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Notes to Accounts of Indian Hotels Company Ltd.

Mar 31, 2023

Note 30: Investments in Subsidiaries

a) During the year, the Company has completed the purchase of 26,14,379 shares of Roots Corporation Limited (~ 2.78% of equity share capital of RCL) for ''34.13 crores from Tata Investment Corporation Limited on April 26, 2022. This transaction has resulted in RCL becoming the wholly-owned subsidiary of the Company. Further during the year, the Company invested ''65.00 crores, by subscribing to the Rights Issue of equity shares of RCL.

b) During the year, the Company invested ''9.11 crores in Ideal Ice Limited, its 100% subsidiary, by subscribing to its Rights Issue of equity shares.

c) During the year, the Company invested ''2.67 crores in Genness Hospitality Private Limited and ''4.75 crores in Qurio Hospitality Private Limited, its 100% subsidiaries, by subscribing to their Rights Issue of equity shares. These companies were specifically incorporated during previous year to incubate two hotels - a 4 star hotel and a 3 star hotel in Kevadia, site of Statue of Unity, Gujarat for the development (including operations and maintenance). Currently, these projects are under development.

d) During the year, the Company has won 2 bids for the development (including operation and maintenance) of a 5 star hotel in Kadmat island and Suheli island respectively in the union territory of Lakshadweep. As per the bid condition, the successful bidder is required to incorporate new companies to incubate these projects. Accordingly, the Company has incorporated the 2 subsidiaries namely Kadisland Hospitality Private Limited (100%) and Suisland Hospitality Private Limited (74%). Initial investment made in both the subsidiaries is of ''0.10 crore and ''0.07 crore respectively. Further during the year, the Company invested ''4.90 crores and ''3.63 crores respectively by subscribing to its Rights Issue of equity shares.

Note 31: Contingent Liabilities (to the extent not provided for) and Contingent Assets

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Company''s businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

(a) On account of matters in dispute:

Amounts in respect of claims asserted by various revenue authorities on the Company, in respect of taxes, etc., which are in dispute, are as under:

('' crores)
	March 31, 2023	March 31, 2022
Income tax	161.88	153.72
Entertainment tax	-	2.22
Sales tax/ State Value added tax	15.81	19.43
Property tax	179.33	225.61
Service tax	16.03	16.03
Licence Fees	22.50	22.50
Others	58.68	32.32

Footnotes:

i) The above figures excludes interest demands of ''87.68 crores (Previous year '' 90.36 crores).

ii) In respect of Income Tax matters, the Company has ongoing disputes with Income Tax Authorities relating to treatment of certain items/ adjustments carried out by the Department. The Company''s appeals are pending before various Appellate Authorities. Most of these disallowances/ adjustments, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years. Cash outflows for the above are determinable only on receipt of judgements pending with various authorities/ Tribunals. The Company expects to sustain its position on ultimate resolution of the appeals.

iii) In respect of regulatory matters please refer Note 39.

(b) On account of lease agreements:

In respect of a plot of land, on which the Company has constructed a hotel, the lessor had made a claim during financial year ("FY") 2006-07 for the period September 01, 2006 to March 31, 2007, which exceeded the amount payable as per the lessor''s own proposal by ''13.97 crore. The said proposal of the lessor had been accepted by the Company in FY 200102, without prejudice to its rights under the lease deed that it had originally entered with the lessor. The claim of the lessor is also inconsistent with the decision of the Honorable Supreme Court of India ("SC") in 2004 which decided on the quantification of lease rent up to FY 2011-12. From FY 2006-07, the lessor has been raising excessive claims, which as of March 31, 2023, aggregate to ''1,456 crore for periods commencing from September 01, 2006.

Based on legal advice, the Company has disputed the claims in a suit in the Honorable High Court of Judicature at Bombay ("Bombay HC"). The Bombay HC stayed the lessor''s notices in FY 2018-19. Pending final disposal of the suit, the lessor has been restrained from disturbing or prejudicing the Company''s possession of the plot / operation thereon, subject to the Company paying lease rentals as per the lessor''s proposal that was accepted by the Company. The Company continues to pay lease rentals on this basis and accounts for these payments in accordance with its Accounting Policy 2(h) which explains the accounting of the Company''s leases. The amount and timing of outflow of economic resources would depend on the outcome of the litigation.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented

The Company''s management does not believe, based on currently available information, that the outcomes of the above matters will have a material adverse effect on the Company''s financial position, though the outcomes could be material to the Company''s operating results for any particular period, depending, in part, upon the operating results for such period. It is not practicable for the Company to estimate the timings of cash flows, if any, in respect of the above.

(d) Claims filed by the Company:

The Company has filed claims for Government incentives in case of a new Greenfield project and an expansion hotel project. The claims are in initial stage of verification and in the absence of reasonable certainty at this stage, no income has been recognised in the financial statements.

Note 32: Guarantees Given

i) Guarantees/ Letters of Comfort given by the Company in respect of loans obtained by the Company''s subsidiaries and outstanding as on March 31, 2023 - ''127.17 crores (Previous year - '' 997.37 crores).

ii) The Company has given letter of support to certain subsidiaries during the year.

Note 33: Capital Commitments

Commitments includes the amount of purchase order (net of advance) issued to parties for completion of assets. Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is ''143.62 crores (Previous year - ''192.34 crores).

iii) Contract Balances

The contract liabilities primarily relate to the unredeemed customer loyalty points and the advance consideration received from customers for which revenue is recognised when the performance obligation is over/ services delivered.

a) Advance Collections is recognised when payment is received before the related performance obligation is satisfied. This includes advances received from the customer towards rooms/restaurant/banquets. Revenue is recognised once the performance obligation is met i.e. on room stay/ sale of food and beverage / provision of banquet services. It also includes membership fee received for Chambers Membership, Epicure membership and Spa and Health Club Memberships and disclosed as Income received in advance.

In addition, in certain circumstances the Company is committed to making additional lease payments that are contingent on the performance viz. gross operating profits, revenues etc. of the hotels that are being leased for which no lease liability has been recognised as it is contingent in nature.

Note 35: Leases - Ind AS 116

The Company has taken land and immovable properties on lease which are generally long-term in nature with varying terms, escalation clauses and renewal rights expiring within five to one hundred and ninety-eight years. On renewal, the terms of the leases are renegotiated.

b) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either

observable or unobservable and consists of the following three levels:

(a) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price/ declared NAV. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

c) Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

d) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for the equity instruments

- the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves

- the fair value of non convertible debentures is valued using FIMMDA guidelines.

- the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date

- the fair value of certain unlisted shares are determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

- the fair value of the remaining financial instruments is determined using the discounted cash flow analysis

oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by the internal audit team. The internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

a) Credit Risk

Credit risk arises from the possibility that customers or counterparty to financial instruments may not be able to meet their obligations. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits with banks, financial institutions and others, as well as credit exposures to customers, including outstanding receivables.

The Company''s policy is to place cash and cash equivalents and short-term deposits with reputable banks and financial institutions

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before entering into contract. Credit limits are established for each customer, reviewed regularly and any sales exceeding those limits require approval from the appropriate authority. There are no significant concentrations of credit risk within the Company.

b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities, Such forecasting takes into consideration the Company''s debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets.

Risk Management Framework

The Company''s Board of Directors has the overall responsibility for the establishment and oversight of the Company''s risk management framework. The Board of Directors has established a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Committee reports regularly to the Board of Directors on its activities.

c) Market Risk

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency Risk

The predominant currency of the Company''s revenue and operating cash flows is Indian Rupees (INR). Movements in foreign exchange rates can affect the Company''s reported profit, net assets.

The Company has foreign currency exposure for equity investments in its international subsidiaries. These investments are long-term and strategic in nature with no immediate plan for its disposal, hence these investments are not being hedged.

The Company uses interest rate swaps and currency swaps to hedge its exposure in foreign currency and interest rates. However, there are no such instruments outstanding at the year end.

iii) Capital Risk Management

The Company manages its capital to ensure that it will be able to continue as a going concern. The structure is managed to maintain an investment grade credit rating, to provide ongoing returns to shareholders and to service debt obligations, whilst maintaining maximum operational flexibility.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt is calculated as total borrowings (including ''current and non-current term loans'' as shown in the balance sheet) less cash and cash equivalents and current investments.

For the year ended March 31, 2023 and March 31, 2022, every 3% depreciation/ appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the Company''s profit before tax by approximately -0.01% and 0.52 % respectively.

ii) Interest rate risk

The Company adopts a policy to hedge the interest rate movement in order to mitigate the risk with regards to floating rate linked loans based on the market outlook on interest rates. This is achieved partly by entering into fixed rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.

The total borrowing at variable rate was ''0.59 crore as at March 31, 2023 (Previous year - '' Nil crores). The carrying value of the long-term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2023 would increase/ decrease by 12.77% (for the year ended March 31, 2022: increase/ decrease by 28.03%).

(b) The Company operates post retirement defined benefit plans as follows: -

a) Funded:

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b) Unfunded:

i. Pension to Executive Directors and Employees - Post retirement minimum guaranteed pension scheme for select existing and retired executive directors and certain categories of employees, which is unfunded.

ii. Post Employment Medical Benefits to qualifying employees

The Company operates Provident Fund Scheme through a Trust - ''The Indian Hotels Company Limited Employees Provident Fund'' (''the Plan''), set up by the Company and for certain categories contributions are made to State Plan.

The Plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at March 31, 2023 and March 31, 2022.

The Company contributed ''13.94 crores and ''11.30 crores towards provident fund to the Plan during the year ended March 31, 2023 and March 31, 2022 respectively and the same has been recognised in the statement of profit and loss.

In light of the Supreme Court judgement dated February 28, 2019 regarding the definition of wages for calculation of Provident fund contribution, the Company as advised, on a prudent basis, has provided for the liability prospectively from date of judgement.

(d) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising on the above, after allowing for employees'' contribution is determined as at the year end, on the basis of uniform accrual benefit, with demographic assumptions taken as Nil.

(e) The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to government security yields prevailing as at the Balance Sheet date. If the return on plan asset is below this rate, it will create a plan deficit. The current plan has a relatively balanced mix of investments in equity, government securities, bonds and other debt instruments. Due to the long-term nature of the plan liabilities, the Trustees of the Fund consider it appropriate that a reasonable portion of the plan assets should be invested in equity securities to leverage the return generated by the Fund.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially

offset by an increase in the return on the plan''s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future

salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Due to the restrictions in the type of investments that can be held by the gratuity and pension fund as per the prevalent regulations, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors. The above information has been certified by the actuary and has been relied upon by the Auditors.

Code on Social Security, 2020

The date of implementation of the Code on Social Security, 2020 (''the Code'') relating to employee benefits is yet to be notified by the Government and when implemented will impact the contributions by the Company towards benefits such as Provident Fund, Gratuity etc. The Company will assess the impact of the Code and give effect in the financial results when the Code and Rules thereunder are notified.

Note 39: Other Regulatory Matters

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices and the Company had replied to the notices. Prior to 2018, the Company has received adjudication cum demand of ''10.89 crores on certain matters which has been disputed by the Company. This has been disclosed as Contingent Liability. The Company has filed appeal against the adjudication cum demand, and the appeal is pending. During the financial year 2018-19, the Company received adjudication cum demand aggregating ''1.12 crore on three other matters being contested. The Company has filed appeals against these adjudication cum demand orders and the same are pending. For the balance Show Cause Notices, adjudication proceedings are pending.

The Company reviews its income tax treatments in order to determine its impact on the financial statements. As a practice, where the interpretation of income tax law is not clear, management relies on the some or all of the following factors to determine the probability of its acceptance by the tax authority:

- Strength of technical and judicial argument and clarity of the legislation;

- Past experience related to similar tax treatments in its own case;

- Legal and professional advice or case law related to other entities.

After analysing above factors for each of such uncertain tax treatments, where the Company expects that the probability to sustain its position on ultimate resolution of such uncertain tax treatment is remote, the Company ensures that such uncertain tax positions are adequately provided for in the Company''s financial Statements.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Company''s activities and consistent with the internal reporting provided to the chief operating decisionmaker and after considering the nature of its services, the ultimate customer availing those services and the methods used by it to provide those services, "Hotel Services" has been identified to be the Company''s sole operating segment. Hotel Services include "Revenue from Operations" including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Company''s management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2 in the summary of significant accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

Explanations to Variance in Ratios

1. Current ratio reduced due to a decrease in current investments and cash equivalents from part withdrawal of temporary surplus funds and increased levels of business activity which in turn increased trade payables, current liabilities and provisions as well as increased trade receivables.

2. Debt-equity ratio reduced due to repayment of outstanding debt from the proceeds of equity shares and increase in surplus from operational earnings.

3. Debt service coverage ratio increased due to increase in cash operating earnings and lower payments of interest and principal amounts of during the year consistent with lower levels of debt.

4. Net profit ratio improved due to an increase in net profit after tax from improvement in business volumes.

5. Return on capital employed and return on equity improved with improvement in operating margins during the year.

6. Return on investments increased with increase in yields of the investment portfolio.

7. The Company has not presented Inventory turnover ratio since it holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to total assets.

b) Transaction with Struck off Companies

The Company has reviewed transactions to identify if there are any transactions with struck off companies. To the extent information is available on struck off companies, there are only 4 transactions with struck off companies.

c) Title deeds of leased assets not held in the name of the Company:

The title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date except in respect of one commercial / residential building aggregating to '' 0.70 crore (Gross block '' 1.30 crores) constructed on the leased land, which is in the possession of the Company, acquired pursuant to a scheme of amalgamation of TIFCO Holding Limited (a wholly-owned subsidiary). The lease of the said land has expired in the year 2000. Erstwhile TIFCO Holdings Limited has filed a writ Petition in High Court of Mumbai on January 15, 2013 for renewal of lease.

d) There are no borrowings from banks or financial institutions on the basis of security of current assets of the Company.

e) The Company has used funds borrowed for the specific purposes only for the purposes which it has been borrowed.

f) With reference to Schedule 16 - Borrowings of financial statements for the year ended March 31, 2023, we confirm that all charges created/ satisfied during FY 2022-23 have been registered with the Ministry of Corporate Affairs.

g) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds other than as disclosed in Note 30 (e), to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

h) The Company has not received any funds from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

Note 47: Update on COVID-19

The business for the first quarter of previous year was impacted due to the outbreak of third wave of COVID-19. During the current year, the Company saw strong rebound in the business aided by leisure travel and gradual pickup in business travel. The Company will continue to closely monitor any material changes to future economic conditions on account of COVID-19 to assess any possible impact on the Company.

Dividends paid during the year ended March 31, 2023 out of Retained Earnings was '' 0.40 per equity share for the year ended March 31, 2022, aggregating to '' 56.82 crores.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2023, retained earnings not transferred to reserves available for distribution was '' 947.38 crores.

On April 27, 2023, the Board of Directors of the Company have proposed a final dividend of '' 1.00 per equity share in respect of the year ended March 31, 2023, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of '' 142.04 crores.

Mar 31, 2022

Cost includes improvements to buildings constructed on leasehold land - ''1,311.62 crores (Previous year - ''1,276.24 crores).

For details of pledged assets refer Note 16, footnote (ii).

Includes Building amounting to ''0.72 crore (Previous year - ''0.75 crore) acquired on amalgamation of TIFCO Holdings Ltd. is pending to be transferred in the name of the Company.

Disposals include adjustment of ''1.05 crores (Previous year - ''1.07 crores) comprising of residential flats, re-classified as held for sale.

Amortisation includes ''0.10 crore (Previous year - ''1.20 crores) which is capitalised during the year.

The Company''s leased assets mainly comprise land and hotel properties and offices. Leases contain a wide range of different terms and conditions. The term of property leases ranges from 1 to 198 years. Many of the Company''s property leases contain extension or early termination options, which are used for operational flexibility.

One of the land lease agreement with the Government has expired and is in an advanced stage of renewal. In the absence of a definitive agreement and uncertainty about the timing of the cash flows, this lease is not included in the calculation of Right-of-Use assets and corresponding Lease liabilities. The rental for this land continues to be provided as lease expense on a best estimate.

Amounts recognised in profit or loss:

The following amounts were recognised as expense:

(iv) The cash losses in one of its properties in the United States of America and in South Africa, has led the Company to reassess the recoverable amount of its investment in IHOCO BV, a wholly owned subsidiary. During the year, the Company recognised an impairment loss of ''63.22 crores (Previous year - ''179.52 crores) in the Statement of Profit and Loss which has been classified under âExceptional items" (Refer Note 28).

(v) For these investments, the Company has elected the fair value through Other Comprehensive Income irrevocable option since these investments are not held for trading.

(vi) For these investments, cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

(vii) During the year, the Company acquired 3,48,51,356 equity shares of Roots Corporation Limited (âRCL") aggregating to ~ 37.07% of the equity share capital of RCL from the existing shareholders of RCL, viz. Omega TC Holdings Pte Limited, Tata Capital Limited, and Piem Hotels Limited for an aggregate consideration of ''454.11 crores.

(viii) During the year, the Company invested ''79.95 crores in Skydeck Properties & Developers Pvt Limited, its 100% subsidiary, by subscribing to its Rights Issue of equity shares.

(ix) During the year, the Company invested ''4.90 crores in Ideal Ice Limited, its 100% subsidiary, by subscribing to its Rights Issue of equity shares.

(x) During the year, the Company purchased 4,02,846 equity shares of ELEL Hotels and Investments Limited from its erstwhile shareholders, for an aggregate acquisition cost of ''250.04 crores. With this the Company along with its subsidiaries Skydeck Properties & Developers Pvt Ltd and Sheena Investments Pvt Ltd now hold 100% the shareholding of ELEL Hotels and Investments Ltd.

(xi) During the year, the Company promoted two companies viz Genness Hospitality Private Limited and Qurio Hospitality Private Limited for hospitality projects. To meet the initial outlay on these projects the Company has invested in equity shares of these companies to the extent of ''7.23 crores and ''5.15 crores, respectively.

(xii) The fair value hierarchy and classification are disclosed in Note 36.

