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Indian Hotels Co Ltd.

BSE: 500850 Sector: Services
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OPEN 125.80
VOLUME 36800
52-Week high 145.65
52-Week low 88.80
P/E 105.04
Mkt Cap.(Rs cr) 12,262
Buy Price 0.00
Buy Qty 0.00
Sell Price 123.65
Sell Qty 1.00
OPEN 125.80
CLOSE 126.30
VOLUME 36800
52-Week high 145.65
52-Week low 88.80
P/E 105.04
Mkt Cap.(Rs cr) 12,262
Buy Price 0.00
Buy Qty 0.00
Sell Price 123.65
Sell Qty 1.00

Indian Hotels Co Ltd. (INDHOTEL) - Director Report

Company director report



The Directors have pleasure in presenting the 115th Annual Report of your Companytogether with its Audited Financial Statements for the year ended March 31 2016:


Standalone Consolidated
Particulars 2015/16 2014/15 2015/16 2014/15
Rs. crores Rs. crores Rs. crores Rs. crores
Total Income 2382.32 2103.60 4706.27 4287.85
Profit before Depreciation Finance Costs and Tax 537.17 437.89 731.93 587.29
Less: Depreciation 127.08 117.85 316.67 291.29
Less: Finance Costs 88.20 89.46 245.96 175.57
Profit before Tax & Exceptional Item 321.89 230.58 169.30 120.43
Less: Exceptional Items 10.21 228.70 67.16 352.91
Profit / (Loss) before Tax 311.68 1.88 102.14 (232.48)
Less: Provision for Tax 163.86 125.47 199.48 159.59
Add: MAT Credit 51.89 41.37 56.75 42.94
Add: Excess Provision of Tax of earlier years (Net) 1.33 - 2.66 2.05
Profit / (Loss) after Tax 201.04 (82.02) (37.93) (347.08)
Less: Minority Interest in subsidiary - - (25.45) (30.98)
Add: Share of Profit / (Loss) of Associates - - 2.85 (0.04)
Profits / (Loss) after Tax Minority Interest & Share of
201.04 (82.02) (60.53) (378.10)
Add: Balance brought forward from the previous year (471.50) (389.48) (1680.82) (1294.54)
Less: Transfer (to) / from Other Reserves - - 1.85 (1.65)
Less: Transfer to Reserve Fund - - (3.32) (3.00)
Less: Tax on Dividend - - (4.85) -
Balance carried to Balance Sheet (270.46) (471.50) (1747.67) (1680.82)


The GDP growth in India during the year was at an estimated 7.5%. Inflation hasmoderated from 5.2% in March 2015 to 4.8% in March 2016. Inflation is further expectedto reduce to single digits going forward. The Indian Rupee has witnessed a sharp declineagainst the US Dollar from Rs. 59 in April 2014 to Rs. 66 in March 2016. It is expectedthat continued weakness in the INR would favourably impact the inbound foreign touristarrivals in 2016 in addition to the ‘E-Visa’ scheme which has gathered tractionsince 2015 and the ‘Visa-on-arrival’ benefit being extended to a larger list ofcountries. Economic revival would be driven by the Government’s ability to pressahead with reforms including the critical reforms viz – Goods and Services Taxlegislation Bankruptcy code and a stronger anti-corruption law.

The International tourist arrivals worldwide grew to a record 1.2 billion in 20154.4% above 2014. Based on the recent trends the United Nations World Tourism Organization(UNWTO) projects growth of 4% in international tourist arrivals worldwide for 2016.

The Foreign Tourist arrivals in India during 2015 were 8 million which translates toa 4.4% growth over the previous year. Foreign Exchange Earnings (FEEs) grew by 2.3% to Rs.126211 crores during January to December 2015 as compared to the previous year. The TajGroup opened three Luxury hotels in Mumbai Bengaluru and Dubai two new Gateway hotels atPune and Ajmer and one new Vivanta by Taj hotel at Guwahati. The Group currently has aportfolio of 34 Ginger hotels with an aggregate inventory of 3177 rooms (including 6hotels under management contract) and one transit guest house. The inventory of the TajGroup of Hotels now stands at 133 hotels with 16592 rooms.

Your Company continues to pursue expansion both in the domestic and internationalmarket in a capital light manner to achieve sustainable and profitable growth.



