To the Members
The Directors take pleasure in presenting the Third Integrated Annual Report of TheIndian Hotels Company Limited ('the Company' or 'IHCL') along with the Audited FinancialStatements for the Financial Year ended March 31 2021. The consolidated performance ofthe Company and its subsidiaries has been referred to wherever required.
|1. Financial Results || || || ||(Rs crores) |
| ||Standalone || ||Consolidated || |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue ||1133.15 ||2743.47 ||1575.16 ||4463.14 |
|Other income ||110.52 ||134.41 ||164.72 ||132.42 |
|Total income ||1243.67 ||2877.88 ||1739.88 ||4595.56 |
|Expenses Operating expenditure ||1230.05 ||1982.41 ||1936.92 ||3495.61 |
|Depreciation and amortisation expenses ||203.81 ||203.78 ||409.63 ||404.24 |
|Total Expenses ||1433.86 ||2186.19 ||2346.55 ||3899.85 |
|Profit/(Loss) before finance cost and tax ||(190.19) ||691.69 ||(606.67) ||695.71 |
|Finance cost ||294.79 ||237.55 ||402.82 ||341.12 |
|Profit/(Loss) before Exceptional Items Tax and share of equity accounted investees ||(484.98) ||454.14 ||(1009.49) ||354.59 |
|Add/(Less): Exceptional Items ||(155.30) ||(16.40) ||159.95 ||40.95 |
|Profit/(Loss) before Tax (PBT) ||(640.28) ||437.74 ||(849.54) ||395.54 |
|Tax expense ||(115.50) ||36.33 ||(155.33) ||44.77 |
|Profit/(Loss) after Tax before share of equity accounted investees ||(524.78) ||401.41 ||(694.21) ||350.77 |
|Add: Share of Profit/(Loss) of Associates and Joint Ventures net of tax ||NA ||NA ||(101.42) ||12.97 |
|Profit/(Loss) for the year ||(524.78) ||401.41 ||(795.63) ||363.74 |
|Attributable to: || || || || |
|Shareholders of the Company ||(524.78) ||401.41 ||(720.11) ||354.42 |
|Non-Controlling Interest ||NA ||NA ||(75.52) ||9.32 |
|Opening Balance of Retained Earnings ||808.52 ||603.77 ||152.26 ||154.00 |
|Adjustment on account of transition to the new lease standard net of taxes ||- ||(106.43) ||- ||(264.32) |
|Profit / (Loss) for the Year ||(524.78) ||401.41 ||(720.11) ||354.42 |
|Other comprehensive income / (losses) ||26.36 ||(16.04) ||29.97 ||(17.67) |
|Total comprehensive income ||(498.42) ||385.37 ||(690.14) ||336.75 |
|Dividend Paid ||(59.46)* ||(59.46) ||(59.46)* ||(59.46) |
|Tax on Dividend ||- ||(11.72) ||- ||(11.70) |
|Realised gain / (loss) on sale of investment transferred from OCI ||- ||(3.01) ||5.80 ||(3.01) |
|Adjustments on account of change in non-controlling interest ||- ||- ||(169.16) ||- |
|Closing Balance of Retained Earnings ||250.64 ||808.52 ||(760.70) ||152.26 |
|*Dividend declared in FY 2019-20 and paid during the year under review |
The Board recommended a dividend of ' 0.40 per fully paid Equity Share on 1189258445Equity Shares of face value ' 1 each for the year ended March 31 2021 (Previous Year '0.50 per share).
The dividend on Equity Shares is subject to the approval of the Shareholders at theAnnual General Meeting ('AGM') scheduled to be held on Tuesday June 22 2021. Thedividend once approved by the Shareholders will be paid on and after Tuesday June 292021.
The dividend on Equity Shares if approved by the Members would involve a cash outflowof ' 47.57 crores and shall be paid out of profits of the Company for previous financialyears forming a part of retained earnings pursuant to Section 123(1) of the Companies Act2013 ('the Act').