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

(ii) On December 15, 2021, the Company allotted 13,21,31,257 Equity Shares of face value ''1 each for cash, at a price of ''150 per equity share (including premium of ''149 per share), aggregating to ''1981.97 crore to the existing shareholders on a ârights'''' basis in the ratio of 1 Equity Share for every 9 equity shares held by equity shareholders.

(iii) During the year ended March 31, 2022, the Company has issued 9,90,09,900 fully paid up equity shares equivalent to 7.5% of the then existing paid up equity capital of the Company to Qualified Institutional Buyers in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. These shares were issued at an issue price of ''202 per share (including securities premium of ''201 per share) for an aggregate consideration of ''2,000 crores. The proceeds (net of share issue expenses) have been/will be utilised as per the objects of the issue.

(iv) Reconciliation of the shares outstanding at the beginning and at the end of the year

57,597 (Previous year - 49,027 ) Equity Shares were issued but not subscribed to as at the end of the respective years and have been kept in abeyance pending resolution of legal dispute.

Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash, bonus shares and shares bought back for the period of 5 years immediately preceding the balance sheet date Nil (Previous year - Nil)

Securities Premium: Securities premium represents the premium charged to the shareholders at the time of issuance of equity shares. The securities premium can be utilised based on the relevant requirements of the Companies Act, 2013.

Debenture Redemption Reserve: The Company created Debenture Redemption Reserve out of the profits which is available for the purpose of redemption of debentures. On redemption of debentures, the same will be transferred to General Reserve.

General Reserve: General reserve was created from time to time by way of transfer of profits from retained earnings for appropriation purposes based on the provisions of the Companies Act prior to its amendment.

Equity Instruments through Other Comprehensive Income: This represents the cumulative gains and losses arising on the revaluation of investments in equity instruments measured at fair value through other comprehensive income, under an irrevocable option, net of amounts reclassified to retained earnings when such investments are disposed off.

a) Capital Reserve: Capital reserve mainly consists of reserves transferred on amalgamation of subsidiaries in earlier years.

b) Reserve on Transfer of Equity to Entities under Common Control: It consists of gain on transfer of equity shares between entities under common control.

c) Capital Redemption Reserve: Capital Redemption Reserve was created on redemption of Preference shares in earlier years.

(i) Non-Convertible Debentures - Secured include:

a) 4,950, 7.85% Secured Non-Convertible Debentures of ''10 lakhs each aggregating ''495 crores, allotted on January 20, 2017 are repayable at par after the end of 5 years and 3 months from the date of allotment i.e on April 13, 2022. This has been classified under current maturities of long-term borrowings.

b) 3,000, 10.10% Secured Non-Convertible Debentures of ''10 lakhs each aggregating ''300 crores, allotted on November 18, 2011 have been fully redeemed on due date i.e. November 18, 2021. In the previous year, this was classified under current maturities of long-term borrowings.

c) 2,500, 9.95% Secured Non-Convertible Debentures of ''10 lakhs each aggregating ''250 crores, allotted on July 27, 2011 have been fully redeemed on due date i.e. July 27, 2021. In the previous year, this was classified under current maturities of long-term borrowings.

(ii) The Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge on a hotel property of the Company.

(iii) Non-Convertible Debentures - Unsecured include:

a) 1,500, 7.50% Unsecured Non-Convertible Debentures of ''10 lakhs each aggregating ''150 crores, allotted on April 23, 2020 are repayable at par on April 23, 2023 i.e at the end of 3^rd year from the date of allotment.

b) 3,000, 7.95% Unsecured Non-Convertible Debentures of ''10 lakhs each aggregating ''300 crores, allotted on June 05, 2020 are repayable at par on June 05, 2023 i.e at the end of 3^rd year from the date of allotment.

c) During the year, the Company issued 2,500, 6.70% Unsecured Non-Convertible Debentures of ''10 lakhs each aggregating ''250 crores, allotted on July 07, 2021. These Debentures were repayable at par on July 06, 2024 i.e at the end of 3^rd year from the date of allotment and had Call Option after every six months from the date of allotment. The Company exercised the Call option and the unsecured Non-Convertible Debentures have been fully redeemed on January 07, 2022.

(iv) Term Loan from Banks (Secured) include:

a) Secured term loan from a bank has been fully prepaid/paid during the year (Previous year - ''475 crores). In the previous year, the current maturity of the said loan amounting to ''50 crores was classified under current maturities of long-term borrowings. This loan was linked to MCLR of the bank and carried an average interest rate of 7.80%. The Company had created partial charge, on pari passu basis, on certain identified immovable properties against this loan.

b) Secured term loan from a bank has been fully prepaid/paid during the year (Previous year - ''361 crores). In the previous year, the current maturity of the said loan amounting ''38 crores was classified under current maturities of long-term borrowings. This loan was linked to MCLR of the bank and carried an average interest rate of 7.50%. The Company had created charge, on pari passu basis, on certain identified immovable properties against this loan.

(v) Term Loan from Others (Secured) include:

Secured term loan from a Financial Institution has been fully prepaid during the year ( Previous year ''250 crores).

vi) Disclosure of changes in liabilities arising from financing activities (read with cash flow statement)

This section sets out an analysis of net debt and the movement in net debt for each of the periods presented below.

Lease cost include ''6.16 crores (Previous year - ''6.21 crores) towards amortisation of Lease premium on account of measurement of interest free refundable security deposits at amortised cost.

The gross amount required to be spent by the Company during the year is ''1.87 crores (Previous year - ''7.60 crores). The Company has spent ''1.87 crores (Previous year - ''17.26 crores) on projects other than construction/acquisition of assets. The entire amount has been disbursed/ committed prior to the end of the financial year. Out of the excess amount spent, the Company has carried forward '' Nil (Previous year - ''3.00 crores) to next years to offset against the mandatory spend in subsequent 3 years.

a) During the year the Company has allotted 13,21,31,257 Rights Equity Shares of face value of ''1 each at a price of ''150 per Rights equity share (including securities premium of ''149 per share) to the eligible equity shareholders of the Company as on record date for an amount aggregating ''1981.97 crores on Rights Basis.

During the year ended March 31, 2022 the Company has issued 9,90,09,900 fully paid up equity shares equivalent to 7.5% of the then existing paid up equity capital of the Company to Qualified Institutional Buyers in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. These shares were issued at an issue price of ''202 per share (including securities premium of ''201 per share) for an aggregate consideration of ''2,000 crores.

a) The Company had signed a binding agreement for acquisition of balance equity stake of 14.28% in ELEL Hotels & Investments Ltd ("ELEL"), a step down subsidiary, from its existing shareholders for a consideration of ''250 crores payable in a phased manner on achievement of certain agreed milestones but not later than the end of December 2021. The final instalment of ''175 crores was paid out of the proceeds of the Rights issue. Consequent to this acquisition, ELEL has become a wholly owned step down subsidiary of the Company effective December 28, 2021 and 100% leasehold owner of the landmark Sea rock hotel site.

b) The Board of Directors at its meeting on October 21, 2021 had approved the purchase of balance stake in Roots Corporation Limited ("RCL") aggregating to ~ 39.84% of the equity share capital of RCL from the existing shareholders of RCL, viz. Omega TC Holdings Pte Limited, Tata Capital Limited, Tata Investment Corporation Limited and Piem Hotels Limited, at an acquisition cost not exceeding ''500 crores. The foregoing transaction will result in RCL becoming a wholly owned subsidiary of the Company. During the year, the Company has completed purchase of:

â¢ 65,35,948 shares from PIEM Hotels Limited aggregating to ''85.16 crores ( ~ 6.95 % of the equity share capital of RCL) out of the proceeds of the Rights issue

â¢ 2,60,23,954 shares from Omega TC Holdings Pte Ltd aggregating to ''339.09 crores (~ 27.68 % of the equity share capital of RCL)

â¢ 22,91,454 share from Tata Capital Limited aggregating to ''29.86 crores (~ 2.44 % of the equity share capital of RCL)

The acquisition of balance 26,14,379 shares (~ 2.78 % of the equity share capital of RCL) from Tata Investment Corporation Limited has been completed on April 26, 2022.

c) During the year, the Company has won bid for the development (including operation and maintenance) of two hotels - a 4 star hotel and a 3 star hotel in Kevadia, site of Statue of Unity, Gujarat. As per the bid condition, the successful bidder is required to incorporate new companies to incubate these projects. Accordingly, the Company has incorporated two companies namely Genness Hospitality Private Limited and Qurio Hospitality Private Limited by investing an initial sum of ''7.23 crores and ''5.15 crores respectively to acquire the lease rights of the site. Presently, these are wholly owned subsidiaries of IHCL. These projects are under development.

Note 31: Contingent Liabilities (to the extent not provided for) and Contingent Assets:

(a) On account of matters in dispute:

Amounts in respect of claims asserted by various revenue authorities on the Company, in respect of taxes, etc., which are in dispute, are as under:

('' crores)
	March 31, 2022	March 31, 2021
Income tax	153.72	208.67
Entertainment tax	2.22	2.22
Sales tax/State Value added tax	19.43	19.30
Property tax	225.61	206.65
Service tax	16.03	15.61
Licence Fees	22.50	-
Others	32.32	30.09

Footnote:

i) The above figures excludes interest demands of ''90.36 crores (Previous year - ''43.28 crores).

iii) In respect of regulatory matters please refer Note 39.

Note 31: Contingent Liabilities (to the extent not provided for) and Contingent Assets: (contd.)

(b) On account of lease agreements:

In respect of a plot of land provided to the Company under a lease agreement, on which the Company has constructed a hotel, the lessor has made a claim of ''577.43 crores to date, (13 times the previous annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim based upon legal advice, by filing a suit in the Honourable High Court of Judicature at Bombay on grounds of the lessor''s inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, within the terms of the then existing lessor''s policy as also a Supreme Court judgement on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot stretch beyond ''163.56 crores (excluding interest/penalty), and this too is being contested by the Company on merit.

Further, a "Notice of Motion" has been filed by the Company before the Honourable High Court of Judicature at Bombay, inter alia, for a stay against any further proceedings by the lessor, pending a resolution of this dispute by the Honourable Bombay High Court, and the Company has obtained a stay order from the court.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs/parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented

(d) Claims filed by the Company:

The Company had invested in a Greenfield Project in Guwahati, Assam which is eligible as "Mega Project" under the Industrial and Investment Policy of Assam, 2014 and is entitled to apply for the revenue grant under the Assam Industrial Policy. The Company had made application for the grant/subsidy which is essentially is the form of reimbursement of SGST and Luxury Tax paid for a period of 10 years upto a maximum of 150% of the original capital outlay.

The Company''s application was processed by the Industries Department of State Government of Assam and "Eligibility and Entitlement Certificate" was issued by Commissioner of Taxes, Guwahati, Assam.

The Company has received ''12.62 crores during the current financial year against the past years claim of ''13.14 crores. During the current financial year, the Company further accrued ''2.32 crores in the "Other Operating Income", of which ''0.66 crores are received.

Note 32: Guarantees given

i) Guarantees/Letters of Comfort given by the Company in respect of loans obtained by the Company''s subsidiaries and outstanding as on March 31, 2022 - ''997.37 crores (Previous year - ''411.58 crores).

ii) The Company has given letter of support to certain subsidiaries during the year.

Note 33: Capital Commitments

The Company has taken land and immovable properties on lease which are generally long-term in nature with varying terms, escalation clauses and renewal rights expiring within five to one hundred and ninety eight years. On renewal, the terms of the leases are renegotiated.

iii) Contract Balances

a) Advance Collections is recognised when payment is received before the related performance obligation is satisfied. This includes advances received from the customer towards rooms/restaurant/banquets. Revenue is recognised once the performance obligation is met i.e. on room stay/ sale of food and beverage/provision of banquet services. It also includes membership fee received for Chambers Membership, Epicure membership and Spa and Health Club Memberships and disclosed as Income received in advance.

d) Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

e) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

â¢ the use of quoted market prices for the equity instruments

â¢ the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves

â¢ the fair value of non-convertible debentures is valued using FIMMDA guidelines.

â¢ the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date

â¢ the fair value of certain unlisted shares are determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

â¢ the fair value of the remaining financial instruments is determined using the discounted cash flow analysis

(i) The Company has not disclosed the fair value of financial instruments such as trade receivables, trade payables, short-term loans, deposits etc. because their carrying amounts are a reasonable approximation of fair value.

(ii) The carrying amounts of the borrowings (excluding non-convertible debentures) that are not measured at fair value are reasonable approximation of fair value, as they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

c) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either

observable or unobservable and consists of the following three levels:

Risk management framework

The Company''s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company''s Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by the internal audit team. The internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk;

â¢ Liquidity risk;

â¢ Market risk

a) Credit risk

The Company''s policy is to place cash and cash equivalents and short-term deposits with reputable banks and financial institutions

b) Liquidity risk

The Company''s investment in foreign subsidiaries is offset partially by US dollar denominated derivative instruments and bank loan which mitigates the foreign currency risk arising from the subsidiary''s net assets.

iii) Capital Risk Management

Sensitivity

This derivative instrument has been settled during the year. For the year ended March 31, 2021, every 3% depreciation in the exchange rate between the Indian rupee and US dollar, shall reduce the Company''s profit before tax by approximately 1.54% and every 3% appreciation in the exchange rate between the Indian rupee and US dollar, shall increase the Company''s profit before tax by approximately 2.39% respectively.

c) Market risk

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency risk

The predominant currency of the Company''s revenue and operating cash flows is Indian Rupees (INR). The Company''s reported debt has an exposure to borrowings held in US dollars. Further, the Company has foreign currency exposure for its investments (equity and shareholder''s loan) in its international subsidiaries. Movements in foreign exchange rates can affect the Company''s reported profit, net assets.

Sensitivity

For the year ended March 31, 2022 and March 31, 2021, every 3% depreciation/ appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the Company''s profit before tax by approximately 0.52 % and 0.03 % respectively.

ii) Interest rate risk

The total borrowing at variable rate was '' Nil crores as at March 31, 2022 (Previous year - ''1096.85 crores). The carrying value of the long-term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2022 would increase/decrease by 28.03% (for the year ended March 31, 2021: increase/ decrease by 3.73%).

d) Risk towards Global Pandemic COVID-19

Financial instruments carried at fair value as at March 31, 2022 is ''1,310.16 crores (Previous year - ''837.40 crores) and financial instruments carried at amortised cost as at March 31, 2022 is ''1,408.40 crores (Previous year - ''720.94 crores). A significant part of the financial assets are classified as Level 1 having fair value of ''1,153.45 crores as at March 31, 2022 (Previous year - ''634.38 crores). The fair value of these assets is marked to an active market which factors the uncertainties arising out of COVID-19. The financial assets carried at fair value by the Company are mainly investments in equity shares of listed entities wherein the uncertainties arising out of COVID-19 has already been factored by the stock market as at March 31, 2021 and liquid debt securities wherein no material volatility is expected.

Trade receivables of ''218.50 crores as at March 31, 2022 (Previous year - ''196.96 crores) forms a significant part of the financial assets carried at amortised cost. Trade receivables do not have any concentrated risk and the Company does expect to recover these outstanding in due course. Further, adequate credit loss provision has been created based on the policy of the Company. The Company has specifically evaluated the potential impact with respect to customers in Airline and Travel Agents segments which could have an immediate impact though the outstanding is not significant. Further, the Company expects that there could be some delay in payments from trade receivables, over and above the credit cycle. Basis the management''s internal assessment and the provisioning policy of the Company, the allowance for doubtful trade receivables of ''28.80 crores as at March 31, 2022 (Previous year - ''26.49 crores) is considered adequate.

(b) The Company operates post retirement defined benefit plans as follows:-

a. Funded :

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded :

ii. Post Employment Medical Benefits to qualifying employees

The Company contributed ''11.30 crores and ''11.80 crores towards provident fund to the Plan during the year ended March 31, 2022 and March 31, 2021 respectively and the same has been recognised in the statement of profit and loss.

(d) Pension Scheme for Employees:

Code on Social Security, 2020:

Note 39: Other regulatory matters

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices and the Company had replied to the notices. Prior to 2018, the Company has received adjudication cum demand of ''10.89 crores on certain matters which has been disputed by the Company. This has been disclosed as Contingent Liability. The Company has filed appeal against the adjudication cum demand, and the appeal is pending. During the financial year 2018-19, the Company received adjudication cum demand aggregating ''1.12 crores on three other matters being contested. The Company has filed appeals against these adjudication cum demand orders and the same are pending. For the balance Show Cause Notices, adjudication proceedings are pending.

â¢ Strength of technical and judicial argument and clarity of the legislation;

â¢ Past experience related to similar tax treatments in its own case;

â¢ Legal and professional advice or case law related to other entities.

Deferred tax asset of '' Nil (Previous year - ''110.31 crores) has been created by the Company for the unused tax losses, out of which ''21.02 crores have been utilised in the current year. These tax losses essentially represents business losses and unabsorbed depreciation.

The recoverability of the deferred tax assets has been assessed based on:

â¢ Internal budgets, profit forecasts prepared by management, after duly considering the potential impact of COVID-19 in the future business of the Company.

â¢ applying tax principles to those forecasts; and

â¢ following the methodology required by Ind AS 12 - Income Taxes.

The Company continues to carry forward deferred tax assets of ''89.29 crores (Previous year - ''110.31 crores) based on the reasonable certainty that it will be able to fully utilise its carry forward tax losses of ''354.79 crores (comprising carried forward tax business loss and unabsorbed depreciation) in the subsequent years within stipulated time. Under the prevailing tax laws, the Company is allowed to set off unabsorbed depreciation tax losses for infinite period and business losses expires in 8 years. The Company is reasonable certain that it will have sufficient future taxable income considering the size of the Company, growth trajectory and past performance that these deferred tax asset is fully recoverable. The management will continue to monitor and review these assets based on the profit forecasts in future.