The Total Income for the year ended March 31 2016 at Rs. 2382.32 crores represents agrowth of 13% over the previous year. Within the overall revenue Room Revenue increasedby 10% driven by improved ARR occupancies and incremental impact of full year operationsof Vivanta by Taj Dwarka which commenced operations in March 2015. The Food and BeverageRevenues increased by 13% over the previous year aided by growth in restaurant sales andbanqueting income. Other Operating Income Management and Operating Fees Dividend andInterest Income were also higher compared to the previous year.

Depreciation and Finance Costs

Depreciation for the year was higher at Rs. 127.08 crores as compared to Rs. 117.85crores for the previous year. Finance costs for the year ended March 31 2016 net ofcurrency swap gains of Rs. 88.20 crores were marginally lower by Rs. 1.26 crores ascompared to the previous year. Gross interest costs were lower by Rs. 13.10 crores due toretirement of debt during the year which was however offset by lower currency swap gainsin the current year due to the sustained depreciation of the Indian Rupee against the USDollar.

Profit Before Tax and Exceptional Items

Profit before Tax and Exceptional Items stood at Rs. 321.89 crores which represents anincrease of 40% as compared to the previous year.

Exceptional Items

Exceptional Items include foreign exchange loss of Rs. 56.56 crores pertaining toamortization of the exchange loss on the revaluation of External Commercial Borrowing(ECB) and on revaluation of cross currency swap contracts.

Exceptional Items also include Rs. 9.83 crores being expenditure on a project writtenoff and gain of Rs. 56.53 crores on sale of your Company’s investment in TataProjects Limited which was classified as a long term investment.

In the previous year your Company had recognised diminution in value of long terminvestments of Rs. 213.49 crores along with other items and thus the adverse impact ofthe Exceptional Items for the current year is lower by Rs. 218.49 crores as compared tothe previous year.


The total borrowings (excluding Compulsorily Convertible Debentures for the previousyear) stood at Rs. 2107.86 crores as at March 31 2016 as against Rs. _2209.09 crores ason March 31 2015 for the standalone entity representing a decrease of

Rs. 101.23 crores due to repayment of debt.

Profit / (Loss) before and after tax

The Profit before Tax for the year was at Rs. 311.68 crores as compared to Rs. 1.88crores for the previous year. The Profit after Tax for the year was at Rs. 201.04 croresas compared to a Loss of Rs. (82.02) crores for the previous year.


The consolidated income of your Company for the year ended March 31 2016 aggregatedRs. 4706.27 crores as against Rs. 4287.35 crores for the previous year. The consolidatedturnover increased by 9.7% driven by the parent Company’s domestic portfolio as alsothe revenues earned from the new hotels which commenced operations in the current year.The Profit before Tax and Exceptional Items of Rs. 169.30 crores significantly improved by40% over the previous year. The Loss after Tax aggregated to Rs. (60.53) crores for theyear has significantly reduced when compared to the Loss after Tax of Rs. (378.10) croresfor the previous year. The consolidated financial results of the previous year wereimpacted due to Exceptional Items aggregating to Rs. 352.91 crores.

During the year your Company continued to face a challenging environment not just inthe domestic market but also across the key international markets wherein your Companyowns / operates hotels and markets that are a source of business for us.

Your Company’s hotels in the USA have reported relatively flat turnover and EBITDAcompared to the previous year. The renovations undertaken at Sri Lanka and Maldives inrecent years have been well received by the guests as is evident from the improvedperformances from these regions.


On account of improved performance and Profit After Tax reported by your Company duringthe current year the Board of Directors recommend a dividend at Rs. 0.30 per share outof reserves for the year 2015/16 (previous year Nil per share). The dividend on EquityShares if approved by the Members would involve a cash outflow of Rs. 35.72 croresincluding dividend tax.

Conversion of Compulsorily Convertible Debentures

In September 2014 your Company had allotted 18.18 crores Compulsorily ConvertibleDebentures (CCDs) on a Rights basis to its existing shareholders aggregating Rs. 999.91crores. Each CCD was compulsorily convertible into one Equity Share fully paid-up of theface value of Rs. 1 per share at a premium of Rs. 54 per share after 18 months from thedate of allotment. Consequently the CCDs had been converted into 18.18 crores EquityShares on March 1 2016 upon expiry of 18 months from the date of allotment. Accordinglythe paid-up Equity Share Capital increased from Rs. 80.75 crores to Rs. 98.93 crores postthe conversion.