3. Transfer to Reserves
Due to losses in FY 2020-21 no amount has been transferred to Reserves. An amount of '32.39 crores was transferred from Debenture Redemption Reserve to General Reserveconsequent to the redemption of Unsecured Non-convertible Redeemable Debentures of ' 200crores in April 2020.
4. Company's performance
On a standalone basis the Total Income for FY 2020-21 was ' 1243.67 crores which waslower than the previous year's Total Income of ' 2877.88 crores by 57% caused by theCOVID-19 pandemic and efforts to curtail it. This had a severe impact on the economy ingeneral and travel and tourism in particular. Consequently the Company reported a Lossafter tax for FY 2020-21 of ' 524.78 crores in comparison with a Profit after tax of '401.41 crores for FY 2019-20.
On a consolidated basis the Total Income for FY 2020-21 was ' 1739.88 crores lowerthan the previous year's Total Income of ' 4595.56 crores by 62%. The Loss after taxattributable to shareholders and non-controlling interests for FY 2020-21 was ' 795.63crores as against a Profit after Tax of ' 363.74 crores for FY 2019-20. The Lossattributable to shareholders of the Company for FY 2020-21 was ' 720.11 crores as againsta profit for the previous year of ' 354.42 crores.
Depreciation and Finance Costs
Depreciation at ' 203.81 crores was in line with that of FY 2019-20. Finance costs forFY 2020-21 at ' 294.79 crores was higher than FY 2019-20 cost by ' 57.24 crores. This wasmainly due to interest on increased borrowings to fund the Company's operational cashrequirements and to a lesser extent interest on lease liabilities.
Exceptional Items include an exchange gain on change in fair value of cross currencyswap derivative contracts ' 25.00 crores (Previous Year loss of ' 21.76 (crores) and aprovision for impairment due to losses in overseas subsidiaries of ' 179.52 crores(Previous Year ' 68.98 (crores).
The total long-term borrowings stood at ' 2576.79 crores as on March 31 2021 asagainst ' 1943.32 crores as on March 31 2020.
During FY 2020-21 the Company raised 1500 7.50% Unsecured Non-convertible RedeemableDebentures of face value '10 lakhs each aggregating to ' 150 crores and 3000 7.95%Unsecured Non-convertible Redeemable Debentures of face value '10 lakhs each aggregatingto ' 300 crores for three years each.
The Company also redeemed 2000 7.85% Unsecured Non-Convertible Redeemable Debenturesof face value ' 10 lakhs each aggregating to ' 200 crores on April 20 2020.
During FY 2020-21 the Company's outlay towards capital expenditure was ' 140.63crores.
An analysis of the Business and Financial Results are given in the ManagementDiscussion and Analysis which forms a part of the Annual Report.
5. Subsidiary Companies
The Company has 25 subsidiaries 6 associates and 7 joint venture companies as on March31 2021. There has been no material change in the nature of the business of thesubsidiaries.
During the year under review Ideal Ice & Cold Storage Company Limited has become awholly-owned subsidiary of IHCL earlier being a subsidiary of Taida Trading &Industries Limited an associate of the Company.
The Company has also increased its shareholding in IHMS Hotels (SA) (Proprietary)Limited and is now considered as a subsidiary of the Company from earlier being a JointVenture. Consequently Goodhope Palace Hotels (Proprietary) Limited which was a subsidiaryof IHMS Hotels (SA) (Proprietary) Limited has become an indirect subsidiary of theCompany.
Pursuant to the provisions of Section 129(3) of the the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form No. AOC-1is attached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company at https://www.ihcltata.com/AGM/2021/ AGM-FY2021/.
6. Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY 2020-21.
Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm that:
i. In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe Company for that period;
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. They have prepared the annual accounts on a going concern basis;
v. They have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
7. Directors and Key Managerial Personnel
In accordance with the requirements of the Act and the Company's Articles ofAssociation Mr. Puneet Chhatwal retires by rotation and being eligible offers himselffor re-appointment. Relevant resolutions (Ordinary and Special as applicable) seekingshareholders' approval forms part of the Notice.
Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations
2015 ('SEBI Listing Regulations'). In terms of Regulation 25 (8) of SEBI ListingRegulations they have confirmed that they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence. The Board of directors of the Company has taken on record the declaration andconfirmation submitted by the independent directors after undertaking due assessment ofthe veracity of the same. There has been no change in the circumstances affecting theirstatus as Independent Directors of the Company.
The Independent Directors of the Company have confirmed that they have registered theirnames in the data bank of Independent Directors maintained with the Indian Institute ofCorporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies(Appointment & Qualification of Directors) Rules 2014. The Independent Directors ofthe Company possess the requisite experience and hence shall not be required to pass theonline proficiency self-assessment test as per the proviso to Rule 6(4) of the aforesaidrules.
During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses if any incurred by them for the purpose of attending meetingsof the Board/Committee of the Company.
Recently on March 18 2021 the Ministry of Corporate Affairs had notified theamendments to Sections 149(9) and 197(3) of the Act by the Companies (Amendment) Act 2020to enable companies faced with no profits/ inadequate profits to pay certain fixedremuneration to their Non-Executive Directors (including Independent Directors) inaccordance with the provisions of Schedule V to the Act.
In view of the valuable services being rendered by the Non-Executive Directors(including Independent Directors) to the Company the Board of Directors on therecommendations of the Nomination and Remuneration Committee ('NRC') approved a fixedremuneration to be payable to them for FY 2020-21 2021-22 and 202223 in case of noprofits/ inadequate profits in each of
these years subject to the approval of the Members at this AGM. The details of theremuneration to be paid for the FY 2020-21 are captured in the Corporate GovernanceReport.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2021 are:
Mr. Puneet Chhatwal - Managing Director & Chief Executive Officer
Mr. Giridhar Sanjeevi - Executive Vice President & Chief Financial Officer
Mr. Beejal Desai Senior Vice President - Corporate Affairs & CompanySecretary (Group)
8. Number of Meetings of the Board
Six meetings of the Board were held during the year under review. For details ofmeetings of the Board please refer to the Corporate Governance Report which forms a partof the Annual Report.
9. 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 SEBIListing Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the Board Composition and Structure; Degreeof fulfilment of key responsibilities towards stakeholders (by way of monitoring corporategovernance practices participation in the longterm strategic planning etc.);Effectiveness of board processes information and functioning etc.; Extent ofco-ordination and cohesiveness between the Board and its Committees; and Quality ofrelationship between Board Members and the Management
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of Executive Directors and Non-Executive Directors.
The Board and the NRC reviewed the performance of individual Directors on the basis ofcriteria such as the contribution of the individual Director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued bythe Securities and Exchange Board of India on January 5 2017.
At the Board Meeting that followed the meeting of the Independent Directors and meetingof NRC the performance of the Board its Committees and individual directors was alsodiscussed. Performance evaluation of Independent Directors was done by the entire Boardexcluding the independent director being evaluated.
10. Policy on Directors' Appointment and Remuneration and other Details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available onhttps://www.ihcltata.com/board diversity director attributes.pdf and https://www.ihcltata.com/Remuneration Policy KMP Directors Employees.pdf.
11. Vigil Mechanism
The Company has established the necessary vigil mechanism for directors and employeesin confirmation with Section 177(9) of the Act and Regulation 22 of SEBI ListingRegulations to report concerns about unethical behaviour. The details of the policy havebeen disclosed in the Corporate Governance Report which forms a part of the Annual Reportand is also available on https://www.ihcltata.com/Whistle Blower Policy. pdf.
12. Internal Financial Control Systems and their Adequacy
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which forms a part of the Annual Report.