Note 46: Going Concern

Impact of COVID-19

The business has been impacted during the year on account of COVID-19. During the first three months of the year, the Company witnessed softer revenues due to the second wave of COVID-19 and consequent lockdowns in several states across the country. Also there was a third wave in the month of January 2022, resulting in restrictions in some states, which also adversely impacted the revenues. However, with increased vaccinations and consequent reduction in number of cases and easing of all restrictions, the Company has witnessed recovery in both leisure and business segments in all the other months. The Company has considered internal and external sources of information and has performed sensitivity analysis on the assumptions used and based on current estimates, expects to recover the carrying amount of these assets. The impact of

Note 46: Going Concern (contd.)

COVID-19 may be different from that estimated as at the date of approval of the financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

The Company has adequate funds at its disposal for the next 12 months to prevent any disruption of the operating cash flows and to enable the Company meet its debts and obligations as they fall due. Accordingly, the financial statements of the Company have been prepared on a going concern basis.

Explanations to variance in Ratios:

1. Current ratio was higher due to temporary surplus funds from the recently concluded issue of shares to Qualified Institutional Buyers (QIB) and repayment of contractual commitments

2. Debt-equity ratio has reduced due to increase in equity arising from issue of shares on rights basis and to QIB which was utilised to repay outstanding debt

3. Debt service coverage ratio has increased due to increase in cash operating earnings in comparison to the previous year and considers principal payments during the year which was higher than the outstanding debt at the balance sheet date.

4. Trade receivables turnover ratio increased due to better efficiency in collections

5. Trade payables turnover ratio increased with increase in volume of business activity during the year.

6. Net capital turnover ratio increased with improved with increasing net sales. The ratios for the two years are strictly not comparable due to the inclusion of temporary surplus funds from the recently concluded QIB issue.

7. Net profit ratio improved over the previous year with an improvement in business volumes and cost containment measures during the year.

8. Return on capital employed and return on equity improved with improvement in operating margins during the year. Equity and capital employed increased due to the equity issue net of repayment of debt during the year.

9. The Company has not presented the following ratios due to the reasons given below:

(a) Inventory turnover ratio: since the Company holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to Total Assets

(b) Return on investments: since the Company holds surplus funds which are temporary in nature to ensure adequate liquidity during the year and from its recent equity issues at the end of the year.

b) Transaction with Struck off Companies:

c) Title deeds of leased assets not held in the name of the Company:

The title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date except in respect of one commercial/residential building aggregating to ''0.72 crores (Gross block ''1.30 crores) constructed on the leased land, which is in the possession of the Company, acquired pursuant to a scheme of amalgamation of TIFCO Holding Limited (a wholly owned subsidiary). The lease of the said land has expired in the year 2000. Erstwhile TIFCO Holdings Limited has filed a writ Petition in High Court of Mumbai on 15 January 2013 for renewal of lease.

d) There are no borrowings from banks or financial institutions on the basis of security of current assets of the Company.

e) The Company has used funds borrowed for the specific purposes only for the purposes which it has been borrowed.

f) With reference to Schedule 16 - Borrowings of financial statements for the year ended March 31, 2022, we confirm that all charges created/satisfied during FY 2021-22 have been registered with the Ministry of Corporate Affairs.

Note 47: Additional disclosure under the regulatory requirements: (contd.)

g) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds other than as disclosed in Note 30 (d), that have been to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

â¢ provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

â¢ directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

Note 48: Dividends

Dividends paid during the year ended March 31, 2022 out of Retained Earnings was ''0.40 per equity share for the year ended March 31, 2021, aggregating to ''47.57 crores.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2022, retained earnings not transferred to reserves available for distribution was ''174.67 crores.

On April 27, 2022, the Board of Directors of the Company have proposed a final dividend of ''0.40 per equity share in respect of the year ended March 31, 2022, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of ''56.82 crores.

Mar 31, 2019

NOTE 1. CORPORATE INFORMATION

The Indian Hotels Company Limited (âIHCLâ or the âCompanyâ), is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

The Company is domiciled and incorporated in India in 1902 and has its registered office at Mandlik House, Mandlik Road, Mumbai - 400 001, India. It is promoted by Tata Sons Private Limited (formerly Tata Sons Limited), which holds a significant stake in the Company.

The financial statements for the year ended March 31, 2019 were approved by the Board of Directors and authorised for issue on April 30, 2019.

Footnote:

i) The cost of inventories recognised as an expense amounted to Rs. 333.32 crores (Previous year Rs. 320.23 crores).

ii) The cost of inventories recognised as an expense includes â 0.26 crore (Previous year â 0.78 crore) in respect of write down of inventories to net realisable value.

Footnotes:

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

(ii) Reconciliation of the shares outstanding at the beginning and at the end of the year _

(iv) 49,027 (Previous year - 49,027 ) Equity Shares were issued but not subscribed to as at the end of the respective years and have been kept in abeyance pending resolution of legal dispute.

(v) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash, bonus shares and shares bought back for the period of 5 years immediately preceding the balance sheet date Nil (Previous year - Nil)

Footnotes:

(i) Non Convertible Debentures - Secured include:

a) 4,950, 7.85% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 495 crores, allotted on January 20, 2017 are repayable at par after the end of 5th year from the date of allotment i.e on April 15, 2022.

b) 3,000, 10.10% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 300 crores, allotted on November 18, 2011 are repayable at par on November 18, 2021 i.e at the end of 10th year from the date of allotment.

c) 2,500, 9.95% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 250 crores, allotted on July 27, 2011 are repayable at par on July 27, 2021 i.e at the end of 10th year from the date of allotment.

(ii) All the Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge created on all the property, plant and equipment of the Company, both present and future.

(iii) Non Convertible Debentures - Unsecured include:

a) 2,000, 7.85% Unsecured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 200 crores, allotted on April 20, 2017 are repayable on April 20, 2020, i.e at the end of the 3rd year from the date of allotment.

b) 2,500, 2% Unsecured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 250 crores, allotted on December 9, 2009 are repayable on December 9, 2019 i.e at the end of the 10th year from the date of allotment, along with redemption premium of Rs. 12.43 lakhs per debenture. This has been classified under current maturities of long term borrowings.

(iv) Term Loan from Banks (Unsecured) include:

a) Unsecured term loan from a bank of Rs. 50 crores outstanding at the beginning of the year was repaid in April, 2018.

Footnotes:

v) Disclosure of changes in liabilities arising from financing activities (read with cash flow statement)

This section sets out an analysis of net debt and the movement in net debt for each of the periods presented below.

Footnotes:

(i) The fair value hierarchy and classification are disclosed in Note 33.

(ii) A sum of â 0.92 crore (Previous year - â 0.35 crore) due for transfer to the Investor Education and Protection Fund during the year has been transferred and there are no dues in this respect which have remained unpaid as at the Balance Sheet date.

Footnote:

Excludes Rs. Nil (Previous year - Rs. 1.36 crores) adjusted against Securities Premium Account.

(iv) Licence Fees include Rs. 6.19 crores (Previous year - Rs. 3.82 crores) towards amortisation of Lease premium on account of measurement of interest free refundable security deposits at amortised cost.

(v) The gross amount required to be spent by the Company during the year is Rs. 6.32 crores (Previous year - Rs. 5.23 crores). Against this sum, the Company has spent Rs. 6.35 crores (Previous year - Rs. 5.27 crores) on projects other than construction / acquisition of assets. The entire amount has been disbursed / committed prior to the end of the financial year.

NOTE 2. CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR) AND CONTINGENT ASSETS:

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Companyâs businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

(a) On account of matters in dispute:

Amounts in respect of claims (excluding interest and penalties) asserted by various revenue authorities on the Company, in respect of taxes, etc., which are in dispute, are as under:

Footnote:

(i) In respect of Income Tax matters, the Company has ongoing disputes with Income Tax Authorities relating to treatment of certain items/ adjustments carried out by the Department. The Companyâs appeals are pending before various Appellate Authorities. Most of these disallowances/ adjustments, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years. Cash outflows for the above are determinable only on receipt of judgements pending with various authorities/ Tribunals. The Company expects to sustain its position on ultimate resolution of the appeals.

(ii) In respect of regulatory matters please refer Note no. 36.

(b) On account of lease agreements:

In respect of a plot of land provided to the Company under a lease agreement, on which the Company has constructed a hotel, the lessor has made a claim of Rs. 432.57 crores to date, (13 times the previous annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim based upon legal advice, by filing a suit in the Honourable High Court of Judicature at Bombay on grounds of the lessorâs inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, within the terms of the then existing lessorâs policy as also a Supreme Court judgment on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot stretch beyond Rs. 115.85 crores (excluding interest / penalty), and this too is being contested by the Company on merit.

Further, a âNotice of Motionâ has been filed by the Company before the Honourable High Court of Judicature at Bombay, inter alia, for a stay against any further proceedings by the lessor, pending a resolution of this dispute by the Honourable Bombay High Court, and the Company has obtained a stay order from the court.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented

The Companyâs management does not believe, based on currently available information, that the outcomes of the above matters will have a material adverse effect on the Companyâs financial position, though the outcomes could be material to the Companyâs operating results for any particular period, depending, in part, upon the operating results for such period. It is not practicable for the Company to estimate the timings of cash flows, if any, in respect of the above.

(d) Claims filed by the Company:

The Company has filed a claim for Government subsidy with the Department of Industrial Policy and Promotion for a new greenfield hotel project which has commenced operations. The claim is in the intermediate stage of verification and in the absence of reasonable certainty at this stage on the amount that may be ultimately approved, no deferred income has been recognised.

NOTE 3. GUARANTEES GIVEN

(i) Guarantees / Letters of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2019 - Rs. 315.25 crores (Previous year - Rs. 404.23 crores). Out of this, counter indemnity for Rs. 131.44 crores (Previous year - Rs. 116.77 crores) has been obtained from a JV partner for his 50% share.

(ii) The Company has given letter of support to an associate and a joint venture during the year.

NOTE 4. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 67.57 crores (Previous year - Rs. 101.62 crores).

NOTE 5. REVENUE FROM CONTRACTS WITH CUSTOMERS

IND AS 115 âRevenue from Contracts with Customersâ

With effect from 1 April 2018, the Company has adopted Ind AS 115 âRevenue from Contracts with Customersâ that replaces Ind AS 18. It introduces a new five-step approach to measuring and recognising revenue from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for services to a customer.

The Company has opted for the cumulative effect method (modified retrospective application) permitted by Ind AS 115 upon adoption of new standard. Accordingly, the standard has been applied for the year ended March 31, 2019 only (i.e. the initial application period). This method requires the recognition of cumulative impact of adoption of Ind AS 115 on all contracts as at April 1, 2018 (âtransition dateâ) in equity and the comparative information continues to be reported under Ind AS 18. The impact of the adoption of the standard on the financial statements is not material.

Also the Company has elected to use the practical expedient that there is no financing component involved when the credit period offered to customers is less than 12 months. (Also refer Credit Risk)

Prior to adoption of IND AS 115, the Companyâs revenue was primarily comprised of Revenue from Hotel operations, Management and Operating Fee and Membership fees income. The recognition of these revenue streams is largely unchanged by Ind AS 115.

iii) Contract Balances

The contract liabilities primarily relate to the unredeemed customer loyalty points and the advance consideration received from customers for which revenue is recognized when the performance obligation is over / services delivered.

a) Advance Collections is recognised when payment is received before the related performance obligation is satisfied. This includes advances received from the customer towards rooms/restaurant/banquets. Revenue is recognised once the performance obligation is met i.e. on room stay / sale of food and beverage / provision of banquet services. It also includes membership fee received for Chambers Membership, Epicure membership and Spa and Health Club Memberships.

b) Loyalty program liability represents the liability of the Company towards the points earned by the members.

Footnote: Considering the nature of business of the Company, the above contract liabilities are generally materialised as revenue within the same operating cycle.

NOTE 6. OPERATING LEASES

The Company has taken certain vehicles, land and immovable properties on operating lease. The lease of hotel properties are generally long term in nature with varying terms, escalation clauses and renewal rights expiring within five to one hundred and ninety eight years. On renewal, the terms of the leases are renegotiated. The total lease rent paid on the same is included under Rent and Licence Fees forming part of Other Expenses (Refer Note 26, Footnote (iv)).

The minimum future lease rentals payable in respect of non-cancellable leases entered into by the Company to the extent of minimum guarantee amount are as follows:-

Footnote:

The above excludes investments in subsidiaries, joint ventures and associates amounting to Rs. 3,368.37 crores. Also, refer Note no. 29 for guarantees given by the Company.

b) Fair value hierarchy:

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis, it also includes the financial instruments which are measured at amortised cost for which fair values are disclosed.

Footnotes:

(i) The Company has not disclosed the fair value of financial instruments such as trade receivables, trade payables, short term loans, deposits etc. because their carrying amounts are a reasonable approximation of fair value.

Footnotes:

c) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

d) Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

e) Valuation technique used to determine fair value:

Specific valuation techniques used to value financial instruments include:

the use of quoted market prices for the equity instruments

the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves

the fair value of non convertible debentures is valued using FIMMDA guidelines.

the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date

the fair value of certain unlisted shares are determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

the fair value of the remaining financial instruments is determined using the discounted cash flow analysis

f) Reconciliations of level 3 fair values:

The following table shows reconciliation from the opening balances to closing balances for Level 3 fair values:

NOTE 7. FINANCIAL RISK MANAGEMENT

Risk management framework

The Companyâs Board of Directors has the overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Board of Directors has established a Risk Management Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The Committee reports regularly to the Board of Directors on its activities.

The Companyâs risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Companyâs Audit Committee oversees how management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by the internal audit team. The internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

Credit risk;

Liquidity risk;

Market risk

a) Credit risk

The Companyâs policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Companyâs reputation.

Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities, Such forecasting takes into consideration the Companyâs debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets. Also refer Note 43.

i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

ii) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual redemption premium payments on low coupon debentures.

iii) Capital Risk Management

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt is calculated as total borrowings (including âcurrent and non-current term loansâ as shown in the balance sheet) less cash and cash equivalents and Current Investment.

c) Market risk

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency risk

The predominant currency of the Companyâs revenue and operating cash flows is Indian Rupees (INR). The Companyâs reported debt has an exposure to borrowings held in US dollars. Further, the Company has foreign currency exposure for its investments (equity and shareholderâs loan) in its international subsidiaries. Movements in foreign exchange rates can affect the Companyâs reported profit, net assets.

The Companyâs investment in foreign subsidiaries is offset partially by US dollar denominated derivative instruments and bank loan which mitigates the foreign currency risk arising from the subsidiaryâs net assets.

The Company uses interest rate swaps and currency swaps to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows:-

Sensitivity

For the year ended March 31, 2019 and March 31, 2018, every 3% depreciation in the exchange rate between the Indian rupee and US dollar, shall reduce the Companyâs profit before tax by approximately 11.61% and 15.88% respectively and every 3% increase in the interest rate shall reduce the Companyâs profit before tax by approximately 5.72% and 9.92% respectively.

For the year ended March 31, 2019 and March 31, 2018, every 3% appreciation in the exchange rate between the Indian rupee and US dollar, shall increase the Companyâs profit before tax by approximately 0.58% and 1.00% respectively and every 3% decrease in the interest rate shall reduce the Companyâs profit before tax by approximately 5.32% and 9.10% respectively.

Sensitivity

For the year ended March 31, 2019 and March 31, 2018, every 3% depreciation / appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the Companyâs profit before tax by approximately 0.03 % and 0.04 % respectively.

ii) Interest rate risk

The total borrowing at variable rate was Rs. Nil as at March 31, 2019 (Previous year - Rs. 50.00 crores). The carrying value of the long term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Companyâs exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher / lower, the Other Comprehensive Income for the year ended March 31, 2019 would increase / decrease by 4.72 % (for the year ended March 31, 2018: increase / decrease by 31.45 %).

NOTE 8. EMPLOYEE BENEFITS

(a) The Company has recognised the following expenses as defined contribution plan under the head âCompanyâs Contribution to Provident Fund and Other Fundsâ (net of recoveries):

In light of the recent Supreme Court judgement dated February 28, 2019 regarding the definition of wages for calculation of Provident fund contribution, the Company as advised, on a prudent basis, has provided for the liability prospectively from date of judgement.

(b) The Company operates post retirement defined benefit plans as follows :-

a. Funded :

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded :

ii. Post Employment Medical Benefits to qualifying employees.

The Company operates Provident Fund Scheme through a Trust - âIndian Hotels Company Limited Employees Provident Fund Trustâ (âthe Planâ), set up by the Company and for certain categories contributions are made to State Plan.

The Company contributed Rs. 10.63 crores and Rs. 9.98 crores towards provident fund to the Plan during the year ended March 31, 2019 and March 31, 2018 respectively and the same has been recognised in the statement of profit and loss.

(d) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising on the above, after allowing for employeesâ contribution is determined as at the year end, on the basis of uniform accrual benefit, with demographic assumptions taken as Nil.

(e) The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

NOTE 9. OTHER REGULATORY MATTERS

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices and the Company had replied to the notices. During the earlier year, the Company has received adjudication cum demand of Rs. 10.89 crores on certain matters which has been disputed by the Company. This has been disclosed as Contingent Liability. The Company has filed appeal against the adjudication cum demand, and the appeal is pending. During the year, the Company received adjudication cum demand aggregating Rs. 1.12 crore on three other matters being contested. The Company is in the process of filing appeals against these adjudication cum demand orders. For the balance Show Cause Notices, adjudication proceedings are in progress.

NOTE 10. SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Companyâs activities and consistent with the internal reporting provided to the chief operating decision-maker and after considering the nature of its services, the ultimate customer availing those services and the methods used by it to provide those services, âHotel Servicesâ has been identified to be the Companyâs sole operating segment. Hotel Services include âRevenue from Operationsâ including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Companyâs management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2 in the summary of significant accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

NOTE 11. NEGATIVE WORKING CAPITAL

As at the year end, the Companyâs current liabilities have exceeded its current assets by Rs. 661.33 crores primarily on account of current maturities of long term borrowings aggregating Rs. 529.45 crores and liability on derivative contract of Rs. 129.57 crores falling due within 12 months following the balance sheet date. Management is confident of its ability to generate cash inflows from operations and also raise long term funds to meet its obligations on due date.