During the year your Company had redeemed the following Debentures:

Out of the 3000 2% Secured Non-Convertible Debentures of the face value of Rs.800000 issued on a private placement basis 30% of the face value was redeemed on March23 2016 for an aggregate value of Rs. 90 crores along with redemption premium of Rs.1.72 lakhs per debenture.

Capital Expenditure

During the year under review your Company incurred Rs. 191.87 crores towards capitalexpenditure a majority of which was incurred towards the Vivanta by Taj Guwahati projectas well as on new Information Technology initiatives renovations and refurbishments ofhotels.

Fixed Deposits

The outstanding amount of Fixed Deposits placed with your Company was Nil (Previousyear Nil) excluding Rs. 0.81 crore (Previous year Rs. 1.04 crore) which remainedunclaimed by depositors as at March 31 2016. Your Company does not accept and / or renewFixed Deposits from the general public and shareholders.

Loans Guarantees or Investments

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


Our strategic objective is to build a sustainable organization that remains committedto meet the expectations of our discerning customers while generating profitable growthfor our shareholders and all other stakeholders. In this regard your Company has unveileda slew of strategic initiatives each of which is summarised in the Management Discussionand Analysis.

Restructuring of Overseas Investments

In the past your Company’s diverse international investments were distributedacross multiple geographies and entities which led to a complex holding structure withcross holdings across jurisdictions. This did not facilitate consolidation of value undera single overseas entity thereby limiting the ability to raise funds or access capitalmarkets while also precipitating taxation inefficiencies and other regulatory exposures.Recognizing the importance of restructuring its international investments and based on anapproval of the Board of Directors and The Reserve Bank of India your Company embarked onan international restructuring plan to have a simplified structure with one Apex HoldingCompany which would consolidate the value of material overseas assets under a singleoverseas entity. This would enhance the Company’s fund raising ability and the valueof underlying assets would be appropriately reflected in the Company’s books alongwith achieving efficiency in debt service due to bigger size of holding Company and largerup-streaming to one apex Company.

IHOCO BV the 100 % offshore subsidiary Company has since become the Company's apexoffshore investment holding Company. Holdings in the USA UK Sri Lanka Maldives hotelsand the two London restaurants have been shifted to IHOCO BV. Thus eight owned hotels(1584 rooms) and two UK restaurants are now being held through IHOCO BV. The conclusion ofthe restructuring marks a significant milestone in your Company’s ability tofacilitate potential value creation.

Amalgamation of International Hotel Management Services LLC

As part of the Company’s restructuring plan at a meeting held on October 192015 the Board of Directors had approved the amalgamation of International HotelManagement Services LLC (formerly known as International Hotel Management Services Inc.)a wholly held subsidiary ("Transferor Company") into the Company by way of aScheme of Arrangement amongst the Company the Transferor Company and the respectiveshareholders and creditors (the "Scheme") as provided under Sections 391 to 394of the Companies Act 1956 read with Section 52 of the Act Section 78 and Sections 100 to103 of the Companies Act 1956. The appointed date for the Scheme is January 1 2016. Theintended amalgamation has been approved by the Members at the meeting convened on May 42016 on the direction of the Honourable High Court of Judicature at Bombay ("BombayHigh Court") where the application seeking permission for the amalgamation was filed.

Amalgamation of Lands End Properties Private Limited (Sea Rock)

The Sea Rock asset is a marquee site and is key to your Company’s ability to drivevalue through further enhancing its existing portfolio of exclusive assets in Mumbai.Recognizing the importance of reassuming overall control over the Sea Rock asset yourCompany has pursued the strategic objective by firstly purchasing the balance 80.1% inLands End Properties Private Limited from the other shareholders and thereafter seeking toamalgamate Lands End Properties Private Limited with itself. This would permit yourCompany to evaluate and pursue the most value accretive option for this unique asset in atime bound manner.

Consequently the step down subsidiaries of Lands End Properties Private Limited viz.Skydeck Properties and Developers Private Limited Sheena Investments Private LimitedLuthria and Lalchandani Hotel and Properties Private Limited and ELEL Hotels andInvestments Limited have also become subsidiaries of your Company.

