Indian Hotels Company

1.  (a) The Taj Mahal Palace & Tower in Mumbai was attacked by
 terrorists on November 26,2008 amongst the other targets in the city,
 due to which the heritage wing of the property was severely damaged. No
 adjustments have been carried out in the books of account of the
 Company, with regard to the value of the damage to property, as the
 Company is adequately insured for property restoration under its
 insurance policy. The Company is also insured for Loss of Profits to
 cover the period of interruption for up to 12 months from the date of
 the incident.  Accordingly, the Company has recognised a claim for
 Business Interruption upto March 31,2009, amounting to Rs. 85.54 crores
 on an estimated basis and is at an advanced stage of finalising the
 claim with the Insurers.
 
 (b) Exceptional item of Rs 6.21 crores pertains to annuities purchased
 from me Life Insurance Corporation of India for pension payments to
 legal heirs of the employees deceased in the above mentioned incident.
 
 2.  Rights Issue of Simultaneous but unlinked issue of Equity Shares
 and Non-Convertible Debentures with Detachable Warrants to the equity
 shareholders of the Company
 
 During the year, the Company completed its simultaneous but unlinked
 issue of Equity Shares at a price of Rs. 70 each and 6,02,76,898, 6%
 Non-Convertible Debentures with Detachable Warrants aggregating Rs.
 1,446.65 crores.
 
 The warrant holders can exercise their right to apply for the Equity
 Shares at the Exercise Price of Rs. 150 at any time during the Warrant
 Exercise Period i.e. September, 2009. Consequently, the Share Capital
 of the Company increased from Rs.  60.29 crores to Rs. 72.34 crores on
 allotment of 120,553,795 Equity Shares. The expenditure of Rs. 7.04
 crores (net of tax of Rs. 1.08 crores) in connection with the Rights
 Issue has been set off against the Securities Premium Account in
 accordance with Section 78 of the Companies Act, 1956.
 
 3.  Shareholders Deposits placed with a subsidiary company include Rs.
 168.70 crores (equivalent to USD 33.110 million) [(previous year
 Rs.135.20 crores) (equivalent to USD 33.784 million)] placed in earlier
 years, with the Company retaining the right to convert the said
 deposits into equity by December 31,2009, 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 10.44
 million, that it will not dilute its shareholding in its subsidiary,
 IHMS (Australia) Pty Limited.
 
 (b) The Company has given a letter of comfort to Standard Chartered
 Bank, Singapore, in respect of credit facilities of US $ 150 Million
 given to its wholly-owned subsidiary Samsara Properties Ltd, British
 Virgin Islands, that it will not dilute its shareholding in its
 subsidiary, Samsara Properties Ltd.
 
 5.  Benefits arising out of Duty Free Scrips, utilised for the
 acquisition of fixed assets are, with effect from April 1,2008, being
 adjusted against the cost of the related asset, as against the practice
 hitherto followed of recognising the same as income. Consequent upon
 the change, miscellaneous income for the year is lower by Rs. 17.90
 crores, with a corresponding deduction in the value of fixed assets, as
 also reduction in the depreciation thereon.
 
 6.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for is Rs. 351.29 crores (previous year - Rs.
 194.56 crores).
 
 7.  Contingent Liabilities:
 
 (a) On account of Income Tax matters in dispute :
 
 i. In respect of matters, which have been decided in the Companys
 favour by the Appellate Authorities, where the Income Tax Department
 has preferred an appeal - Rs. 57.01 crores (previous year - Rs. 63.60
 crores).
 
 ii..  In respect of other matters for which Companys appeals are
 pending - Rs. 21.67 crores (previous year - Rs. 34.55 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. 0.32 crore (previous year - Rs. 0.42 crore).
 
 ii.  Entertainment tax - Rs. 0.53 crore (previous year - Rs. 0.53
 crore).
 
 iii.  Sales tax - Rs. 6.22 crores (previous year - Rs. 4.04 crores).
 
 iv.  Property tax - Rs. 6.77 crores (previous year - Rs. 6.39 crores).
 
 v.  Stamp Duty - Rs. 2.34 crores (previous year - Rs. 2.34 crores)
 
 vi.  Others - Rs. 8.17 crores (previous year - Rs. 7.81 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 Kolkata, West
 Bengal, 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.
 90.14 crores (previous year - Rs. 56.67 crores) mainly pertains to the
 demand of Rs. 22.32 crores, raised by the Delhi Development Authority,
 towards additional License fees (previous year - Rs. 17.14 crores) and
 additional ground rent amounting to Rs. 67.82 crores (previous year -
 Rs 39.16 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 31,2009
 - Rs. 463.27 crores (previous year - Rs. 308.14 crores).
 
 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 31,2008 and 2009 have been recognised over the shorter of
 the maturity period or March 31, 2011. The unamortised balance as at
 the year end is presented as Foreign Currency Monetary Item
 Translation Difference Account. Accordingly an amount of Rs. 3.82
 crores has been adjusted from the General Reserve and an aggregate
 amount of Rs. 11.63 crores has been deferred and recognised as an
 asset. Consequently, the profit of the current year is higher by Rs.
 15.45 crores.
 
 9. 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,.
 
 10.  Remittance in Foreign Currencies for dividends to non-resident
 shareholders:
 
 The Company has not remitted any amount in foreign currencies on
 account of dividends during the year and does not have information as
 to the extent to which remittances, if any, in foreign currencies on
 account of dividends have been made by/on behalf of non-resident
 shareholders. The particulars of dividends paid to non-resident
 shareholders during the year, are as under:
 
 11.  The Company has an investment of Rs. 0.30 crore (previous year -
 Rs. 0.30 crore) and advances outstanding (including interest) of Rs.
 9.42 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 TKHRLs 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.
 
 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.  Provision for Loyalty Programmes:
 
 The Company has loyalty programmes, which enable its customers to
 accumulate points based on their spends at the hotels. Such points can
 be encashed either by stay at the Companys hotels or by purchase of
 merchandise. The estimated liability against the loyalty schemes is as
 under:
 
 14.  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.
 
 15. The Companys only business is hoteliering and hence disclosure of
 segment-wise information is not applicable under Accounting Standard 17
 - Segmental Information (AS-17) notified by the Companys (Accounting
 Standards) Rules, 2006. There is no geographical segment to be reported
 since all the operations are undertaken in India.
 
 16.  Previous years figures have been regrouped, wherever necessary,
 to conform to the current years presentation.