NOTE 12. DIVIDENDS

Dividends paid during the year ended March 31, 2019 out of Retained Earnings was â 0.40 per equity share for the year ended March 31, 2018.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2019, retained earnings not transferred to reserves available for distribution was Rs. 603.77 crores.

On April 30, 2019, the Board of Directors of the Company have proposed a final dividend of â 0.50 per equity share in respect of the year ended March 31, 2019, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 71.69 crores, inclusive of dividend distribution tax of Rs. 12.22 crores.

Mar 31, 2018

Note 1: Corporate Information

The Indian Hotels Company Limited (âIHCLâ or the âCompanyâ), is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

The Company is domiciled and incorporated in India in 1902 and has its registered office at Mandlik House, Mandlik Road, Mumbai - 400 001, India. It is promoted by Tata Sons Limited, which holds a significant stake in the Company.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 25, 2018.

Footnotes:

(i) Non Convertible Debentures - Secured include:

a) 4,950, 7.85% Secured Non-Convertible Debentures ofRs. 10 lakhs each aggregating Rs. 495 crores, allotted on January 20, 2017 are repayable at par after the end of 5th year from the date of allotment i.e on April 15, 2022.

b) 3,000,10.10% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 300 crores, allotted on November 18, 2011 are repayable at par on November 18, 2021 i.e at the end of 10th year from the date of allotment.

(ii) All the Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge created on all the property, plant and equipment of the Company, both present and future.

(iii) Non Convertible Debentures - Unsecured include:

a) 2,000, 7.85% Unsecured Non-Convertible Debentures ofRs. 10 lakhs each aggregatingRs. 200 crores, allotted on April 20, 2017 are repayable on April 20, 2020, i.e at the end of the 3rd year from the date of allotment.

c) 2,000, 2% Unsecured Non-Convertible Debentures ofRs. 10 lakhs each aggregating Rs. 200 crores, allotted on April 23, 2012 were repayable on April 23, 2017, i.e at the end of the 5th year from the date of allotment along with redemption premium of Rs. 4.71 lakhs per debenture. During the year, the Company has repaid these debentures on the due date.

(iv) Term Loan from Banks (Unsecured) include:

a) External commercial borrowing of US $ 95 million was taken on November 23, 2011. The loan was repayable at the end of 50th, 60th, and 72nd month from November 23, 2011 in equal instalments to achieve the average maturity of 5.05 years and carries an interest which is based on a spread over LIBOR. The first instalment of US $ 31.67 million and the second instalment of US $ 31.67 million were repaid on January 25, 2016 and November 23, 2016 respectively. During the year, the Company has repaid the last instalment of US $ 31.66 million ( Rs. 205.29 crores) due on November 22, 2017.

b) Unsecured term loan from a bank of Rs. 49.88 crores outstanding at the beginning of the year was repaid on due date. The Company had further availed an unsecured term loan from a bank of Rs. 100 crores repayable at the end of 18 months from the date of drawdown. The loan was drawn in 3 tranches of Rs. 50 crores, Rs. 40 crores and Rs. 10 crores on September 9, 2017, September 15, 2017 and September 20, 2017 respectively. The Company has prepaid an amount ofRs. 50 crores during the year. The net loan now stands at Rs. 50 crores, of which Rs. 40 crores is due on March 15, 2019 and Rs. 10 crores is due on March 20, 2019 and has been classified under current maturities of long term borrowings. The Company has prepaid the outstanding loan of Rs. 50 crores in April, 2018.

Note 2 : Accounting and Disclosures for Scheme of Amalgamation

During the year, the National Company Law Tribunal (âNCLTâ), Mumbai bench vide its Order dated March 8, 2018 has approved the Scheme of Amalgamation of TIFCO Holdings Ltd (âTIFCOâ), a wholly owned investment holding subsidiary, with the Company. The Scheme was approved by the Board of Directors on May 26, 2017. Consequent to the said Order and filing of the final certified Orders with the Registrar of the Companies, Maharashtra on April 11, 2018, the Scheme has become effective upon the completion of the filing with effect from the Appointed Date of April 1, 2017.

Upon coming into effect of the Scheme, the undertaking of TIFCO stands transferred to and vested in the Company with effect from the Appointed Date.

As this is a business combination of entity under common control, the amalgamation has been accounted using the âpooling of interestâ method (in accordance with the approved Scheme). The figures for the previous periods have been recast as if the amalgamation had occurred from the beginning of the preceding period to harmonise the accounting for the Scheme with the requirements of Appendix C of Ind AS 103 on Business Combinations. The following Assets and Liabilities and Income and Expense are included (after eliminating the intercompany balances) in the financial statements of the Company for the periods presented below:

All equity shares of TIFCO held by the Company were cancelled without any further application, act or deed. Accordingly, the investment held by the Company in TIFCO aggregating to Rs. 81.50 crores has been eliminated and the reserves and surplus of TIFCO aggregating to Rs. 159.76 crores and Rs. 151.30 crores for years ended March 31, 2018 and March 31, 2017 respectively were added on line by line basis with the respective reserves of the Company after considering the impact of the difference of accounting policies. This amalgamation did not involve any cash outflow (except for the transaction costs which was expensed out) as TIFCO was a wholly owned subsidiary and the amalgamation has been accounted using the âpooling of interestâ method. Opening cash balances aggregating to Rs. 0.31 crore were transferred to the Company.

Note 3 : Contingent Liabilities (to the extent not provided for) and Contingent Assets:

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Companyâs businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

(a) On account of matters in dispute:

Amounts in respect of claims (excluding interest and penalties) asserted by various revenue authorities on the Company, in respect of taxes, etc., which are in dispute, are as under:

Footnote:

i) In respect of Income Tax matters, the Company has ongoing disputes with Income Tax Authorities relating to treatment of certain items / adjustments carried out by the Department. The Companyâs appeals are pending before various Appellate Authorities. Most of these disallowances /adjustments, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years. Cash outflows for the above are determinable only on receipt of judgements pending with various authorities /Tribunals. The Company expects to sustain its position on ultimate resolution of the appeals.

ii) In respect of regulatory matters please refer note no. 36

(b) On account of lease agreements:

In respect of a plot of land provided to the Company under a lease agreement, on which the Company has constructed a hotel, the lessor has made a claim of Rs. 387.95 crores to date, (13 times the previous annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim based upon legal advice, by filing a suit in the Honourable High Court of Judicature at Bombay on grounds of the lessorâs inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, within the terms of the then existing lessorsâs policy as also a Supreme Court judgment on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot stretch beyond Rs. 100.41 crores (excluding interest / penalty), and this too is being contested by the Company on merit.

Further, a âNotice of Motionâ has been filed by the company before by the Honourable High Court of Judicature at Bombay, inter alia, for a stay against any further proceedings by the lessor, pending a resolution of this dispute by the Honourable Bombay High Court. In view of this, and based on legal advice, the Company regards the likelihood of sustainability of the lessorâs claim to be remote and the amount of any potential liability, if at all, to be indeterminate.

The lessorâs lawyer had given a statement before the Honourable High Court of Judicature at Bombay that it shall not give effect to its notice of termination during the pendency of the suit and the statement continues to be in force till date.

(c) Others:

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented.

(d) Key development in respect of a property:

After expiry of the license period ofTaj Mahal Hotel, New Delhi, there was an ongoing litigation between the Company and the licensor, New Delhi Municipal Council (NDMC). On April 20, 2017, the Supreme Court has permitted NDMC to conduct e-auction of license rights, and has also allowed the Company six monthsâ time to handover the premises in case the Company is unsuccessful in the e-auction. The hotel at the premises shall continue to carry out its operations in the meantime. The Supreme Court has directed that at the time of conducting such e-auction, NDMC shall take into account the unblemished record of the Company as well as its capabilities. NDMC has been directed to take into account these facts while taking a final decision in the matter. On the 9th of December, 2017, NDMC published a Tender for the hotel and land, with certain terms and conditions, vide which the auction was scheduled to take place on the 30th of January, 2018. Interested bidders, including the Company, have submitted queries on the said terms, which were supposed to be responded on the 3rd of January, 2018. However, the said responses were never published, as the dates were postponed indefinitely. Subsequently, on the 25th of April, 2018, a new Tender has been published. The Company is evaluating its options with respect to the same.

(e) Claims filed by the Company:

The Company has filed a claim for Government subsidy with the Department of Industrial Policy and Promotion for a new greenfield hotel project which has commenced operations. The claim is in the initial stage of verification and in the absence of reasonable certainty at this stage on the amount that may be ultimately approved, no deferred income has been recognised.

Note 4 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 101.62 crores (Previous Year - Rs. 62.47 crores).

Note 5: Rights Issue of Equity Shares

On November 7, 2017, the Company allotted 19,99,84,430 Equity Shares of face value of Rs. 1 each for cash, at a price of Rs. 75 per equity share (including a premium of Rs. 74 per share), aggregating to Rs. 1499.88 crores to the existing shareholders on a ârightsâ basis in the ratio of 1 Equity Share for every 5 equity shares held by equity shareholders.

Note 6 : Operating Leases

b) Fair value hierarchy

Footnotes:

c) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

(a) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price/ declared NAV. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/ debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

d) Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

e) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for the equity instruments;

- the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;

- the fair value of non convertible debentures is valued using FIMMDA guidelines;

- the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date;

- the fair value of the remaining financial instruments is determined using the discounted cash flow analysis.

f) Reconciliations of level 3 fair values

The following table shows reconciliation from the opening balances to closing balances for Level 3 fair values:

Note 7 : Financial risk management Risk management framework

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

a) Credit risk

The Companyâs policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Companyâs reputation.

i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at anytime by the Company. There were no bank loan facilities available as on March 31, 2018 (Previous Year - the bank loan facilities were available upto July 31, 2017 and had a maturity of 18 months from drawdown).

The breakup of the borrowings into fixed and floating interest rates is as follows:

ii) Maturities of financial liabilities

iii) Capital Risk Management

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt is calculated as total borrowings (including âcurrent and non-current term loansâ as shown in the balance sheet) less cash and cash equivalents.

c) Market risk

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency risk

The predominant currency of the Companyâs revenue and operating cash flows is Indian Rupee {INR). The Companyâs reported debt has an exposure to borrowings held in US Dollars. Further, the Company has foreign currency exposure for its investments (equity and shareholderâs loan) in its international subsidiaries. Movements in foreign exchange rates can affect the Companyâs reported profit, net assets.

The Companyâs investment in foreign subsidiaries is offset partially by US Dollar denominated derivative instruments and bank loan which mitigates the foreign currency risk arising from the subsidiaryâs net assets.

The Company uses interest rate swaps and currency swaps to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows:-

Sensitivity

For the year ended March 31, 2018 and March 31, 2017, every 3% depreciation in the exchange rate between the Indian rupee and US dollar, shall reduce the Companyâs profit before tax by approximately 15.88% and 14.72% respectively and every 3% increase in the interest rate shall reduce / (increase) the Companyâs profit before tax by approximately 9.92% and 5.82% respectively.

For the year ended March 31, 2018 and March 31, 2017, every 3% appreciation in the exchange rate between the Indian Rupee and US Dollar, shall increase the Companyâs profit before tax by approximately 1.00% and 3.96% respectively and every 3% decrease in the interest rate shall increase / (reduce) the Companyâs profit before tax by approximately (9.10)% and (4.94)% respectively.

Sensitivity

For the year ended March 31, 2018 and March 31, 2017, every 3% depreciation / appreciation in the exchange rate between the Indian Rupee and US Dollar, shall affect the Companyâs profit before tax by approximately 0.04% and 2.03% respectively.

ii) Interest rate risk

The total borrowing at variable rate was Rs. 50.00 crores as at March 31, 2018 (Previous Year - Rs. 125.36 crores). The carrying value of the long term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Companyâs exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2018 would increase/ decrease by 31.16% (for the year ended March 31, 2017: increase/ decrease by 6.76 %).

Note 8 : Employee Benefits

(a) The Company has recognised the following expenses as defined contribution plan under the head âCompanyâs Contribution to Provident Fund and Other Fundsâ (net of recoveries):

(b) The Company operates post retirement defined benefit plans as follows

a. Funded:

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded:

ii. Post Employment Medical Benefits to qualifying employees.

(c) Provident Fund:

The Company operates Provident Fund Scheme through a trust - âIndian Hotels Company Limited Employees Provident Fund Trustâ (âthe Planâ), set up by the Company and for certain categories contributions are made to State Plan.

The Company contributed Rs. 9.98 crores and Rs. 9.80 crores towards provident fund to the Plan during the year ended March 31, 2018 and March 31, 2017 respectively and the same has been recognised in the statement of profit and loss.

(d) Pension Scheme for Employees:

(e) The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Note 9 : Segment Information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Companyâs activities and consistent with the internal reporting provided to the chief operating decision-maker and after considering the nature of its services, the ultimate customer availing those services and the methods used by its to provide those services, âHotel Servicesâ has been identified to be the Companyâs sole operating segment. Hotel Services include âRevenue from Operationsâ including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Companyâs management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2 in the summary of significant accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

Footnote:

Non-current assets exclude financial assets, deferred tax assets, post-employment benefit assets and rights under insurance contracts.

No single customer contributes more than 10% or more of the Companyâs total revenue for the years ended March 31, 2018 and March 31, 2017.

Note 10: Earnings Per Share (EPS):

Earnings Per Share is calculated in accordance with Ind AS 33 - âEarnings Per Shareâ.

i) Guarantees/ Letters of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2018 - Rs. 404.23 crores (Previous Year - Rs. 420.29 crores). Out of this, counter indemnity for Rs. 116.77 crores (Previous Year - Rs. 122.31 crores) has been obtained from a JV partner for his 50% share.

ii) The Company has given letters of support to select subsidiaries, a joint venture and an associate during the year.

Dividends paid during the year ended March 31, 2018 out of Retained Earnings was Rs. 0.35 per equity share for the year ended March 31, 2017.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2018, retained earnings not transferred to reserves available for distribution was Rs. 411.84 crores.

On May 25, 2018, the Board of Directors of the Company have proposed a final dividend ofRs. 0.40 per equity share in respect of the year ended March 31, 2018, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 57.35 crores, inclusive of dividend distribution tax of Rs. 9.78 crores.

Note 11: Other Notes

Previous Yearâs financial statements were audited by a firm of Chartered Accountants other than B S R & Co. LLP.

Mar 31, 2017

Note 1 : Corporate Information

The Indian Hotels Company Limited (âIHCLâ or the âCompanyâ), is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

The financial statements for the year ended March 31, 2017 were approved by the Board of Directors and authorised for issue on May 26, 2017.

i) During the year the Company has converted its Shareholdersâ Deposit given to a wholly owned subsidiary, IHOCO BV into equivalent equity in that company at fair value as on the date of conversion. Arising out of amalgamation of IHMS LLC with the Company (Refer Note 29, Page 148), 77,30,000 shares of IHOCO BV have vested in the Company on April 1, 2015 at their carrying value of US$ 141.22 million equivalent to Rs.667.56 crores. Although the above shares were actually issued on October 16, 2015, the same have been accounted as on April 1, 2015 to harmonise the accounting of the amalgamation required under the approved Scheme with the provisions of Appendix C of Ind AS 103 (Refer Note 29, Page 148).

ii) As a result of the amalgamation of Lands End Properties Private Ltd. with the Company, 98,288 shares of Skydeck Properties and Developers Private Ltd. have vested in the Company on April 1, 2015 at their carrying value of Rs.275.94 crores. These shares were held by LEPPL as on April 1, 2015 and were vested in the Company with effect from that date as a result of the application of Appendix C of Ind AS 103 used in accounting for the said amalgamation (refer Note 29, Page 148).

iii) Transfer of shares is restricted due to option granted for 10 years upto July, 2021 to Tata Realty and Infrastructure Ltd. for repurchase of the shares at par value. Tata Realty and Infrastructure Ltd. has deposited a sum of Rs.71.10 crores (March 31, 2016 Rs.71.10 crores, April 1, 2015 Rs.71.10 crores) as Option Deposit (Refer Note 16(b), Page 138), which shall be adjusted upon exercise of the option or refunded.

iv) The continuing losses at its properties in the United States of America, has led the Company to reassess the recoverable amount of its investment in IHOCO BV, a wholly owned subsidiary. During the year, the Company recognised an impairment loss of Rs.64.33 crores (previous year Rs.Nil) in the Statement of Profit and Loss which has been classified under âExceptional itemsâ (Refer Note 27, Page 145).

v) For these investments, the Company has elected the fair value through Other Comprehensive Income irrevocable option since these investments are not held for trading.

vi) During the previous year, the Company has divested 90,000 shares in Tata Projects Ltd. (fair valued through Other Comprehensive Income) to unlock the value in existing assets. The fair value of the investment at the date of derecognition was Rs.56.69 crores and the cumulative gain on disposal was Rs.56.53 crores.

vii) For this investment, cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

viii) The fair value hierarchy and classification are disclosed in Note 33, Page 151.

Footnotes:

(i) As a part of the Companyâs initiative to restructure and hold its investments in overseas assets through IHOCO BV (âIHOCOâ), a wholly owned subsidiary of the Company, the Company had transferred 34,375,640 shares in TAL Lanka Hotels PLC (âTAL Lankaâ) and 1,329,778 shares in TAL Hotels & Resorts Ltd. (âTAL Hotelsâ) to IHOCO in the previous year. The total consideration payable by IHOCO of Rs.111.73 crores was based on market value of shares of TAL Lanka and the fair value of TAL Hotels as determined by an independent valuer. As the funds for the acquisition of the above shares were sourced from the Company, the gain on transfer of Rs.79.38 crores was recorded within Reserve on Transfer of Equity to entities under common control.

(ii) During the year under review, the Honourable High Court of Bombay had approved the two separate Schemes of Arrangement of the Company which inter alia included the amalgamation of its wholly owned subsidiaries namely International Hotel Management Services LLC (through âIHMS Schemeâ) and Lands End Properties Private Limited (through âLEPPL Schemeâ) with the Company itself.