13. Audit Committee
The details including the composition of the Audit Committee including attendance atthe Meetings and terms of Reference are included in the Corporate Governance Report whichforms a part of the Annual Report.
At the 116th AGM held on August 21 2017 the Members approved appointment ofB S R & Co. LLP ('BSR') Chartered Accountants (Firm Registration No.101248W/W-100022) as Statutory Auditors of the Company to hold office for a period of fiveyears from the conclusion of the 116th AGM till the conclusion of the 121stAGM subject to ratification of their appointment by Members at every AGM if so requiredunder the Act. The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
15. Corporate Social Responsibility
The Company has revised the policy on Corporate Social Responsibility ('CSR') toinclude changes based on Companies (Corporate Social Responsibility Policy) AmendmentRules 2021 and the revised policy was recommended by the CSR and Sustainability Committeeand approved by the Board and the same can be accessed on the Company's website athttps://www. ihcltata.com/CSR Policy.pdf.
The brief outline of the CSR policy of the Company and the initiatives undertaken bythe Company on CSR activities during the year under review are set out in Annexure I ofthis report in the format prescribed in the Companies (Corporate Social ResponsibilityPolicy)
Amendment Rules 2021. For other details regarding the CSR and the SustainabilityCommittee please refer to the Corporate Governance Report which is a part of thisreport.
16. Auditor's Report and Secretarial Audit Report
The Statutory Auditor's Report and the Secretarial Auditor's Report do not contain anyqualifications reservations or adverse remarks or disclaimer.
Secretarial Auditor's Report is attached to this report as Annexure II.
17. Risk Management
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Risk Managementsection which forms a part of the Annual Report.
18. Particulars of Loans Guarantees or Investments
Your Company falls within the scope of the definition "infrastructurecompany" as provided by the Act. Accordingly the Company is exempt from theprovisions of Section 186 of the Act with regards to Loans Guarantees Securitiesprovided and Investments. Therefore no details are provided.
19. Related Party Transactions
In line with the requirements of the Act and the SEBI Listing Regulations the Companyhas formulated a Policy on Related Party Transactions and the same can be accessed on theCompany's website at https://www.ihcltata.com/RPT.pdf.
During the year under review all Related Party > Transactions that were enteredinto were in the
F Ordinary Course of Business and at Arms' Length Basis.
All transactions entered into with related parties were approved by the AuditCommittee.
l Further in the FY 2020-21 there were no material transactions of the Company withany of its related parties. Therefore the disclosure of Related Party Transactions asrequired under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Companyfor the FY 2020-21 and hence the same is not provided.
20. Annual Return
As provided under Section 92(3) and 134(3)(a) of the Act I read with Rule 12 ofChapter VII Rules of the Companies
(Management and Administration) Amendment Rules . 2020 Annual Return in Form MGT-7for FY 2020-21 is uploaded on the website of the Company and can be l accessed athttps://www.ihcltata.com/AGM/2021/ _ AGM-FY2021/.
21. Particulars of Employees
The information required under Section 197 of the Act read with Rule 5 of the Companies(Appointment and ; Remuneration of Managerial Personnel) Rules 2014 is appended asAnnexure III to this report.
The statement containing names of top ten employees Rs in terms of remuneration drawnand the particulars of employees as required under Section 197(12) of the Act read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate annexure forming part of this report. Further thereport and the accounts are being sent to the Members excluding the aforesaid annexure. Interms of Section 136 of the Act the said annexure is open for I inspection and any Memberinterested in obtaining a I copy of the same may write to the Company Secretary.
22. Disclosure Requirements
As per SEBI Listing Regulations the Corporate Governance Report with the PracticingCompany
Secretary's Certificate thereon and the Management Discussion and Analysis areattached as a separate section which forms a part of the Annual Report.
As per Regulation 34 of the SEBI Listing Regulations the Business ResponsibilityReport forms a part of the Annual Report.