To progress the proposed amalgamation of Lands End Properties Private Limited at ameeting held on October 19 2015 the Board of Directors had approved the amalgamation ofLands End Properties Private Limited a wholly held subsidiary ("TransferorCompany") into the Company by way of a Scheme of Arrangement amongst the Companythe Transferor Company and the respective shareholders and creditors (the"Scheme") as provided under Sections 391 to 394 of the Companies Act 1956 readwith Section 52 of the Act section 78 and Sections 100 to 103 of the Companies Act 1956.The appointed date for the Scheme is March 31 2016. The intended amalgamation has beenapproved by the Members of the Company at the meeting convened on May 4 2016 on thedirection of the Honourable High Court of Judicature at Bombay ("Bombay HighCourt") where the application seeking permission for the amalgamation has been filed.

The accounting impact of both the above Schemes of Arrangement can only be reflected inthe financial statements after receiving the requisite orders of the Bombay High Courtsanctioning the Schemes and filing of the orders with the Registrar of Companies Mumbai.As the orders of the Bombay High Court are awaited the financial statements as at and forthe year ended March 31 2016 do not include any adjustments that will arise onimplementation of the Schemes and the Company’s investments in the transferorcompanies continues to be carried at their previous carrying values.

The Statutory Auditors have drawn attention to the above matter by way of "Matterof Emphasis" in their report.

Proposed Divestment of IHMS (Boston) LLC – Taj Boston Hotel

Due to the onset of the global economic recession which impacted the fortunes of thehospitality sector around the world and thus the Company’s profitability yourCompany had been relooking at all options for a course correction in strategy focusing ongrowth in high margin markets and evaluating the relevance of some of its existing assetsin the portfolio to reduce leverage.

Taj Boston was acquired in November 2006 and is housed in IHMS (Boston) LLC aDelaware company and a step down subsidiary of your Company. Taj Boston has been unableto earn profits since acquisition and your Company has had to consistently fund the lossessince it was acquired.

In line with your Company’s strategic vision to be asset light and consolidate itsportfolio through value unlocking a decision was taken to divest Taj Boston by way ofsale of IHMS (Boston) LLC the asset owning company.

The Board of Directors has accorded its approval to allow United Overseas Holding Inc(UOH) an indirect Wholly Owned Subsidiary of your Company in the United States to pursuethe option of divestment of the Taj Boston hotel at a consideration not being lower thanUSD 125 million (US Dollars One Hundred and Twenty Five Million)whilst retaining brandpresence on the property through Management Services Agreement . This will be subject toMembers and other approvals as would be necessary and the Members have been approachedto consider and if deemed fit grant their approval for the proposed divestment.


The brief outline of the Corporate Social Responsibility (CSR) Policy of your Companyand the initiatives undertaken by your Company on CSR activities during the year are setout in Annexure I of this report in the format prescribed under the Companies (CorporateSocial Responsibility Policy) Rules 2014. The CSR policy is available on the website ofyour Company.


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

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control systems in your Company its compliance with operating systemsaccounting procedures and policies at all locations of your Company. Based on the reportof the Internal Audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions suggested are presented to the Audit Committee of the Board. The laiddown internal financial controls are adequate and were operating effectively during theyear. In addition during the year 2015/16 as required under_Section 143 of the Act theStatutory Auditors have evaluated and expressed an opinion on the Company's internalfinancial controls over financial reporting based on an audit. In their opinion theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2016.


Your Company has adopted a Whistle Blower Policy to provide a mechanism for theDirectors and employees to report genuine concerns about any unethical behaviour actualor suspected fraud or violation of your Company’s Code of Conduct. The provisions ofthis policy are in line with the provisions of Section 177 (9) of the Act and Regulation22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBIListing Regulations). The Whistle Blower policy can be accessed on your Company’swebsite at the link:


The details forming part of the extract of the Annual Return in form MGT-9 as perSection 92 (3) of the Act are annexed herewith as Annexure II.