Consequent to the Order and subsequent approval of Securities and Exchange Board of India (âSEBIâ) and other regulatory filing the IHMS Scheme had become effective on September 29, 2016 with effect from the appointed date of January 1, 2016 and LEPPL Scheme had become effective on December 19, 2016 with effect from the appointed date of March 31, 2016.

As these are common control transactions, the amalgamation has been accounted using the âpooling of interestâ method and the figures for the previous year have been recast as if the amalgamation had occurred from the beginning of the preceding year to harmonise the accounting approved in the Scheme with the requirements of Appendix C of Ind AS 103 on Business Combinations. However, the effect of capital reduction has been given on the respective Appointed Dates. Consequently, an aggregate sum of Rs.2020.36 crores has been reduced from the Securities Premium Account at the respective Appointed Dates (Refer Note 29, Page 148).

Footnotes: (i) non Convertible debentures - Secured include:

a) 4,950, 7.85% Secured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.495 crores, allotted on January 20, 2017 are repayable at par after the end of 5th year from the date of allotment on April 15, 2022.

b) 3,000, 10.10% Secured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.300 crores, allotted on November 18, 2011 are repayable at par on November 18, 2021 i.e at the end of 10th year from the date of allotment.

c) 2,500, 9.95% Secured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.250 crores, allotted on July 27, 2011 are repayable at par on July 27, 2021 i.e at the end of 10th year from the date of allotment.

d) 3,000, 2% Secured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.300 crores, allotted on March 22, 2010 were repayable in 3 annual instalments commencing at the end of 5th, 6th & 7th year from the date of allotment along with redemption premium of Rs.6.13 lakhs per debenture. The company had repaid the first instalment of Rs.60 crores on March 23, 2015 and the second instalment of Rs.90 crores on March 22, 2016. During the year, the Company has repaid the last instalment of Rs.150 crores due on March 22, 2017.

e) 5210, Zero coupon Secured Non-Convertible Debentures of Rs.10 lakhs each, allotted on February 13, 2013 and repaid on February 12, 2016 at the end of 3 years from the date of allotment having a Yield to maturity of 10% p.a. The Debentures were secured by pledge of the Companyâs 100% investment in Skydeck Properties & Developers Private Limited (SPDPL), a wholly owned subsidiary of the Company and receivables of Lands End Properties Private Limited prior to amalgamation with the Company.

(ii) All the Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge created on all the property, plant and equipment of the Company, both present and future.

(iii) Non Convertible debentures - Unsecured include:

a) 2,500, 2% Unsecured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.250 crores, allotted on December 9, 2009 are repayable on December 9, 2019 i.e at the end of the 10th year from the date of allotment, along with redemption premium of Rs.12.43 lakhs per debenture.

b) 2,000, 2% Unsecured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.200 crores, allotted on April 23, 2012 are repayable on April 23, 2017, i.e at the end of the 5th year from the date of allotment along with redemption premium of Rs.4.71 lakhs per debenture.

c) 1,360, 9.90% Unsecured Non-Convertible Debentures of Rs.10 lakhs each aggregating Rs.136 crores, allotted on February 24, 2012 were repayable on February 24, 2017 i.e at the end of the 5th year from the date of allotment. During the year, the Company has repaid these debentures on the due date.

(iv) Term loan from Banks (Unsecured) include:

a) External commercial borrowing of US $ 95 million was taken on November 23, 2011. The loan is repayable at the end of 50th, 60th, and 72nd month from November 23, 2011 in equal instalments to achieve the average maturity of 5.05 years and carries an interest which is based on a spread over LIBOR. The first instalment of US $ 31.67 million and the second instalment of US $ 31.67 million has been repaid on January 25, 2016 and November 23, 2016 respectively. The last instalment of US $ 31.66 million ( Rs.204.52 crores) is due on November 22, 2017 and has been classified under current maturities of long term borrowings.

b) Unsecured term loan from a bank of Rs.125 crores carrying interest rate of 9.50% p.a. was taken during the previous year repayable at the end of 18 months from the date of first drawdown. The loan was drawn in 2 tranches of Rs.60 crores and Rs.65 crores on February 9, 2016 and March 21, 2016 respectively. Further, Rs.25 crores was drawn on May 30, 2016. The Company has prepaid the loan of Rs.100 crores on March 31, 2017. The net loan now stands at Rs.49.88 crores. The interest rate has reduced to 8.25% p.a. as on March 31, 2017.

(v) Secured loan from Bank consists of overdraft facilities. These are secured by hypothecation of operating supplies, stores, food and beverages and receivables.

(iv) Licence Fees includes Rs.3.59 crores (Previous year Rs.4.15 crores) towards amortisation of Lease premium on account of measurement of interest free refundable security deposits at amortised cost.

(v) The gross amount required to be spent by the Company during the year is Rs.4.26 crores (Previous year Rs.3.59 crores). Against this sum, the Company has spent Rs.4.36 crores (Previous year Rs.0.92 crores) on projects other than construction/ acquisition of assets. The entire amount has been disbursed prior to the end of the financial year.

Note 2 : Transition to ind As

In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (âprevious GAAPâ). The exemptions and exceptions applied by the Company in accordance with Ind AS 101 âFirst-time Adoption of Indian Accounting Standardsâ along with the reconciliations of equity, total comprehensive income and statement of cash flows in accordance with Previous GAAP to Ind AS are explained below.

Exemptions from retrospective application:

The Company has applied the following exemptions:

i. Business combinations exemption

The Company has elected not to apply Ind AS 103, Business Combinations, to business combinations occurred before the transition date.

ii. Property, plant and equipment and intangible assets - deemed Cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities included in the cost of property, plant and equipment (Para D7AA of Appendix D). This exemption can also be used for intangible assets covered by Ind AS 38 âIntangible Assetsâ and investment property covered by Ind AS 40 âInvestment Propertiesâ.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

a. The back ended premium on redemption on low coupon bonds had been offset against the Securities Premium Account under previous GAAP, which is now recognised in the Statement of Profit and Loss over the tenure of the borrowing as part of interest expense by applying the effective interest rate method. The redemption premium for unexpired period as at the date of transition has been added back to Securities Premium Account.

b. The Company has entered into cross currency swap contracts. Under previous GAAP, at the each reporting date, the notional amounts are restated at the closing exchange rates and recognized as liability. Under Ind AS, derivatives which are not designated as hedging instruments are fair valued with the resulting changes being recognised in the Statement of Profit and Loss.

c. The Company operates loyalty programme, which allows its members to earn, accumulate and redeem the points based on their spending at the Hotels. Under the previous GAAP, the company created a provision towards its liability under the programme.

Under Ind AS, the revenues have been allocated between the services rendered and points issued. The consideration allocated to the points has been deferred and will be recognized as revenue when the points are redeemed or lapse.

d. Interest free security deposits for leased premises (that are refundable in cash on completion of the lease term) were recorded at their transaction value under the previous GAAP. Under Ind AS, these deposits are recognized at fair value on the date of transaction, difference being taken to prepaid rent. Prepaid rent is amortised over the tenure of the deposit, which is partially set off by the notional interest income recognised on such deposit.

e. Under the previous GAAP, long term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. Fair value changes with respect to investments in equity instruments designated as at fair value through Other Comprehensive Income (FVOCI) have been recognised in Equity through other comprehensive income as at the date of transition and subsequently in the other comprehensive income for the year ended March 31, 2016. Also, profit on sale of investment recognised under previous GAAP is now reversed as the investment was fair valued on transition date.

f. Under Ind AS, dividend to holders of equity instruments is recognised as a liability in the period in which the obligation to pay is established. Under Previous GAAP, dividend payable is recorded as liability in the period to which it relates. This has resulted in an increase in equity by Rs.35.72 crores and Rs.Nil as on March 31, 2016 and April 1, 2015 respectively.

g. Compulsorily Convertible Debentures (âCCDsâ) were considered as a liability under the Previous GAAP. Under Ind AS, CCDs are considered as other equity. These were converted in to Equity shares on March 1, 2016.

h. Deferred taxes have been recognised on the adjustments made on transition to Ind AS.

i. Exchange difference on revaluation of Long Term Borrowings/ assets is recognised in the Statement of Profit and Loss under Ind AS. Under the previous GAAP, these translation differences were previously being amortised over the tenure of the borrowing. Previously translation gain on Investment in Non-Integral Foreign Operations was taken to Foreign Currency Translation Reserve (FCTR).

j. Under Ind AS, certain items of income and expense that are not recognised in profit or loss but in Other Comprehensive Income and these includes remeasurement of defined benefit plans and fair value gains or losses on equity instruments measured subsequently at FVOCI. The concept of Other Comprehensive Income did not exist under previous GAAP, k. Under Ind AS, Lands End Properties Private Ltd. was amalgamated into the Company with effect from April 1, 2015 in line with Appendix C to Ind AS 103. Accordingly, the changes in cash flows reflect the impact on account of the aforesaid treatment (Refer Note 29, Page 148).

Note 3 : Accounting and disclosures for schemes of arrangement

During the current year, the Honourable High Court of Bombay vide its Orders dated August 12, 2016 and October 13, 2016 respectively has approved the Schemes of Arrangement (the âIHMS Schemeâ and the âLEPPL Schemeâ ) which inter alia includes the amalgamation of International Hotel Management Services LLC (âIHMS LLCâ) and Lands End Properties Private Ltd (âLEPPLâ) with the Company. Both these Schemes were approved by the Board and members on October 19, 2015 and May 4, 2016 respectively. Consequent to the said Orders and subsequent approval of SEBI and the filing of the final certified Orders with the Registrar of the Companies, Maharashtra and with the Secretary of the State of the Delaware, the IHMS Scheme has become effective on September 29, 2016 with effect from the Appointed Date of January 1, 2016 and the LEPPL Scheme has become effective on December 19, 2016 with effect from the Appointed Date of March 31, 2016.

Upon the coming into effect of the Schemes and with effect from the Appointed Dates, the undertaking of IHMS LLC and LEPPL have been transferred to and vested in the Company from the respective Appointed Dates. Further, in terms of the above referred Orders, the effect of the capital reduction aggregating to Rs.2020.36 crores for both the Schemes has been given effect to on the respective Appointed Dates and adjusted against the Securities Premium Account.

As these are business combinations of entities under common control, the amalgamation has been accounted using the âpooling of interestâ method (in accordance with the approved Schemes). The figures for the previous period have been recast as if the amalgamation had occurred from the beginning of the preceding period to harmonise the accounting for the Scheme with the requirements of Appendix C of Ind AS 103 on Business Combinations and the following assets and liabilities were included (after eliminating the intercompany balances and adjusting the accumulated losses of the Company as on January 1, 2016 aggregating to Rs.358.58 crores) in the financial statements of the Company as of April 1, 2015:

Further, the investments held by the Company in IHMS LLC. (Rs.2002.03 crores) and LEPPL (Rs.10.00 crores) have been eliminated.

The difference between the consideration and the recorded investment as of the Appointed Dates i.e. Rs.7.12 crores has been transferred to Capital Reserve and shown separately in the Statement of Changes in Equity.

The effect of capital reduction has been given on the respective Appointed Dates. Consequently Rs.2020.36 crores has been reduced from the Security Premium Account at the respective Appointed Dates.

Note 4 : Contingent Liabilities (to the extent not provided for) and Contingent Assets:

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Companyâs businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

(a) on account of matters in dispute:

Amounts in respect of claims (excluding interest and penalties) asserted by various revenue authorities on the Company, in respect of taxes, etc, which are in dispute, are as under:

In respect of Income Tax matters, the Companyâs appeals are pending and the said amounts have been paid/ adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(b) on account of lease agreements:

In respect of a plot of land provided to the Company under a license agreement, on which the Company has constructed a hotel, the licensor has made a claim of Rs.344.50 crores to date, (13 times the previous annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim based upon legal advice, by filing a suit in the Honourable High Court of Judicature at Bombay on grounds of the licensorâs inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, within the terms of the existing license agreement as also a Supreme Court judgment on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot stretch more than Rs.86.36 crores (excluding interest / penalty), and this too is being contested by the Company on merit.

Further, a âNotice of Motionâ has been issued by the Honourable High Court of Judicature at Bombay, inter alia, for a stay against any further proceedings by the licensor, pending a resolution of this dispute by the Honourable Bombay High Court. In view of this, and based on legal advice, the Company regards the likelihood of sustainability of the lessorâs claim to be remote and the amount of any potential liability, if at all, is indeterminate.

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented

(d) Litigation in respect of a property:

(e) Claims filed by the company:

The Company has filed a claim for Government subsidy with the Department of Industrial Policy and Promotion for a new greenfield hotel project which has commenced operations. The claim is in the initial stage of verification and in the absence of reasonable certainity at this stage on the amount that may be ultimately approved. No deferred income has been recognised.

Note 5 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs.63.07 crores (March 31, 2016 - Rs.127.31 crores, April 1, 2015 - Rs.83.77 crores).

Note 6 : operating lease

The Company has taken certain vehicles, land and immovable properties on operating lease. The lease of hotel properties are generally long term in nature with varying terms and renewal rights expiring within five years to one hunderd & ninety eight years. On renewal, the terms of the leases are renegotiated. The total lease rent paid on the same is included under Rent and Licence Fees forming part of Other Expenses (Refer note no 26, Footnote (iv), Page 144).

The minimum future lease rentals payable in respect of non-cancellable leases entered into by the Company to the extent of minimum guarantee amount are as follows:-

Footnotes:

c) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

(a) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This included listed equity instruments, traded debentures and mutual funds that have quoted price. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/ debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in

level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

d) inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

e) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for the equity instruments

- the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves

- the fair value of non convertible debentures is valued using FIMMDA guidelines.

- the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date

- the fair value of the unlisted shares are determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

- the fair value of the remaining financial instruments is determined using the discounted cash flow analysis

f) Reconciliations of level 3 fair values

The following table shows reconciliation from the opening balances to closing balances for Level 3 fair values:

Note 7 : Financial risk management

Risk management framework

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The Committee reports regularly to the Board of Directors on its activities.

The Companyâs risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Companyâs Audit Committee oversees how management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by internal audit team. Internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

a) Credit risk

The Companyâs policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions.

The company has established a credit policy under which each new customer is analysed individually for creditworthiness before entering into contract. Sale limits are established for each customer, reviewed regularly and any sales exceeding those limits require approval from the appropriate authority. There are no significant concentrations of credit risk within the company.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Companyâs reputation.

i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at any time by the company. The bank loan facilities are available upto July 31, 2017 and will have a maturity of 18 months from drawdown (March 31, 2016 - the bank loan facilities were available upto May 31, 2016 and had a maturity of 18 months from drawdown).

ii) Maturities of financial liabilities

iii) Capital Risk Management

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt is calculated as total borrowings (including âcurrent and non-current term loansâ as shown in the balance sheet) less cash and cash equivalents.

c) Market risk

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency risk

The predominant currency of the Companyâs revenue and operating cash flows is Indian Rupees (INR). The Companyâs reported debt has an exposure to borrowings held in US dollars. Further, company has foreign currency exposure for its investments (equity and shareholderâs loan) in its international subsidiaries. Movements in foreign exchange rates can affect the Companyâs reported profit, net assets.

The Company uses interest rate swaps and currency swaps to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows:-

Sensitivity

For the year ended March 31, 2017 and March 31, 2016, every 3% depreciation in the exchange rate between the Indian rupee and US dollar, shall affect the companyâs profit before tax by approximately 14.90% and 16.75% respectively and every 3% increase in the interest rate shall affect the companyâs profit before tax by approximately 5.89% and (2.20)% respectively.

For the year ended March 31, 2017 and March 31, 2016, every 3% appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the companyâs profit before tax by approximately 4.01% and 22.48% respectively and every 3% decrease in the interest rate shall increase/(reduce) affect the companyâs profit before tax by approximately (5.00)% and 3.53% respectively.

Sensitivity

For the year ended March 31, 2017 and March 31, 2016, every 3% depreciation/appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the companyâs profit before tax by approximately 2.00% and 12.41% respectively.

ii) Interest rate risk

The total borrowing at variable rate was Rs.254.40 crores as at March 31, 2017 (March 31, 2016 - Rs.542.04 crores, April 1, 2015 - Rs.588.30 crores). The carrying value of the long term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Companyâs exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2017 would increase/ decrease by 6.35 % (for the year ended March 31, 2016: increase/ decrease by 6.44 %).

Note 8 : Employee Benefits

(a) The Company has recognised the following expenses as defined contribution plan under the head âCompanyâs Contribution to Provident Fund and Other Fundsâ(net of recoveries):

(b) The Company operates post retirement defined benefit plans as follows :-

a. Funded :

i. Post Retirement Gratuity

ii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded :

ii. Post Employment Medical Benefits to qualifying employees

(d) The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Note 9 : specified Bank notes disclosure:

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

Note 10 : other regulatory matters

Note 11 : Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Companyâs activities and consistent with the internal reporting provided to the chief operating decision maker and after considering the nature of its services, the ultimate customer availing those services and the methods used by its to provide those services, âHotel Servicesâ has been identified to be the Companyâs sole operating segment. Hotel Services include âRevenue from Operationsâ including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Companyâs management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2, Page 111 in the summary of significant accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

Footnote: Non-current assets exclude financial assets, deferred tax assets, post-employment benefit assets and rights under insurance contracts.

No single customer contributes more than 10% or more of the Companyâs total revenue for the years ended March 31, 2017 and March 31, 2016.

Note 12 : Earnings per Share (EPS):

Earnings Per Share is calculated in accordance with Ind AS 33 - âEarnings Per Shareâ.

Note 13 : Guarantees given

i) Guarantees/ Letters of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2017 - Rs.420.29 crores (March 31, 2016 - Rs.1,415.83 crores, April 1, 2015 - Rs.1,124.40 crores). Out of this, counter indemnity for Rs.122.31 crores (March 31, 2016 - Rs.131.11 crores, April 1, 2015 - Rs.Nil) has been obtained from a JV partner for his 50% share.

ii) The Company has given letters of support to select subsidiaries, a joint venture and an associate during the year.

Footnotes:

(i) These subsidiaries have been amalgamated with the Company during the year as per the respective court orders (Refer Note 29, Page 148).

