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Directors Report of Indian Hotels Company Ltd.

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 (“Ind AS”) 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, India’s increased focus on digitalization and the “Smart Cities” and “Make in India” initiatives is expected to create opportunities which may counter any slowdown globally.

INDIAN HOSPITALITY INDUSTRY

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

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 tourists’ 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 Group’s 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 (“ARR”), 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 ‘ (8.49) crores in the previous year. The Loss after Tax, Minority interest and share of associates/ joint ventures aggregating to ‘ (63.20) crores for the year has significantly reduced when compared to previous year of ‘ (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 (“Listing Regulations”), 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 (“Act”) 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 summarised in the Management Discussion and Analysis.

Amalgamation of International Hotel Management Services, LLC (“IHMS”)

As part of the Company’s 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 “Scheme”), 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 (“Bombay High Court”) 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 (“SEBI”) in terms of the SEBI Scheme Circulars and the filing of the “Certificate of Merger” with the office of the Secretary of State of the State of Delaware, both on September 29, 2016. Accordingly, the “Effective Date” 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 (“LEPPL”)

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 “Scheme”), 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 (“Bombay High Court”) 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 “Effective Date” 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 (“WOS”) 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 ‘AS Holdings LLC, Boston’, 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 Taj’s presence in the Boston market.

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 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.

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.

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 Company’s 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 Company’s 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 Company’s 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 (“RPTs”) which can be accessed on the Company’s 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 Arm’s 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 Arm’s Length. The Company has nothing to report in Form AOC-2, hence the same is not annexed.

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 Company’s 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

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 Company’s Subsidiaries, Associates and Joint Ventures in Form AOC-1 is attached to the Financial Statements of your Company.

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.

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 Company’s 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 (“AGM”) 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.

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.

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 (“CFO”) w.e.f. October 15, 2016. Mr. Goel served the Company for more than 15 years overseeing the Taj Group’s 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 (“MD & CEO”) 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

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 Governance Guidelines which, inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director’s term, retirement age and Committees of the Board. They also cover aspects relating to nomination, appointment, induction and development of Directors, Director’s 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 (“NRC”) 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

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.

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 ‘Independent Director’ if he / she meets with the criteria for ‘Independence’ as laid down in the Act, Regulation 16 of the Listing Regulations and the 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 Company’s businesses.

Additional Positive Attributes:

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

- The Directors should maintain an Arm’s 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 Company’s Remuneration Policy are as follows:

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

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

- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of 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 / Company’s operations and your Company’s capacity to pay the remuneration and be consistent with recognized best practices.

- 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.

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 / Company’s operations and your Company’s capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.

- Basic / fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, 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.

- 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 individual’s contribution.

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 Company’s 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.

DIRECTORS’ 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 Company’s internal financial controls were adequate and effective during the Financial Year 2016-17.

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 ‘going concern’ 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 Company’s 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 ‘Taj’ 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 ‘black swan’ 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 Group’s 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 Company’s 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 (“Committee”) 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 Company’s 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 Company’s 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 Secretary’s 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: investorrelations@tajhotels.com

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 “Loss of Profit” cover beyond the insurance indemnity period further impacted profitability during the fourth quarter. The Company’s 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 Company’s 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 (FEE’s) 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-à-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 – India Tourism. The Ministry of Tourism’s 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 Company’s 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 décor 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, Le’ 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 “On A/c” 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 Group’s 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 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 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. Soonawala’s 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 Auditors’ 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.

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, 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 “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, June 1, 2010

Registered Office:

Mandlik House Mandlik Road Mumbai 400 001

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