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


In line with the requirements of the Act and the SEBI Listing Regulations your Companyhas formulated a policy on dealing with Related Party Transactions (RPTs) which can beaccessed on the Company’s website under the link: Policy intends to ensure that proper reporting approval and disclosure processes arein place for all transactions between the Company and Related Parties. Prior omnibusapproval is obtained for RPT’s which are of a repetitive nature and entered in theOrdinary Course of Business and are at Arm’s Length. All RPT’s are placed beforethe Audit Committee for review on a quarterly basis. All RPTs that were entered intoduring the financial year were in the Ordinary Course of Business and at Arm’sLength. For one RPT where your Company entered into a Hotel Operating Agreement with TajGVK Hotels and Resorts Limited where marketing fees and group service costs recovery wereat a negotiated rate lower than the approved framework the requisite approval of theAudit Committee was obtained.

During the year the Company had entered into one materially significant RPT which wasat arms-length basis for which the necessary Board and Members approval was sought thedetails of which are given in Form AOC-2 which is attached as Annexure III to this Report.


Although not mandatory your Company has constituted a Risk Management Committee as ameasure of good governance. The details of the Committee and its terms of reference areset out in the Corporate Governance Report.

Your Company has adopted a Risk Management Policy pursuant to the provisions ofSection 134 of the Act to identify and evaluate business risks and opportunities formitigation of the same. This framework seeks to create transparency minimize adverseimpact on business objective and enhance your Company’s competitive advantage. Therisk framework defines the risk management approach across the enterprise at variouslevels including documentation and reporting. Your Company is faced with risks ofdifferent types each of which need varying approaches for mitigation. Details of variousrisks faced by your Company are provided in the Management Discussion and Analysis.


The Consolidated Financial Statements of your Company and its Subsidiaries JointVentures and Associates prepared in accordance with the relevant Accounting Standards ofthe Institute of Chartered Accountants of India duly audited by the Statutory Auditorsform a part of the Annual Report and are reflected in the Consolidated Accounts.

Your Company has 28 Subsidiaries 8 Joint Ventures and 6 Associates as at March 312016. Pursuant to the provisions of Section 129(3) of the Act a statement containingsalient features of the financial statements of your Company’s SubsidiariesAssociates and Joint Ventures in Form AOC-1 is attached to the Financial Statements ofyour Company.

Pursuant to the provisions of Section 136 of the Act the financial statements of yourCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of your Company.

During the year under review your Company acquired the balance as the Company 80.1%equity shares in Lands End Properties Private Limited (LEPPL) and thus LEPPL has become aWholly Owned Subsidiary of the Company. As of result this acquisition the step downsubsidiaries of LEPPL i.e. Skydeck Properties and Developers Private Limited SheenaInvestments Private Limited Luthria and Lalchandani Hotel and Properties Private Limitedand ELEL Hotels and Investments Limited also become subsidiaries of your Company.

Pursuant to the International Restructuring exercise United Overseas Holdings Inc(UOH) had been incorporated as a Wholly Owned Subsidiary of IHMS Inc on August 25 2015and IHMS Inc had been converted into a LLC on October 5 2015 to aide the proposedamalgamation with your Company which has since been approved by the Members in the CourtConvened Meeting held on May 4 2016.

During the year Premium Aircraft Leasing Corporation Ltd incorporated in Ireland as awholly owned subsidiary of Piem International (HK) Ltd was dissolved with effect fromFebruary 10 2016. The policy for determining material subsidiaries can be accessed onyour Company’s website under the link https://


Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel(KMP) of your Company are Mr. Rakesh Sarna Managing Director & CEO Mr. AnilP. Goel Executive Director & CFO Mr. Mehernosh S. Kapadia Executive Director –Corporate Affairs and Mr. Beejal Desai Vice President – Legal & CompanySecretary. There has been no change in KMP's during the year.

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the Act.

During the year Dr. N. S. Rajan was appointed as an Additional Director of yourCompany in a Non-Executive capacity effective November 27 2015 and he holds Office uptothe date of the forthcoming Annual General Meeting (AGM). Mr. Anil P. Goel's tenure as aWhole-time Director of the Company ended on March 16 2016 and that of Mr.Mehernosh S. Kapadia shall end on August 9 2016. The Company has greatly benefited fromtheir expertise and experience. In view of the same it is proposed to re-appoint Mr. AnilP. Goel as a Whole-time Director of the Company for a period of five years w.e.f. March17 2016 and Mr. Mehernosh S. Kapadia as a Whole-time Director of the Company from August10 2016 upto his reaching the age of 65 years i.e. May 22 2018 (retirement age ofExecutive Directors as per the Governance Guidelines).