(ii) The Company consolidated Lands End Properties Private Limited (âLEPPLâ) including its subsidiaries in which the Company held 19.90% stake on transition to Ind AS as it had exposure or had rights, to vari able returns from its involvement with this entity. Subsequently, the Company had acquired remaining 80.10% stake in LEPPL on October 14, 2015.

(iii) Apex Hotel Management Services (Pte) Ltd. is in the process of liquidation with effect from December 21, 2016.

(iv) Apex Hotel Management Services (Australia) Pty Ltd. has been sold on March 31, 2017.

(v) Chieftain Corporation NV filed for liquidation during the year and dissolved on April 13, 2017.

(vi) This subsidiary was created during the financial year ended March 31, 2016.

(vii) In May 2017, an application was filed with the appropriate local authority for liquidating Samsara Properties Ltd (SPL), an indirect WOS of the Company incorporated in the British Virgin Islands. SPL was a dormant intermediate holding company. The process of liquidation is expected to be completed within the next few months.

Note 14 : Going Concern assumption

At at the year end, the Companyâs current liabilities have exceeded its current assets by Rs.886.36 crores primarily on account of borrowings aggregating Rs.547.13 crores which fall due within 12 months following the balance sheet date and certain provisions although classified as âCurrentâ are unlikely to result in a cash outflow within that period. Management is confident of its ability to generate cash inflows from operations, liquidate certain non-current investments and raise cash from financing activities so that it would be able to meet its obligations on due dates as it has demonstrated in earlier years. On these considerations, these financial statements are prepared on a going concern basis

Note 15 : Dividends

Dividends paid during the year ended March 31, 2017 out of General Reserve was Rs.0.30 per equity share for the year ended March 31, 2016.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2017, retained earnings not tranferred to reaserves available for distribution was Rs.156.23 crores.

On May 26, 2017, the Board of Directors of the Company have proposed a final dividend of Rs.0.35 per equity share in respect of the year ended March 31, 2017, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs.41.67 crores, inclusive of dividend distribution tax of Rs.7.05 crores.

Mar 31, 2014

Note 1 : Corporate information

The Indian Hotels Company Limited ("IHCL" or the "Company"), is a listed public limited company incorporated in 1902. It is promoted by Tata Sons Ltd., which holds a significant stake in the Company. The Company is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

March 31, 2014 March 31, 2013 Rs. Crores Rs. Crores

Footnotes :

(i) provision for Contingencies include :

Opening Balance Addition / Closing Balance (Deletion) Rs.crores Rs.crores Rs.crores

Legal and Statutory matters 1.18 19.47 20.65

1.44 (0.26) 1.18

Contractual matters in the course of business 27.71 3.06 30.77

10.16 17.55 27.71

Employee related matters 1.23 - 1.23

1.23 - 1.23

Total 30.12 22.53 52.65

12.83 17.29 30.12

a) The above matters are under litigation / negotiation and the timing of the cash flows cannot be currently determined.

b) Figures in italics are in respect of previous year.

(a) on account of income Tax matters in dispute :

In respect of tax matters for which Company''s appeals are pending - Rs. 48.52 crores (Previous year - Rs. 60.12 crores).The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(c) In respect of a plot of land provided to the Company under a license agreement, on which the Company has constructed a hotel, the licensor has made a claim of Rs. 229.70 crores to date, (13 times the existing annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim, based upon legal advice, by filing a suit in the Honourable Bombay High Court on grounds of licensor''s inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, based on the existing license agreement as also a Supreme Court judgment on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot, under any stretch, be more than Rs. 48.56 crores (excluding interest / penalty), and this too is being contested by the Company on merit.

Further, a "Notice of Motion" has been issued by the Honourable Bombay High Court, inter alia, for a stay against any further proceedings by the licensor, pending a resolution of this dispute by the Honourable Bombay High Court. In view of this, and based on legal advice, the Company regards the likelihood of sustainability of the lessor''s claim to be remote and the amount of any potential liability, if at all, is indeterminate.

In some hotels, proposed revisions in property taxes are contested by the Company, amounts of which are indeterminate..

(d) Guarantees/Letter of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2014 - Rs. 972.00 crores (Previous year - Rs. 868.68 crores).

Note 2 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 125.92 crores (Previous year - Rs.173.75 crores).

Note 3 : other Commitments

(a) The Company owns 19.90% of the issued share capital of Lands End Properties Private Limited (LEPPL), a Company owning 67% interest in the erstwhile Sea Rock hotel property through its wholly-owned subsidiary, Sky Deck Properties & Developers Private Limited (SDPDPL). LEPPL has issued Zero coupon Non-Convertible Debentures aggregating to Rs. 521 crores, redeemable at a premium, having a yield to maturity of 10% per annum. LEPPL has a call option on this borrowing, and thus the right to early redemption of such Debentures on February 13, 2015 with an additional redemption premium of 0.15% of nominal value (principal value). In the event, this option of early redemption is not exercised by LEPPL, the obligation of LEPPL on such Debentures, on its maturity, would aggregate to Rs. 693.45 crores. However, the call option can only be exercised with prior written consent from the Company.

In respect of such debentures issued by LEPPL, the Company has:-

i. the first right to purchase the entire shareholding of SDPDPL held by LEPPL for an aggregate value of Rs. 693.45 crores; or

ii. the obligation to make good the value of the shortfall, if any, if lenders of LEPPL divest 100% of SDPDPL shares and realise an amount lower than the redemption amount, in case the right referred in (i) above is not exercised.

In addition, SDPDPL has availed of a secured zero coupon term loan of Rs. 508 crores from a financial institution for which the total repayment obligation on the maturity date (being January 28, 2016) would be Rs. 708.93 crores. This term loan has been secured by way of a pledge on all direct and indirect shareholding of ELEL.

In effect, the total future repayment obligation for LEPPL, on a consolidated basis, aggregates to Rs. 1402.38 crores covering the current outstanding debt obligations of LEPPL and SDPDPL, its underlying subsidiary.

(b) The Company had given an option to certain shareholders of ELEL Hotels & Investment Ltd. (ELEL), a company having an underlying lease of the Hotel Sea Rock Property as under:-

Shareholders holding 5,26,854 shares in ELEL would have had an option to sell these shares to the Company upon the achievement and fulfilment of certain conditions. The intent states that the option would have been exercisable by the shareholders at a predetermined price, based on the obligations actually fulfilled by the holders of these shares. The holders of these shares are entitled to exercise this Put option on January 1, 2014 (not exercised) or July 1, 2014. In parallel, the Company also has an option to purchase these shares at the same price on April 1, 2014 (not exercised) or September 1, 2014.

Given the non-fulfilment of conditions as at date as well as the uncertainty in achieving these conditions going forward, the resolution of this Put/ Call option with respect to timing, price and resultant liability remains indeterminate.

(c) The Company has given letters of support in case of select subsidiaries and associate companies during the year.

Note 4 : foreign Currency Monetary item Translation difference account

The Company has exercised the option granted vide notification No. G.S.R.225(E) dated March 31, 2009, issued by the Ministry of Corporate Affairs and subsequent Notification No G.S.R.378(E) (F.No17/133/2008-CLV) dated May 11, 2011 and Amendment Notification No G.S.R.914(E) dated December 29, 2011 incorporating the new paragraph 46(A) relating to Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates" and accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended March 31, 2014 have been accumulated in "Foreign Currency Monetary Item Translation Difference" and amortised over the balance period of such long term asset or liability, by recognition as income or expense in each of such periods. Foreign currency monetary items outstanding as at March 31, 2014 are accounted as per Company''s Policy on Transactions in Foreign Exchange (Refer Note 2(f), page 68).

Note 5 : employee Benefits

(b) The Company operates post retirement defined benefit plans as follows : - i. funded :

- Post Retirement Gratuity.

- P ension to Employees Â Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

ii. Unfunded :

- P ension to Executive Directors and Employees Â Post retirement minimum guaranteed pension scheme for certain retired executive directors and certain categories of employees, which is unfunded.

- Post Employment Medical Benefits to qualifying employees

- Post Employment Compensated Absence Benefit for certain categories of employees.

(c) pension scheme for employees :

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising on the above, after allowing for employees'' contribution is determined as at the year end, on the basis of uniform accrual benefit, with demographic assumptions taken as Nil.

Note 6 :

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company has replied to the notices and is waiting for the directorate to return its files, after which it will complete the replies. Adjudication proceedings are in progress.

Note 7 :

Deposits and Advances in the nature of loans to Subsidiaries, Jointly Controlled Entities and Associates : -

Note 8 :

The Company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ''Segmental Information'' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

Note 9 :

In compliance with Accounting Standard 27 - ''Financial Reporting of Interests in Joint Ventures'' - (AS-27), notifed by the Companies (Accounting Standards) Rules, 2006 (as amended), the Company has interests directly or through its Subsidiaries in the following jointly controlled enttes:

Note 10:

The Company has regrouped / reclassified the previous year figures to conform to the current year''s presentation.

Mar 31, 2013

Note 1 : Corporate Information

The Indian Hotels Company Limited ("IHCL" or the "Company"), is a listed public limited company incorporated in 1902. It is promoted by Tata Sons Ltd., which holds a significant stake in the Company. The Company is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

Note 2 : Contingent Liabilities (to the extent not provided for):

(a) On account of Income Tax matters in dispute :

In respect of tax matters for which Company''s appeals are pending - Rs. 60.12 crores (Previous year - Rs. 27.34 crores). The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(b) On account of other disputes in respect of:

Particulars March 31, 2013 March 31, 2012 Rs. crores Rs. crores

Entertainment tax 0.03 0.53

Sales tax / VAT 7.70 7.37

Property tax 10.98 8.60

Stamp Duty 0.60 0.60

Service Tax 7.35 7.03

Others 1.96 1.83

The Company is a defendant in various legal actions and a party to claims which arose during the ordinary course of business. The Company''s management believes based on the facts presently known, that the results of these actions will not have a material impact on the Company''s financial statements.

(c) In a hotel on land under license agreement, there is a demand for increased lease rentals with effect from 2006-07 amounting to Rs. 194.85 crores (Previous year Rs. 161.26 crores) plus interest thereon. The Company has disputed this enhanced lease rental and filed a suit in the High Court and taken out a Notice of Motion, inter alia, for a stay against any further proceedings by the licensor pending resolution of dispute by the Court. The Company has been legally advised that the demand is not sustainable as it is not in accordance with the judgment of the Hon''ble Supreme Court. The Company does not expect any additional liability in this regard.

In some hotels, proposed revisions in property taxes are contested by the Company, amounts of which are indeterminate.

(d) Guarantees / Letter of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2013 - Rs. 868.68 crores (Previous year - Rs. 670.05 crores).

Note 3 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 173.75 crores (Previous year - Rs. 89.73 crores).

Note 4 : Other Commitments

(a) The Company owns 19.90% of the issued share capital of Lands End Properties Private Limited (LEPPL), a Company owning 67% interest in the Hotel Sea Rock Property through its wholly-owned subsidiary, Sky Deck Properties & Developers Private Limited (SDPDPL). During the year, LEPPL has refinanced loan of Rs. 400 crores and accrued premium by raising a fresh debt of Rs. 521 crores through issuance of Zero coupon Non-Convertible Debentures, redeemable at a premium having a yield to maturity of 10%. LEPPL has a call option on this borrowing to redeem such Debentures on February 13, 2014 or February 13, 2015 with an additional redemption premium of 0.5% and 0.15% of nominal value respectively. However, the call option can only be exercised with prior written consent from the Company. In respect of such debentures issued by LEPPL, the Company has : -

i. the first right to purchase the entire shareholding of SDPDPL held by LEPPL for an aggregate value of Rs. 693.45 crores; or

ii. the obligation to make good the value of the shortfall if lenders of LEPPL realise an amount lower than the redemption amount, on sale of the shares of SDPDPL in case the right referred in (i) above is not exercised.

(b) The Company had given an option to certain shareholders of ELEL Hotels & Investment Ltd. (ELEL), a company having an underlying lease of the Hotel Sea Rock Property as under: -

i. Shareholders holding 5,26,854 shares in ELEL would have had an option to sell these shares to the Company upon the achievement and fulfilment of certain conditions. The intent states that the option would have been exercisable by the shareholders at a predetermined price, based on the obligations actually fulfilled by the holders of these shares. The holders of these shares are entitled to exercise this Put option on July 1, 2013 or January 1, 2014 or July 1, 2014. In parallel, the Company also has an option to purchase these shares at the same price on September 1, 2013 or April 1, 2014 or September 1, 2014.

ii. Given the non-fulfilment of conditions as at date as well as the uncertainty in achieving these conditions going forward, the resolution of this Put/Call option with respect to timing, price and resultant liability remains indeterminate.

(c) The Company has given letters of support in case of select subsidiaries and associate companies during the year.

Note 5 : Operating Lease

The Company has taken certain vehicles, flats and immovable properties on operating lease. The total lease rent paid on the same is included under Rent and Licence Fees forming part of Other Expenses.(Refer Note 28 (ii). Page 86). The minimum future lease rentals payable in respect of non-cancellable leases entered into after April 1,2001 to the extent of minimum guarantee amount are as follows: -

Note 6: Derivative Instruments and Unhedged Foreign Currency Exposure:

The Company uses forward exchange contracts, interest rate swaps, currency swaps and options to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows : -

Note 7 : Foreign Currency Monetary Item Translation Difference Account

The Company has exercised the option granted vide notification No. G.S.R.225(E) dated March 31, 2009, issued by the Ministry of Corporate Affairs and subsequent Notification No G.S.R.378(E) (F.No17/133/2008-CL.V) dated May 11,2011 and Amendment Notification No G.S.R.914(E) dated December 29, 2011 incorporating the new paragraph 46(A) relating to Accounting Standard (AS-11) ''The Effects of Changes in Foreign Exchange Rates'' and accordingly, the exchange differences arising on revaluation of long-term foreign currency monetary items for the year ended March 31, 2013 have been accumulated in "Foreign Currency Monetary Item Translation Difference" and amortised over the balance period of such long-term asset or liability, by recognition as income or expense in each of such periods. Foreign currency monetary items outstanding as at March 31, 2013 are accounted as per Company''s Policy on Transactions in Foreign Exchange (Refer Note 2(f), Page 65).

Note 8 : Remittance in Foreign Currencies for dividend to non-resident shareholders

The Company has not remitted any amount in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividend have been made by / on behalf of non-resident shareholders. The particulars of dividend paid to non-resident shareholders during the year, are as under:

Note 9 :

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company has replied to the notices and is waiting for the directorate to return its files, after which it will complete the replies. Adjudication proceedings are in progress.

Note 10:

Deposits and Advances in the nature of loans to Subsidiaries, Jointly Controlled Entities and Associates: -

Note 11:

The Company''s only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ''Segmental Information'' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

Note 12:

The Company has regrouped / reclassified the previous year figures to conform to the current year''s presentation.

Mar 31, 2012

Note 1 : Corporate Information

The Indian Hotels Company Limited ("IHCL" or the "Company"), is a listed public limited company incorporated in 1902. It is promoted by Tata Sons Ltd., which holds a significant stake in the Company. The Company is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

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

During the year ended March 31,2012, the amount of per share dividend recognised as distribution to equity shareholder was Rs 1/- (Previous year Rs 1/-).

(ii) The Company had allotted on preferential basis to Tata Sons Ltd, the Promoter, following securities on December 23, 2010 :

(a) 3,60,00,000 Ordinary Shares of the face value of Rs 1/- each at a premium of Rs 102.64 per share aggregating Rs 373.10 crores.

(b) 4,80,00,000 Warrants with an option to subscribe to one Ordinary Share of the face value ofRs 1/- each at a premium of f 102.64 per share for every warrant held. The option shall be exercisable after April 1, 2011, but not later than 18 months from the date of issue of the Warrants i.e June 23, 2012. Accordingly, the Company has received Rs 124.37 crores, as 25% advance against the warrants from the Promoter. In the event the warrants are not converted into shares within the said period, the Company is eligible to forfeit the amounts received towards the warrants.

(iii) 16,504 Ordinary Shares have been issued but not subscribed to as at the end of the respective years and have been kept in abeyance pending resolution of legal dispute.

Footnote :

With effect from April 1, 2011, the Company has adopted hedge accounting principles to account for hedging of loans extended to subsidiaries forming a part of the Company's net investment in non-integral foreign operations. Effectively, the Company had partially converted its rupee borrowings into foreign currency borrowings, using cross-currency swap derivative instruments, so as to cover the foreign currency fluctuations of its investments in overseas subsidiaries and the foreign currency borrowings. On application of the hedge accounting policy, the foreign currency translation differences of both, the hedging instrument (i.e. the borrowings) and the hedged item (i.e. the net investment in non-integral foreign operation), are recognised under Reserves and Surplus having due consideration to hedge effectiveness. Accordingly, the translation difference on the borrowings amounting to Rs 118.22 crores for year ended March 31, 2012, forming the effective portion of the hedge has been recognised in the Hedge Reserve Account in the Balance Sheet, whilst the corresponding translation differences of the net investment in non- integral foreign operation of Rs 183.05 crores for the year ended March 31, 2012, has been recognised under "Foreign Currency Translation Reserve Account" in the Balance Sheet. Had the Company chosen to amortise the foreign currency translation differences over the balance maturity period of such loans, the charge to the Statement of Profit and Loss for the year ended March 31, 2012, would have been higher by Rs 14.01 crores.