As per Regulation 43A of the SEBI Listing Regulations the Dividend Distribution Policyis disclosed in the Corporate Governance Report and is uploaded on the Company's websiteat https://www.ihcltata.com/ Dividend Distribution Policy.pdf.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
23. Deposits from Public
The Company does not accept and/or renew Fixed Deposits from the general public andshareholders. There were no over dues on account of principal or interest on publicdeposits other than the unclaimed deposits at the end of FY 2020-21 which is ' 45000/-(Previous year ' 260000/-).
24. Particulars of Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo [Pursuant to Companies (Accounts) Rules 2014]
A. Conservation of Energy: The Company has a longstanding history of stewardshipthrough efficient management of all its assets and resources. The Company's consciousefforts are aligned with the Tata ethos of keeping communities and environment at theheart of doing business. In line with IHCL's commitment to safeguard the environment wehave been the flagbearers of responsible tourism through elimination of two millionplastic straws across all our properties. Our renewable energy proportion has improved to
22% from 7% in the past five years. In this rapidly transforming world oursustainability goals will certainly evolve as our industry grow and as per the needsarising in the society.
B. Technology Absorption: There is no material information on technology absorption tobe furnished. The Company continues to adopt and use the latest technologies to improvethe efficiency and effectiveness of its business operations.
C. Foreign Exchange Earnings and Outgo:
Earnings : ' 56.74 crores
Outgo : ' 47.32 crores
25. Material changes and commitment affecting the financial position of the Company
The impact of COVID-19 on the Company's financial statements has been given in Note2(d) of the notes to financial statements for the year ended March 31 2021 and theCompany's response to the situation arising from the pandemic has been explained in theManagement Discussion and Analysis which forms a part of the Annual Report.
26. Significant and material orders passed by the regulators
During the year under review no significant material orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and the Company'soperations. However Members' attention is drawn to the Statement on ContingentLiabilities and Commitments in the Notes forming part of the Financial Statement.
27. Cost Auditors
Maintenance of cost records as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company.
28. Disclosures in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (POSH Act)
The Company has always believed in providing a safe and harassment-free workplace forevery individual working in the Company. The Company has complied with the applicableprovisions of the POSH Act and the rules framed thereunder including constitution of theInternal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policyin line with the requirements of the POSH Act and the same is available on the Company'swebsite at https://www.ihcltata. com/POSH Policy.pdf.
Status of complaints as on March 31 2021
|Sl. No. ||Particulars ||Number of Complaints |
|i. ||Number of complaints filed during the financial year ||9 |
|2. ||Number of complaints disposed off during the financial year ||8 |
|3. ||Number of complaints pending at the end of the financial year ||1 |
29. Integrated Report
With the corporate landscape rapidly evolving Integrated Reporting has been an idealtool to explore value creation. The Company being one of the top companies in the countryin terms of market capitalisation has voluntarily provided Integrated Report whichencompasses both financial and non-financial information to enable the Members to takewell informed decisions and have a better understanding of the Company's long-termperspective.
The Company has progressed in the journey of Integrated Reporting and is focused ondriving more authentic comprehensive and meaningful information about all aspects of theCompany's performance and value creation story delivering benefits for both internal andexternal stakeholders.
The Report also touches upon aspects such as organisation's strategy governanceframework performance and prospects of value creation based on the six forms of capitalviz. financial capital manufactured capital intellectual capital human capital socialand relationship capital and natural capital.
The Directors thank the Company's customers vendors investors and academic partnersfor their continuous support.
The Directors also thank the Government of India Governments of various states inIndia Governments of various countries and concerned Government departments and agenciesfor their co-operation.
The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
The Directors appreciate and value the contribution made by all our employees and theirfamilies and the contribution made by every other member of the IHCL family for makingthe Company what it is.
| ||On behalf of the Board of Directors |
| ||N. Chandrasekaran |
| ||Chairman |
|Mumbai April 30 2021 ||(DIN:00121863) |