In accordance with the Act and the Articles of Association of your Company Mr. CyrusP. Mistry retires by rotation and is eligible for re-appointment. Your approval for theirappointments / re-appointments as Directors has been sought in the Notice convening theAGM of your Company.


During the year under review seven Board Meetings were held and the intervening gapbetween the meetings did not exceed the period prescribed under the Act the details ofwhich are given in the Corporate Governance Report.


Your Company has adopted the Governance Guidelines which inter alia cover aspectsrelated to composition and role of the Board Chairman and Directors Board diversitydefinition of independence Director’s term retirement age and Committees of theBoard. They also cover aspects relating to nomination appointment induction anddevelopment of Directors Director remuneration subsidiary oversight Code of ConductBoard Effectiveness Review and mandates of Board Committees.

A. Board Evaluation

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

The performance of the Board was evaluated by the Board after seeking inputs from theDirectors on the basis of the criteria such as the Board Composition and structureseffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual Directors on the basis of criterias such as the contributionof the individual Director to the Board and Committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc. In addition the Chairman was also evaluated on the key aspect of his role.

In a separate meeting of independent Directors performance of non-independentDirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of the Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual Directors was also discussed. Performance evaluation of Independent Director'swas done by the entire Board excluding the Independent Directors being evaluated.

B. Appointment of Directors and criteria for determining qualifications positiveattributes independence of a Director

The NRC is responsible for developing competency requirements for the Board based onthe industry and strategy of your Company. The NRC reviews and meets potential candidatesprior to recommending their nomination to the Board. At the time of appointment specificrequirements for the position including expert knowledge expected is communicated to theappointee. The NRC has formulated the criteria for determining qualifications positiveattributes and independence of Directors in terms of provisions of Section 178 (3) of theAct and the SEBI Listing Regulations 2015 as stated under: Independence: A Director willbe considered as an ‘Independent Director’ if he / she meets with the criteriafor ‘Independence’ as laid down in the Act Regulation 16 of the SEBI ListingRegulations and the Governance Guidelines. Competency: A transparent Board nominationprocess is in place that encourages diversity of thought experience knowledgeperspective age and gender. It is ensured that the Board comprises a mix of members withdifferent educational qualifications knowledge and who possess adequate experience inbanking and finance accounting and taxation economics legal and regulatory mattersconsumer industry hospitality sector and other disciplines related to the company’sbusinesses.

Additional Positive Attributes:

The Directors should not have any other pecuniary relationship with your Company itssubsidiaries associates or joint ventures and the Company’s promoters except asprovided under law.

The Directors should maintain an arm’s length relationship between themselves andthe employees of the Company as also with the directors and employees of itssubsidiaries associates joint ventures promoters and stakeholders for whom therelationship with these entities is material.

The Directors should not be the subject of proved allegations of illegal or unethicalbehaviour in their private or professional lives.

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

C. Remuneration Policy

Your Company had adopted a Remuneration Policy for the Directors KMP and otheremployees pursuant to the provisions of the Act and the SEBI Listing Regulations. The keyprinciples governing your Company’s Remuneration Policy are as follows:

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

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

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

Remuneration paid should be reflective of the size of your Company complexity of thesector / industry / Company’s operations and your Company’s capacity to pay theremuneration and be consistent with recognized best practices.

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

The remuneration payable to Directors shall be inclusive of any remuneration payablefor services rendered in any other capacity unless the services rendered are of aprofessional nature and the NRC is of the opinion that the Director possesses requisitequalification for the practice of the profession.


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

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

Basic/fixed salary is provided to all employees to ensure that there is a steady incomein line with their skills and experience. In addition your Company provides employeeswith certain perquisites allowances and benefits to enable a certain level of lifestyleand to offer scope for savings. Your Company also provides all employees with a socialsecurity net subject to limits by covering medical expenses and hospitalization throughre-imbursements or insurance cover and accidental death benefits etc. Your Companyprovides retirement benefits as applicable with the Retirement Policy.

In addition to the basic/fixed salary benefits perquisites and allowances as providedabove your Company provides MD / EDs such remuneration by way of performance linkedbonus calculated with reference to the net profits of your Company in a particularfinancial year as may be determined by the Board subject to the overall limitsstipulated in Section 197 of the Act. The specific amount payable to the MD / EDs would bebased on performance as evaluated by the NRC and approved by the Board.