(ii) Secured Debentures indudes:

a) 3,000, 10.10% Secured Non-Convertible Debentures of Rs 10 lakhs each aggregating Rs 300 crores, are allotted on November 18, 2011 and repayable at par at the end of 10th year from the date of allotment i.e November 18, 2021.

b) 2,500, 9.95% Secured Non-Convertible Debentures of Rs 10 lakhs each aggregating Rs 250 crores, are allotted on July 27, 2011 and repayable at par at the end of 10th year from the date of allotment i.e July 27, 2021. The Company has entered into currency swap transactions with a view to convert these debentures into foreign currency borrowing, to hedge its foreign currency assets. Accordingly, the underlying borrowings are translated at the exchange rate prevailing at the Balance Sheet date.

c) 3,000, 2% Secured Non-Convertible Debentures of Rs 10 lakhs each aggregating Rs 300 crores, are allotted on March 22, 2010 and repayable in 3 annual instalments commencing at the end of 5th, 6th & 7th year from the date of allotment along with redemption premium of Rs 6.13 lakhs per debenture in the ratio of 20:30:50 so as to give a YTM of 9.5%. The Company has entered into currency swap transactions on Rs 200 crores with a view to convert these debentures into foreign currency borrowing, to hedge its foreign currency assets. Accordingly, the underlying borrowings to the extent of Rs 200 crores are translated at the exchange rate prevailing at the Balance Sheet date.

d) 3,000,11.80% Secured Non-Convertible Debentures ofRs 10 lakhs each aggregatingRs 300 crores, allotted on December 18, 2008 and repayable in 3 annual instalments in the ratio of 50:30:20 at the end of the 3rd year from the date of allotment. During the year, the Company has repaid the first instalment which was due on December 18, 2011, of Rs 150 crores.

e) 2,500, 9.50% Secured Non-Convertible Debentures of Rs 10 lakhs each aggregating Rs 250 crores, allotted on February 27, 2007, and repayable at the end of 5th year from the date of allotment. These debentures were fully redeemed by the Company during the year on its due date.

f) 6,02,76,898, 6% Secured Non-Convertible Debentures of Rs 100 each aggregating Rs 602.77 crores, allotted on May 13, 2008, for the period of 3 years which were repaid by the Company on May 13, 2011.

All the Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge created on all the fixed assets of the Company, both present and future.

(iii) Unsecured Debentures includes:

a) 2,500, 2% Unsecured Non-Convertible Debentures of Rs 10 lakhs each, allotted on December 9, 2009, aggregating Rs 250 crores and repayable at the end of the 10th year, along with redemption premium of Rs 12.43 lakhs per debenture. The Company has entered into currency swap transactions with a view to convert these debentures into foreign currency borrowing, to hedge its foreign currency assets. Accordingly, the underlying borrowings are translated at the exchange rate prevailing at the Balance Sheet date.

b) 1,360,9.90% Unsecured Non-Convertible Debentures of Rs 10 lakhs each, allotted on February 24, 2012, aggregating Rs 136 crores and repayable at the end of the 5th year.

c) 1,500 2% Unsecured Non-Convertible Debentures of Rs 10 lakhs each, allotted on December 9, 2009, aggregating Rs 150 crores and repayable at the end of the 5th year, along with redemption premium of Rs 4.37 lakhs per debenture. The Company has entered into currency swap transactions with a view to convert these debentures into foreign currency borrowing, to hedge its foreign currency assets. Accordingly, the underlying borrowings are translated at the exchange rate prevailing at the Balance Sheet date.

(iv) The Company has taken interest bearing external commercial borrowing of US $ 95 million on November 23, 2011. The loan is repayable at the end of 50th, 60th, & 72nd month from November 23, 2011, in equal instalments to achieve the average maturity of 5.05 years.

(v) The Company has taken interest bearing external commercial borrowing of US $ 30 million on April 25, 2007. The loan is repayable at the end of 5th year from the date of borrowing.

(vi) The Company has taken Fixed Deposits from Public as well as Shareholders carrying interest @ 9.50% and 10% for 2 and 3 years respectively, with an additional interest @ 0.25% p.a. for senior citizens, shareholders and employees. The interests on these deposits are being paid on half-yearly basis and on maturity. Deposits from Shareholders includes deposit from a Director - Rs 0.60 crore.

(iii) The Company has investments and exposure aggregating Rs 1,462.85 crores (Previous year Rs 1,280.42 crores) in entities in which there has been a significant erosion of net-worth or decline in market value. While there exists a degree of uncertainty as to the final outcome, the Company regards the diminution to be temporary in nature considering the Company's strategic and long-term commitment to these investments and having regard to the factors given below:

a) The Company, through its wholly-owned subsidiaries, holds shares costing Rs 1,339.45 crores (US $ 262 million) (Previous year Rs 1,169.00 crores (US $ 262 million) in Orient-Express Hotels Ltd., ("Orient-Express") an entity whose shares are listed on the New York Stock Exchange. However the market value of these shares as at the Balance Sheet date has declined by Rs 960.00 crores (US $ 188 million) (previous year Rs 775.00 crores (US $ 174 million). There has been a noticeable improvement in the performance of Orient-Express and consequently, the Company expects improvement in the value of this investment in the future.

b) BJets Pte. Ltd., Singapore ("BJets''), in whose equity the Company has invested Rs 102.59 crores (Previous year Rs 102.59 crores) and given long-term advances through its wholly owned subsidiary of Rs 12.79 crores (Previous Year Rs Nil ), has a negative net worth as at March 31, 2012 (based on its unaudited financial statements). The Company is informed that BJets has entered into an alliance for marketing and maintenance of its aircraft as well as operational support with a local strategic partner as a part of its turnaround strategy and expects the performance of BJets to improve in the future.

c) The Company and its subsidiary have invested 10.50 crore (Previous year Rs 0.50 crore) and long-term advances with accrued interest aggregating Rs 7.52 crores (previous year Rs 8.33 crores), in Taj Karnataka Hotels and Resorts Ltd. ("Taj Karnataka"), an entity jointly controlled with the Government of Karnataka. Taj Karnataka's accumulated losses exceed its paid up capital and reserves. The Company is in discussion for a financial restructuring of the jointly controlled entity and is hopeful of a turnaround with its proposed initiatives.

(iv) Transfer of shares are restricted due to option granted for 10 years upto July, 2021 to Tata Realty and Infrastructure Ltd. for repurchase of the shares at par value. Tata Realty and Infrastructure Ltd. has deposited a sum of f 71.10 crores as Option Deposit, which shall be adjusted upon exercise of the option or refunded.

Note 2 : Contingent Liabilities (to the extent not provided for):

(a) On account of Income Tax matters in dispute :

In respect of tax matters for which Company's appeals are pending - Rs 27.34 crores (Previous year - Rs 14.25 crores). The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(c) In a hotel on land under license agreement, there is a demand for increased rentals with effect from 2006-07 amounting to Rs 161.26 crores (Previous year Rs 129.55 crores) plus interest thereon. The Company has been legally advised that the demand is not sustainable as it is not in accordance with principles / guidelines laid down by the Honourable Supreme Court. The Company has contested the claim and does not expect any additional liability in this regard. In another hotel under licence agreement, the authorities have sought to revise licence fees with effect from 1986-87 amounting to Rs 25.95 crores (Previous year 124.24 crores) plus interest thereon due to a difference in interpretation. The Company has contested the same, but provided for a sum of Rs 10.00 crores and no additional liability is anticipated. In some hotels, proposed revisions in property taxes are contested by the Company, amounts of which are indeterminate.

(d) Guarantees given by the Company in respect of loans obtained by other Companies and outstanding as on March 31, 2012 - Rs 670.05 crores (Previous year - Rs 498.20 crores).

Note 3 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs 89.73 crores (Previous year - Rs 110.41 crores).

Note 4 : Other Commitments

(a) The Company owns 19.90% of the issued share capital of Lands End Properties Private Limited (LEPPL), a Company owning 67% interest in the Hotel Sea Rock Property through its wholly-owned subsidiary. Sky Deck Properties & Developers Private Limited (SDPDPL). LEPPL has raised a debt of Rs 400 crores by issuance of zero coupon Non-Convertible Debentures, redeemable at a premium. In respect of the debentures issued by LEPPL, the Company has

i. the first right to purchase the entire shareholding of SDPDPL held by LEPPL for an aggregate value of Rs 525.65 crores; or

ii. the obligation to make good the value of the shortfall if the lenders of LEPPL realise an amount lower than the Redemption Amount on sale of the shares of SDPDPL in case the right referred in (i) above is not exercised.

(b) The Company has given an option to certain shareholders of ELEL Hotels & Investment Ltd., a company having an underlying lease of the Hotel Sea Rock Property as under:-

i. Shareholders holding 3,98,090 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares on January 1, 2011 or July 1, 2011 or January 1, 2012 or July 1, 2012. Since the shareholders are yet to fulfil their obligations, the option has not been exercised.

ii. Shareholders holding 5,36,339 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares at an agreed fixed return, payable from June 25, 2009 at a price so determined. The shareholders can exercise the option on January 1, 2013 or July 1, 2013 or January 1, 2014 or July 1, 2014. The Company also has an option to purchase these shares at the same price on April 1, 2013 or September 1, 2013 or April 1, 2014 or September 1, 2014.

Note 5 : Foreign Currency Monetary Item Translation Difference Account

The Company has exercised the option granted vide notification No. G.S.R.225(E) dated March 31, 2009, issued by the Ministry of Corporate Affairs and subsequent Notification No G.S.R.378(E) (F.No17/133/2008-CL.V) dated May 11, 2011 and Amendment Notification No G.S.R.914(E) dated December 29, 2011 incorporating the new paragraph 46(A) relating ! to Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates" and accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended March 31, 2012 have been accumulated in "Unamortised Foreign Currency Monetary Item Translation Difference" and amortised over the ; balance period of such long term asset or liability, by recognition as income or expense in each of such periods. Foreign currency monetary items outstanding as at March 31, 2012 are accounted as per Company's Policy on Transactions in | Foreign Exchange (Refer Note 2(f), Page 63).

(b) The Company operates post retirement defined benefit plans as follows

i Funded:

- Post Retirement Gratuity

- Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

ii Unfunded:

- Pension to Executive Directors and Employees - Post retirement minimum guaranteed pension scheme for certain retired executive directors and certain categories of employees, which is unfunded.

- Post Employment Medical Benefits to qualifying employees

(c) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising on the above, after allowing for employees' contribution is determined as at the year end, on the basis of uniform accrual benefit, with demographic assumptions taken as Nil.

Note 6:

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company has replied to the notices and is waiting for the directorate to return its files, after which it will complete the replies. Adjudication proceedings are in progress.

Note 7:

The Company's only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - 'Segmental Information' (AS-17) notified by the Companies (Accounting Standards) Rules, 2006 (as amended). There is no geographical segment to be reported since all the operations are undertaken in India.

Note 8:

During the year ended March 31, 2012 the Revised Schedule VI notified under the Companies Act 1956, has become applicable for preparation and presentation of financial statements. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The Company has regrouped / reclassified the previous year figures in accordance with the requirements applicable in the current year.

Mar 31, 2011

1. The Taj Mahal Palace in Mumbai was attacked by terrorist on November 26, 2008 amongst other targets in the city, due to which the heritage wing of the property was severely damaged. The entire hotel has since been restored back and is fully operational. The cost of reinstatement of damage will be recovered from the insurance company, subject to the adjustment on account of expected deductions from claim amounts. The fixed assets / facilities that have been put to use are capitalised at its carrying value on the date of the loss, increased for the expected deductions from claim amounts. The Company is also insured for Loss of profits to cover the period of interruption for up to 12 months from the date of incident against which it has recognised an amount of Rs. Nil (Previous Year Rs. 64.35 crores) towards loss of profi t due to business interruption on an estimated basis. The Company is in an advanced stage of finalisation of the claim with the insurers and has so far received Rs. 200 crores as advance payment towards claim settlement including Rs. 20 crores received during the current financial year.

2. Preferential Allotment

The Company has allotted on preferential basis to Tata Sons Ltd, the Promoter, following securities on December 23, 2010:

3,60,00,000 Ordinary Shares of the face value ofRs. 1/- each at a premium ofRs. 102.64 per share aggregating Rs. 373.10 crores.

4,80,00,000 Warrants with an option to subscribe to one Ordinary Share of the face value of Rs. 1/- each at a premium ofRs. 102.64 per share for every warrant held. The option shall be exercisable after April 1, 2011, but not later than 18 months from the date of issue of the Warrants i.e June 23, 2012. Accordingly, the Company has received Rs. 124.37 crores, as 25% advance against the warrants from the Promoter.

Consequently, the Share Capital of the Company increased from Rs. 72.35 crores to Rs. 75.95 crores on allotment of 3,60,00,000 Ordinary Shares.

As at March 31, 2011, Rs. 497.47 crores raised through the above issues, were temporarily parked as Deposits with Banks and in Units of Mutual Funds. These funds subsequent to the Balance Sheet date, i.e. on May 12, 2011 have been fully utilised for redemption of 6% Secured Non-Convertible Debentures.

3. The Company has entered into currency swap transactions with a view to convert its rupee borrowings into foreign currency borrowing, to hedge its foreign currency assets. Accordingly, the underlying borrowings are translated at the exchange rate prevailing at the Balance Sheet date.

4. Shareholder's Deposits placed with a subsidiary company include Rs. 273.99 crores (equivalent to USD 61.363 million) (previous yearRs. 276.99 crores, equivalent to USD 61.363 million) placed in earlier years, with the Company retaining the right to convert the said deposits into equity by December 31, 2012, as per the permission received from the Reserve Bank of India.

5. (a) The Company has given an undertaking to The Hongkong & Shanghai Banking Corporation in respect of borrowing by IHMS (Australia) Pty Limited, a wholly-owned subsidiary, for Australian Dollars 1.00 million (previous year Australian Dollar 1.00 million), that it will not dilute its shareholding in the subsidiary.

(b) Samsara Properties Limited, a wholly-owned subsidiary of the Company has taken a loan from ICICI Bank for US$ 177 million. The Bank has an option to sell / transfer the loan to the Company on the occurrence of an event of default under the loan agreement.

(c) The Company owns 19.90% of the issued share capital of Lands End Properties Private Limited (LEPPL), a company owning 67% interest in the Hotel Sea Rock Property through its wholly-owned subsidiary, Sky Deck Properties & Developers Private Limited (SDPDPL). LEPPL has raised a debt of Rs. 400 crores by issuance of zero coupon Non-Convertible Debentures, redeemable at a premium. In respect of the debentures issued by LEPPL, the Company has :-

i. the first right to purchase the entire shareholding of SDPDPL held by LEPPL for an aggregate value of Rs. 525.65 crores; or

ii. the obligation to make good the value of the shortfall if the lenders of LEPPL realise an amount lower than the Redemption Amount on sale of the shares of SDPDPL in case the right referred in (i) above is not exercised.

(d) The Company has given an option to certain shareholders of ELEL Hotels & Investment Ltd., a company having an underlying lease of the Hotel Sea Rock Property as under:-

i. Shareholders holding 3,98,090 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares on January 1, 2011 or July 1, 2011 or January 1, 2012 or July 1, 2012. Since the shareholders are yet to fulfil their obligations, the option has not been exercised.

ii. Shareholders holding 5,36,339 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares at an agreed fixed return, payable from June 25, 2009 at a price so determined. The shareholders can exercise the option on January 1, 2013 or July 1, 2013 or January 1, 2014 or July 1, 2014. The Company also has an option to purchase these shares at the same price on April 1, 2013 or September 1, 2013 or April 1, 2014 or September 1, 2014.

6. Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 110.41 crores (previous year - Rs. 234.64 crores).

(b) Purchase of Food and Beverages is net of proceeds from sale of empties etc. - Rs. 0.92 crore (previous year - Rs. 0.76 crore).

(c) Dividend Income includes dividend from subsidiary companies - Rs. 2.01 crores (previous year - Rs. 3.35 crores).

(d) Dividend Income includes income on long term trade investments (including dividend from Subsidiary Companies referred in note (c) above) - Rs. 17.29 crores (previous year - Rs. 23.75 crores) and on current investments - Rs. 12.60 crores (previous year - Rs. 13.08 crores).

(e) Exchange gain includes gain on currency swap - Rs. 13.21 crores (previous year - gain of Rs. 6.25 crores included in Exchange Gain) and loss on foreign exchange transactions - Rs. 1.53 crores (previous year - loss of Rs.2.92 crores).

(f) Other expenses include Bad Debts written off - Rs. 1.35 crores (previous year - Rs. 4.73 crores) and contribution to Electoral Trust Rs. Nil (previous year - Rs. 1 crore) (The Objects of the Trust inter alia, include holding by the Trustees of "Distribution Funds" for distribution to political parties).

7. Exceptional Items amounting to Rs. 17.14 crores comprise of profit on sale of a Hotel Property - Rs. 4.29 crores, expenditure on a discontinued project charged off for commercial reasons - Rs. 5.20 crores and provision for diminution in the value of Investment in a Subsidiary - Rs. 16.23 crores. In respect of previous year, Exceptional Items ofRs. 47.91 crores includes a non- recurring profit on sale of investments - Rs. 39.16 crores, profit on exit from a development project - Rs. 6.83 crores and refund of annuity pension premium Rs. 1.92 crores.

8. Contingent Liabilities:

(a) On account of Income Tax matters in dispute :

i. In respect of matters which have been decided in the Company's favour by the Appellate Authorities, where the Income Tax Department has preferred an appeal - Rs. 16.28 crores (previous year - Rs. 13.03 crores).

ii. In respect of other matters for which Company's appeals are pending - Rs. 14.25 crores (previous year - Rs. 1.83 crores).

The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(b) On account of other disputes in respect of :-

i. Luxury tax - Rs. 0.17 crore (previous year - Rs. 0.32 crore).

ii. Entertainment tax - Rs. 0.53 crore (previous year - Rs. 0.53 crore).

iii. Sales tax - Rs. 7.02 crores (previous year - Rs. 6.63 crores).

iv Property tax - Rs. 9.24 crores (previous year - Rs. 7.40 crores).

v. Stamp Duty - Rs. 2.34 crores (previous year - Rs. 2.34 crores).

vi. Others - Rs. 12.36 crores (previous year - Rs. 7.74 crores).

(c) Other claims against the Company not acknowledged as debt :

Rs. crores

Particulars Current Year Previous Year

Tax matters 1.12 1.12

Contractual matters in the course of business 24.24 21.64

Real Estate disputes and demands 130.17 99.07

Employee related matters 0.96 0.64

Total 156.49 122.47

Provision for Contingent Claims made in the books - Rs. 7.08 crores (previous year - Rs. 1.76 crores).

(d) Guarantees given by the Company in respect of deposits received and loans obtained by other companies and outstanding as on March 31, 2011 - Rs. 498.20 crores (previous year - Rs. 392.41 crores).

