which included Vivanta by Taj at Panaji, Goa and The Gateway Hotel, Jodhpur apart from the 5 Ginger hotels at Durg, Guwahati, Pune, Jamshedpur and Surat. Vivanta by Taj Coral Reef, Maldives and The Pierre, New York were also reopened during the year after extensive renovations. The inventory of the Taj Group now stands at 103 hotels with 12243 rooms. On the international front, Taj Cape Town, South Africa was soft opened in February, 2010 with an inventory of 166 rooms. More details on the new properties launched, product upgradation and expansion in domestic and international markets are provided under the section Management Discussion and Analysis.

The 19th Commonwealth Games 2010 scheduled this October are expected to give a boost to the Tourism and Hospitality Industry. Tourism in India has come into its own as a brand Ã India Tourism. The Ministry of TourismÃs efforts in creating niche tourism products like heliport tourism, medical tourism, wellness tourism, adventure tourism, cruise tourism and caravan tourism has served to widen the net of this sector. A five year tax holiday has been announced to promote the growth of new hotels. Hotel projects upon being delinked from commercial real estate can now look forward to obtain credit at relaxed norms. External commercial borrowing norms have also been relaxed to solve the problem of liquidity faced by the Hotel Industry due to economic slowdown.

Your Company continues to pursue the completion of ongoing projects, both in the domestic and international market, at different price points, to achieve sustainable and a balanced profitable growth.

Terror attack

Your CompanyÃs flagship property The Taj Mahal Palace & Tower in Mumbai, has been undergoing exhaustive renovations with the intention of reinstating the hotel to its original glory. Steps have been taken to prepare the iconic hotel for the next level with an exclusive dedicated lounge, all floor butler service, exclusive concierge desk and upgraded suites to meet the contemporary ethos.

Different sections of the hotels public areas were re-opened in phases to avoid inconvenience to guests during the restoration. The rooms in the heritage wing are scheduled to re-open for guests in July this year. The three iconic restaurants namely Golden Dragon, Harbour bar and Wasabi were re-launched in December, 2009. The new dÃÂ©cor for these restaurants have received great reviews from patrons. The opening of these restaurants have also received media coverage from many key publications and dailies as also international magazines like Vogue, LeÃ Official etc.

Your Company was covered for the property damage and Loss of Profit resulting from the terror attack and a claim was filed with the insurance Company. An ÃOn A/cÃ payment of Rs. 180 crores has been received from the insurers to date. The Company is in continuous dialogue with the insurance Company for a settlement of the claim which is expected once the heritage wing is re-opened.

The Taj Public Service Welfare Trust, which was set up by the Company, has so far provided assistance to 230 affected families with disbursement/commitments of Rs. 2.27 crores.

Safety and Security

As a sequel to the terror attack, your Company sought the advice of security experts on safety and security aspects to protect the hotel properties, guests and associates. Pursuant to the recommendations of security experts, a formal risk assessment has been carried out and specialised security training arranged for the security staff at all levels. Continuous training for security awareness of all hotel staff is underway including first aid training and specialised baggage screening training. In addition to the security training, installation of new security hardware such as mechanised bollards, shatter resistant glass film and increased camera surveillance & integration systems have been implemented. Going forward safety and security would be a focus area of continuous improvement.

International Operations

The revenue share of international units constitute 28% of the Taj GroupÃs aggregate turnover. During the year under review the turnover from international hotels was 3% over that of the previous year aided by re-opening of The Pierre, New York and Vivanta by Taj, Coral Reef. With pressure on occupancies and rates, cost management continues to be the focus area. The Pierre re-opened with an impressive formal launch in October, 2009. Taj Cape Town, South Africa had a soft opening in the last quarter and is now fully operational. Barring St. James Court in London and the hotels in Sri Lanka, all the international hotels were impacted by the global slowdown. The performance of the international hotels is directly linked to the improvement in the global economy.

SUBSIDIARIES

Your Company has obtained an exemption from the Ministry of Company Affairs (MCA) vide its letter No. 47/131/2010- CL-III dated April 22, 2010, for publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies are not separately included in the Annual Report. However, the Consolidated Financial Statements of the Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts.

The Financial Statements of the subsidiary companies and other detailed information will be made available to the investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection at the Registered Office of the Company as well as the respective Registered Offices of subsidiary companies.

LISTING

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

FIXED DEPOSITS

Your CompanyÃs Fixed Deposit Scheme inviting deposits from the general public at a rate of 9.5% p.a. for a period of two years and 10% p.a. for a period of three years with a minimum amount of deposit being Rs. 25,000 was kept open for subscription till July 13, 2009. Your Company has since then stopped accepting deposits from the general public and shareholders.

The outstanding amount of fixed deposits placed with your Company amounted to Rs. 357.49 crores. (Previous years Rs. 27.18 crores) excluding Rs. 0.27 crores (Previous year Rs.0.41 crores), which remained unclaimed by depositors as on March 31, 2010.

DIRECTORS

In accordance with the Companies Act, 1956, and the Articles of Association of the Company, three of your Directors, viz., Mr. K. B. Dadiseth, Mr. Jagdish Capoor and Mr. Shapoor Mistry retire by rotation and are eligible for re- appointment.

Mr. S.K. Kandhari, Independent Director on the Board of your Company for the last 29 years stepped down on August 14, 2009 as Director on attaining the age of 75 years as per the Tata Retirement Policy applicable to Non-Executive Directors.

Mr. N. A. Soonawala, Non-Executive Director also a Director on the Board of your Company for the last 29 years, resigned as Director on March 31, 2010. Mr. SoonawalaÃs resignation was also in terms of the Tata Retirement Policy applicable to Non-Executive Directors as he would shortly attain the age of 75 years in June 2010.

The Board places on record its appreciation for the valuable services rendered during their tenure as Directors and for their contributions to the deliberations of the Board.

CORPORATE GOVERNANCE

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

AUDITORS

The Members are requested to re-appoint M/s Deloitte Haskins & Sells, Chartered Accountants (Firm No. 117366W) and M/s N. M. Raiji & Company, Chartered Accountants (Firm No. 108296W) as Joint Auditors for the current year and authorise the Board of Directors to fix their remuneration.

FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is given in Notes 21, 22 and 23 of the Notes to the Accounts.

STAFF

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

The Directors express their appreciation for the contribution made by the employees to the significant improvement in the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

DIRECTORSÃ RESPONSIBILITY STATEMENT

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

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

ii. it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for that period;

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

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

GLOBAL COMPACT

As part of the Tata Group, your Company had signed up to promote the United Nations ÃGlobal CompactÃ which lays down ten key principles to specifically address issues in the areas of human rights, labour, corruption and the environment. Your Company continues to be an active member of Global Compact. Your Company annually submits a ÃCorporate Sustainability ReportÃ detailing its economic, environmental and social performance.

On behalf of the Board of Directors

Ratan N. Tata Chairman

Mumbai, June 1, 2010

Registered Office:

Mandlik House Mandlik Road Mumbai 400 001

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