Your Company provides the rest of the employees a performance linked bonus. Theperformance linked bonus is driven by the outcome of the performance appraisal process andthe performance of your Company and the individual’s contribution.

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


During the year under review no significant material orders were passed by theregulators or courts or tribunals impacting the going concern status and yourCompany’s operations.


M/s PKF Sridhar & Santhanam LLP the Joint Auditors of the Company have recentlyinformed the Company of their decision not to continue as Joint Auditors from theconclusion of the 115th AGM vide their letter dated May 12 2016. AccordinglyDeloitte Haskins & Sells LLP Chartered Accountants are proposed to be appointed asthe sole Statutory Auditors with effect from August 23 2016.

At the AGM the Members will be requested to ratify the re-appointment of DeloitteHaskins & Sells LLP Chartered Accountants (Firm No. 117366W / W-100018) as the soleStatutory Auditor from the conclusion of this AGM upto the conclusion of the next AGM andauthorise the Board of Directors to fix their remuneration.

The report of the Statutory Auditors along with the notes to Schedules is enclosed tothis report and does not contain any qualification reservation or adverse remark ordisclaimer.


Pursuant to the provisions of the Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 your Company has appointed M/sP.K.Pandya and Associates to undertake the Secretarial Audit of your Company for thefinancial year 2015/16. The Secretarial Audit Report is annexed herewith as Annexure IV.The report does not contain any qualifications reservation or adverse remarks.


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


As required under Section 134(3)(M) of the Act read with Rule 8 of the CompaniesAccounts) Rules 2014 the information relating to foreign exchange earnings and expensesis set out in notes 40 and 41 of the Notes to the Financial Statements.


The disclosure required to be furnished pursuant to Section 197 (12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure V to this Report. The particulars of employees required to befurnished pursuant to Section 197 (12) read with Rule 5 (2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 forms part of this Annual Report.However as per the provisions of Section 136 (1) of the Act the reports and accounts arebeing sent to all the Members of your Company excluding the statement of particulars ofemployees. Any Member interested in obtaining a copy may write to the Company Secretary atthe Registered Office of your Company. The full Annual Report including the aforesaidinformation is available on your Company’s website.

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

Your Company has zero tolerance for sexual harassment at its workplace and has adopteda policy on prevention prohibition and redressal of sexual harassment at the workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. During the year under review yourCompany has received 23 complaints on sexual harassment and all the complaints have beendisposed off and appropriate action taken and no cases remain pending.


Based on the framework of internal financial controls and compliance systemsestablished and maintained by your Company work performed by the Internal Statutory andSecretarial Auditors including audit of internal financial controls over financialreporting by the Statutory Auditors and reviews performed by the Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatyour Company’s internal financial controls were adequate and effective during thefinancial year 2015/16.

Accordingly pursuant to Section 134(5) of the Act the Board of Directors to the bestof their knowledge and ability confirm that: (i) In the preparation of the accounts forthe year ended March 31 2016 the applicable accounting standards have been followed andthat there are no material departures; (ii) The Directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that werereasonable and prudent so as to give a true and fair view of the state of affairs of yourCompany at the end of the financial year and of the profit of your Company for that theperiod; (iii) The Directors have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of your Company and forpreventing and detecting fraud and other irregularities; (iv) They have prepared theFinancial Statements for the financial year ended March 31 2016 on a ‘goingconcern’ basis. (v) The Directors have laid down internal financial controls for thecompany which are adequate and are operating effectively.

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


As required by the SEBI Listing Regulations the report on Management Discussion andAnalysis Corporate Governance as well as the Practising Company Secretary’sCertificate regarding compliance of conditions of Corporate Governance form part of theAnnual Report.


The Directors express their deep sense of appreciation for the contribution made by theemployees to the significant improvement in the operations of the Company. The Directorsalso thank all the stakeholders including Members customers lenders vendors businesspartners and the Government of India for their continued co-operation and support.

On behalf of the Board of Directors
Cyrus P. Mistry
Mumbai May 18 2016 Chairman
Registered Office:
Mandlik House
Mandlik Road
Mumbai 400 001.
CIN: L74999MH1902PLC000183
Tel.: 022 66395515 Fax: 022 22027442