(e) In respect of a subsidiary, arbitration proceedings initiated to resolve a long standing dispute with the Airport Authority of India (AAI) for granting access through the subsidiary's land at Mumbai have been concluded in favour of the Company. As a result, the claim made by AAI on the Company amounting to Rs. 10.22 crores stands withdrawn. The revised claim pursuant to the award given by the arbitrator is awaited from the AAI. The Company does not expect any liability for the past period and should there be any liability crystallising on the subsidiary for any reason, the same is indemnifiable by the Company.

9. The Company had exercised the option granted vide notification F.No.17/33/2008/CL-V dated March 31, 2009, issued by the Ministry of Corporate Affairs and, accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended March 31, 2010 have been recognised over the shorter of the maturity period or March 31, 2011. The unamortised balances as at the year end are presented as "Foreign Currency Monetary Item Translation Difference Account" Foreign currency monetary items outstanding as at March 31, 2011 are accounted as per Company's Policy on Transaction in Foreign Exchange (Refer Note 1(f), page 83).

(b) The Company operates post retirement defined benefit plans as follows :-

i. Funded :

- Post Retirement Gratuity

- Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

ii. Unfunded :

- Pension to Executive Directors and Employees - Post retirement minimum guaranteed pension scheme for certain retired executive directors and certain categories of employees, which is unfunded.

(f) Provident Fund

In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the Companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as defined Benefit Plans, since the Company is obligated to meet interest shortfall, if any, with respect to covered employees. According to the Management, the Actuary has opined that actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absence of guidance from the Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the aforesaid AS 15 read with the Accounting Standards Board Guidance. However, having regard to the position of the Fund (for covered employees) and confi rmation from the Trustees of such Fund, there is no shortfall as at the year-end.

The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors. The above information has been Certified by the actuary and has been relied upon by the Auditors.

10. As the turnover of the Company includes sale of food and beverages, it is not possible to give quantitative details of the turnover and food & beverages consumed. The Company has been exempted from giving these particulars vide order no. 46/20/2008-CL-III dated May 23, 2008, issued by the Department of Company Affairs. The Ministry has also granted an exemption under General notification (No S. O. 301(E) dated February 8, 2011).

11. Remittance in Foreign Currencies for dividend to non-resident shareholders:

The Company has not remitted any amount in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividend have been made by/on behalf of non-resident shareholders. The particulars of dividend paid to non-resident shareholders during the year, are as under:

12. The Company has an investment ofRs. 0.50 crore (previous year - Rs. 0.50 crore) and advances outstanding (including interest) of Rs. 8.33 crores (previous year - Rs. 8.76 crores) in a Joint Venture, Taj Karnataka Hotels and Resorts Limited (TKHRL). TKHRL has accumulated losses in excess of its paid-up capital and reserves. Considering the inherent value of TKHRL's assets, based on a valuation of the property and its proposed financial restructuring, for which the Company is in talks with the JV partner - the Government of Karnataka, the Management is of the view that there is no diminution, other than temporary, in the value of the investment and that the amount outstanding after the financial restructuring will be fully recovered.

13. The Company has an investment ofRs. 102.50 crores (previous year - Rs. 102.50 crores) in BJETS Pte. Ltd., and has provided advance of Rs. 2.75 crores (previous year - Nil). BJETS has incurred losses over the years and its net worth as on December 31, 2010 is Rs. 30.36 crores, based on Management accounts. During the year, BJETS has tied up with a renowned company in the aviation sector for operational support, maintenance and marketing of BJETS aircraft. In view of the business restructuring and new alliance, the Management is of the view that there is no diminution other than temporary in the value of its investment and that the advance outstanding will be fully recovered.

14. In respect of an investment of Rs.1,169 crores (USD 262 million); previous year Rs. 1,182 crores (USD 262 million) made by a wholly-owned subsidiary of the Company in Orient-Express Hotels Ltd., a company listed on the New York Stock Exchange, the market value of this investment as on the Balance Sheet date is Rs. 394 crores (USD 88 million); previous year Rs. 441 crores (USD 99 million), representing a diminution in the value of the investment in the company amounting to Rs. 795 crores (USD 174 million); previous year Rs. 741 crores (USD 163 million). In view of the strategic nature of the investment and the Company's long-term commitment and on a consideration of the valuation report of an independent valuer and other long-term strategies of the Company, in the opinion of the Management, there is no diminution, other than temporary in the value of the aforesaid investment.

15. The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company has replied to the notices and is waiting for the directorate to return its files, after which it will complete the replies. Adjudication proceedings are in progress.

16. Previous year's figures have been regrouped, wherever necessary, to confirm to the current year's presentation.

Mar 31, 2010

1. Rights Issue of Simultaneous but unlinked issue of Ordinary Shares and Non-Convertible Debentures with Detachable Warrants to the ordinary shareholders of the Company

(a) Under the terms of the simultaneous but unlinked Rights Issue of Ordinary Shares of Rs.70/- each and 6% Non Convertible Debentures with detachable Warrants aggregating Rs.1,446.65 crores, completed on April 24, 2008, the Warrant holders were entitled to apply for 1 ordinary share at a price of Rs.150/- each, during the month of September 2009. The Company received valid applications for 67,499 shares from Warrant holders, for which allotment was made on October 15, 2009. Consequently, the Share Capital of the Company has increased from Rs. 72,34,05,288 to Rs. 72,34,72,787.

2. Non-Convertible Debentures:

The Company has, during the year, raised Rs. 700 crores through private placement of Non-Convertible Debentures, redeemable at a premium. The redemption premium payable on maturity amounting to Rs. 560.27 crores and expenses in relation to the above issues amounting to Rs. 3.87 crores, after netting of tax of Rs. 187.50 crores, comprising of current tax of Rs. 4.73 crores and deferred tax of Rs. 182.77 crores, has been set off against the ÃSecurities Premium AccountÃ, in accordance with Section 78 of the Companies Act, 1956.

3. ShareholderÃs Deposits placed with a subsidiary company include Rs. 276.99 crores (equivalent to USD 61.363 million) [(previous year Rs.168.70 crores) (equivalent to USD 33.110 million)] placed in earlier years, with the Company retaining the right to convert the said deposits into equity by December 31, 2012, as per the permission received from the Reserve Bank of India.

4. (a) The Company has given an undertaking to The Hongkong & Shanghai Banking Corporation in respect of borrowing by IHMS (Australia) Pty Limited, a wholly-owned subsidiary, for Australian Dollars 1.00 million (previous year 10.44 million), that it will not dilute its shareholding in the subsidiary.

(b) Samsara Properties Limited, a wholly-owned subsidiary of the Company has taken a loan from ICICI Bank for US$ 177 million. The Bank has an option to sell / transfer the loan to the Company on the occurrence of an event of default under the loan agreement.

(c) The Company owns 19.90% of issued share capital of Lands End Properties Private Limited (LEPPL), a company owning 67% interest in the Hotel Sea Rock Property through its wholly-owned subsidiary, Sky Deck Properties & Developers Private Limited (SDPDPL). LEPPL has raised a debt of Rs. 400 crores by issuance of zero coupon Non-Convertible Debentures, redeemable at a premium. In respect of the debentures issued by LEPPL, the Company has :-

i. the first right to purchase the entire shareholding of SDPDPL held by LEPPL for an aggregate value of Rs. 525.65 crores; or

ii. the obligation to make good the value of the short-fall if the lenders of LEPPL realise an amount lower than the Redemption Amount on sale of the shares of SDPDPL in case the right referred in (i) above is not exercised.

(d) The Company has given an option to certain shareholders of ELEL Hotels & Investment Ltd., a company having an underlying lease of the Hotel Sea Rock Property as under:-

i. Shareholders holding 3,98,090 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares on January 1, 2011 or July 1, 2011 or January 1, 2012 or July 1, 2012.

ii. Shareholders holding 5,36,339 shares have an option to sell these shares to the Company. The option is exercisable at a price to be determined based on fulfilment of certain obligations by the holders of these shares at an agreed fixed return, payable from June 25, 2009 at a price so determined. The shareholders can exercise the option on January 1,2013 or July 1, 2013 or January 1, 2014 or July 1, 2014. The Company also has an option to purchase these shares at the same price on April 1, 2013 or September 1, 2013 or April 1, 2014 or September 1, 2014.

5. Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 234.64 crores (previous year Ã Rs. 351.29 crores).

6. (a) Expenditure recovered from other parties :-

(b) Purchase of Food and Beverages is after adjusting Rs. 0.76 crore (previous year - Rs. 0.69 crore) on account of sale of empties, etc.

(c) Dividend Income includes dividend from subsidiary companies - Rs. 3.35 crores (previous year - Rs. 6.51 crores).

(d) Dividend Income includes income on long term trade investments - Rs. 23.75 crores (previous year - Rs. 31.08 crores) and on current investments - Rs. 13.08 crores (previous year - Rs. 38.42 crores).

(e) Exchange gain includes gain on currency swap - Rs. 6.25 crores (previous year Ã loss of Rs. 24.80 crores included in Exchange Loss) and loss on foreign exchange transactions - Rs. 2.92 crores (previous year Ã gain of Rs. 2.57 crores included in Exchange Loss).

(f) Other expenses include Bad Debts written off Ã Rs. 4.73 crores (previous year - Rs. 1.89 crores) and contribution to Electoral Trust Rs. 1.00 crore (previous year Ã Nil) (The Objects of the Trust inter alia, include holding by the Trustees of ÃDistribution FundsÃ for distribution to political parties).

7. Contingent Liabilities:

(a) On account of Income Tax matters in dispute :

i. In respect of matters which have been decided in the Company s favour by the Appellate Authorities, where the Income Tax Department has preferred an appeal - Rs. 13.03 crores (previous year - Rs. 57.01 crores).

ii. In respect of other matters for which CompanyÃs appeals are pending - Rs. 1.83 crores (previous year - Rs. 21.67 crores).

The said amounts have been paid / adjusted and will be recovered as refund if the matters are decided in favour of the Company.

(b) On account of other disputes in respect of :-

i. Luxury tax Ã Rs. 0.32 crore (previous year Ã Rs. 0.32 crore).

ii. Entertainment tax Ã Rs. 0.53 crore (previous year - Rs. 0.53 crore).

iii. Sales tax Ã Rs. 6.63 crores (previous year - Rs. 6.22 crores).

iv. Property tax Ã Rs. 7.40 crores (previous year - Rs. 6.77 crores).

v. Stamp Duty Ã Rs. 2.34 crores (previous year Ã Rs. 2.34 crores)

vi. Others Ã Rs. 7.74 crores (previous year Ã Rs. 8.17 crores)

(c) In respect of a disputed demand of Rs. 4.15 crores made in an earlier year towards Entertainment Tax in respect of a property, the Company has preferred an appeal in the High Court of Calcutta, and has paid an amount of Rs. 3.03 crores under protest, to the relevant authorities as directed by the court. As a matter of prudence, the Company has made a provision of the entire amount. The unpaid demand of Rs. 1.12 crores is being reflected in the books of account as Provision for Contingencies.

(d) Other claims against the Company not acknowledged as debts - Rs. 120.71 crores (previous year - Rs. 90.14 crores) mainly pertain to the demand of Rs. 21.64 crores, raised by the Delhi Development Authority towards additional License Fees (previous year - Rs. 22.32 crores) and additional ground rent amounting to Rs. 99.07 crores (previous year Ã Rs 67.82 crores) demanded by the Mumbai Port Trust.

(e) Guarantees given by the Company in respect of deposits received and loans obtained by other companies and outstanding as on March 31, 2010 - Rs. 392.41 crores (previous year - Rs. 463.27 crores).

(f) In respect of a subsidiary, arbitration proceedings initiated to resolve a long standing dispute with the Airport Authority of India (AAI) for granting access through the subsidiaryÃs land at Mumbai have been concluded in favour of the Company. As a result, the claim made by AAI on the Company amounting to Rs. 10.22 crores stands withdrawn. The revised claim pursuant to the award given by the arbitrator is awaited from the AAI. The Company does not expect any liability for the past period and should there be any liability crystallising on the subsidiary for any reason, the same is indemnifiable by the Company.

8. The Company has exercised the option granted vide notification F.No.17/33/2008/CL-V dated March 31, 2009, issued by the Ministry of Corporate Affairs and, accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended March 31, 2009 and 2010 have been recognised over the shorter of the maturity period or March 31, 2011. The unamortised balances as at the year end are presented as ÃForeign Currency Monetary Item Translation Difference AccountÃ.

9. Employee Benefits:

(b) The Company operates post retirement defined benefit plans as follows :-

i. Funded :

Ã Post Retirement Gratuity

Ã Pension to Employees Ã Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

(f) Provident Fund

In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the Companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as Defined Benefit Plans, since the Company is obligated to meet interest shortfall, if any, with respect to covered employees. According to the Management, the Actuary has opined that actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absence of guidance from the Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the aforesaid AS 15 read with the Accounting Standards Board Guidance. However, having regard to the position of the Fund (for covered employees) and confirmation from the Trustees of such Fund, provision has been made for such shortfall as at the year-end.

The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors. The above information has been certified by the actuary and has been relied upon by the Auditors.

10. As the turnover of the Company includes sale of food and beverages, it is not possible to give quantitative details of the turnover and food & beverages consumed. The Company has been exempted from giving these particulars vide order no. 46/20/2008-CL-III dated May 23, 2008, issued by the Department of Company Affairs.

11. The Company has an investment of Rs. 0.50 crore (previous year - Rs. 0.30 crore) and advances outstanding (including interest) of Rs. 8.76 crores (previous year - Rs. 9.42 crores) in a Joint Venture, Taj Karnataka Hotels and Resorts Limited (TKHRL). TKHRL has accumulated losses in excess of its paid-up capital and reserves. Considering the inherent value of TKHRLÃs assets, based on a valuation of the property and its proposed financial restructuring, for which the Company is in talks with the JV partner Ã the Government of Karnataka, the Management is of the view that there is no diminution, other than temporary, in the value of the investment and that the amount outstanding after the financial restructuring will be fully recovered.

12. The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices. The Company has replied to the notices and is waiting for the directorate to return its files, after which it will complete the replies. Adjudication proceedings are in progress.

13. Micro and Small Enterprises:

(a) There is no interest paid/payable during the year by the Company to the suppliers covered under Micro, Small, Medium Enterprises Development Act, 2006.

(b) The above information takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose.

14. Related Party disclosures:

(a) The names of related parties of the Company are as under:

i) Subsidiary Companies

Name of the Company Country of Incorporation

Domestic

TIFCO Holdings Ltd. India

KTC Hotels Ltd. India

United Hotels Ltd. India

Roots Corporation Ltd. India

Taj SATS Air Catering Ltd. India

Residency Foods & Beverages Ltd. India

Innovative Foods Ltd. India

International

Taj International Hotels (H.K.) Ltd. Hong Kong

IHMS (HK) Ltd. (De-registered with effect from March 26, 2010) Hong Kong

Chieftain Corporation NV Netherlands Antilles

IHOCO BV Netherlands

St. James Court Hotels Ltd. United Kingdom

Taj International Hotels Ltd. United Kingdom International Hotel Management Services Inc. United States of America

Samsara Properties Ltd. British Virgin Islands

IHMS (Australia) Pty. Ltd. Australia

IHMS (Restaurants) Pty. Ltd. (De-registered with effect from Australia

November 04, 2009)

Apex Hotel Management Services (Pte) Ltd. Singapore

ii) Jointly Controlled Entities

Name of the Company Country of Incorporation

Domestic

Taj Madras Flight Kitchen Pvt. Ltd. India

Taj Karnataka Hotels & Resorts Ltd. India

Taj Kerala Hotels & Resorts Ltd. India

Taj GVK Hotels & Resorts Ltd. India

Taj Safaris Ltd. India

Name of the Company Country of Incorporation International

TAL Hotels & Resorts Ltd. (formerly known as Taj Asia Ltd.) Hong Kong

IHMS Hotels (SA) (Proprietary) Ltd. South Africa

iii) Associates

Name of the Company Country of Incorporation

Domestic

Benares Hotels Ltd. India

Taj Air Ltd. India

Piem Hotels Ltd. India

Taj Trade and Transport Co. Ltd. India

Taj Enterprises Ltd. India

Inditravel Pvt. Ltd. India

Oriental Hotels Ltd. India

Taj Madurai Ltd. India

Taida Trading & Industries Ltd. India

Ideal Ice & Cold Storage Co. Ltd. India

International

Lanka Island Resort Ltd. (formerly known as Taj Lanka Resorts Ltd.) Sri Lanka

TAL Lanka Hotels PLC. (formerly known as Taj Lanka Hotels Ltd.) Sri Lanka

BJETS Pte Ltd., Singapore * Singapore

* Although the holding exceeds 50%, the investment is treated as an associate in terms of the shareholdersÃ agreement which caps the ultimate holding of the company to 44.44%.

Key managerial personnel comprise whole-time directors, who have the authority and responsibility for planning, directing and controlling the activities of the Company. The remuneration paid to such directors is disclosed in Note 12 on Page 95 and the dues from such persons are disclosed in footnotes 1 and 2 (i) of Schedule 8 Current Assets, Loans and Advances, forming part of the Balance Sheet. Presently Mr. Raymond N Bickson, the Managing Director, Mr. Anil P. Goel, the Executive Director - Finance and Mr. Abhijit Mukerji, the Executive Director - Hotel Operations, are the Key Management Personnel drawing remuneration excluding commission of Rs. 5.45 crores (previous year Rs. 3.89 crores), Rs. 1.02 crores (previous year Rs. 1.00 crore) and Rs. 0.82 crore (previous year Rs. 0.58 crore) respectively.

15. The CompanyÃs only business being hoteliering, disclosure of segment-wise information is not applicable under Accounting Standard 17 - ÃSegmental InformationÃ (AS-17) notified by the CompanyÃs (Accounting Standards) Rules, 2006. There is no geographical segment to be reported since all the operations are undertaken in India.

16. Previous yearÃs figures have been regrouped, wherever necessary, to conform to the current yearÃs presentation.

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