To the Members:
The Directors have pleasure in presenting the Thirty-sixth Annual
Report, together with the Balance Sheet and Statement of Profit and
Loss for the year ended 31st December, 2012.
Rs. in Million except Earnings Per Share
Year ended Year ended
2012 31st December
Total Revenue 3864 3568
Profit before Tax 738 829
Provision for Taxation 252 263
(Write back)/ Provision for Deferred Taxation (6) 6
Profit after Taxation 492 559
Transferred to General Reserve 49 56
Proposed Dividend 80 80
Earnings Per Share - Basic (per equity
share of Rs. 1/- each) 2.31 2.64
Earnings Per Share - Diluted (per equity
share of Rs. 1/- each) 2.26 2.57
Operations & Results
The Travel and Tourism Industry has recovered following the last
economic recession, which saw falling demand for tourism activity as
consumers postponed trips to concentrate their budgets on more
essential areas. Inbound tourism market has expanded due to efforts of
government to promote tourist attractions in India. Your Company
expanded its Foreign Exchange and Travel distribution network by
opening several new stores and appointing new franchisees across the
country and launched an array of new products to meet a wide range of
customer needs. These new products are targeted at new customer
Your Company continued focus on acquiring new clients and strived to
provide un-paralleled customer service along with a suite of products.
The efforts to fortify the structure will continue in the coming year
as will cost management through efficiency and productivity improvement
leading to bottom-line growth.
Your Company recorded total revenue of Rs. 3864 million and profit
before tax of Rs. 738 million with profit after tax being Rs. 492
million for the year ended 31st December 2012. The basic earning per
share of the Company is Rs. 2.31.
Thomas Cook Presence
As of December 2012 end, your Company, along with its subsidiaries,
continues to be among the largest integrated travel group in India. It
operates through over 253 locations by way of its own branches, and
additional presence by way of Preferred Sales Agents (PSA''s) and
Franchisee Offices. Your Company has 158 branches located in 78 cities,
169 PSAs and 124 Gold Circle Partner outlets to have a wider spread and
network across the country.
Your Company also has presence in 5 countries outside India through our
branches/ representative offices in USA (New York), Spain (Barcelona &
Madrid), UK (London), Japan (Tokyo) and Germany (Frankfurt), apart from
its subsidiaries in Mauritius and Sri Lanka.
Share Capital Structure
The share capital structure as of 19th February, 2013 is as follows:
Authorised Capital: Rupees Rupees
345827060 Equity Shares of Rs. 1/- each 345,827,060
(i) 114760000 Class ''A'' 4.65%
Cumulative Non-Convertible Redeemable
Preference Shares of Rs. 10/- each 1,147,600,000
(ii) 355294 Class ''B'' 0.001%
Cumulative Convertible / Redeemable
Preference Shares of Rs. 10/- each 3,552,940
(iii) 302000 Class ''C'' 0.001%
Cumulative Convertible / Redeemable
Preference Shares of Rs. 10/- each 3,020,000
(iv) 125000000 1% Cumulative
Non-Convertible Redeemable Preference
Shares of Rs. 10/- each 1,250,000,000
Issued, Subscribed and Paid-up Capital:
213158694 Equity Shares of Rs. 1/- each 213,158,694
(i) 319765 Class ''B'' 0.001%
Cumulative Convertible / Redeemable
Preference Shares of Rs. 10/- each 3,197,650
(ii) 271800 Class ''C'' 0.001%
Cumulative Convertible / Redeemable
Preference Shares of Rs. 10/- each 2,718,000
Employees Stock Option Plans (ESOPs)
With the objective of motivating and retaining key talent in the
organisation and fostering ownership, your Company has framed the
Thomas Cook Employees Stock Option Plan 2007 and pursuant to the same,
has granted stock options to its employees over the years.
The Company has also introduced the Thomas Cook Save As You Earn Scheme
2010 (SAYE Scheme 2010) with similar objectives. SAYE Scheme 2010
allows employees to save a part of their net pay every month which gets
deposited with a bank in a recurring deposit account carrying fixed
rate of interest. At the end of 3 years, employees have the option to
either purchase specific number of equity shares of the Company at the
predetermined Exercise Price or withdraw the Monthly Savings
Contributions alongwith Interest accrued.
During the year 2012, no options were approved for grant under the
Thomas Cook Employees Stock Option Plan 2007 and SAYE Scheme 2010.
The Recruitment & Remuneration Committee administers and monitors the
schemes. The applicable disclosures under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 (the Guidelines) are mentioned in the
Annexure to the Directors'' Report.
During the year, no senior managerial personnel or any other employee
has received options exceeding 5% of the value of the options granted.
Further, no employee has received options equal to or exceeding 1% of
the issued capital of the Company at the time of grant during the year.
Your Directors recommend dividend on the Class ''B'' & Class ''C''
Preference shares as per their terms, i.e. 0.001% (Rs. 0.0001 per share
of Rs. 10/- each) on the preference shares respectively. The Directors
are also pleased to recommend a dividend of 37.5% (Rs. 0.375 per share
of Rs. 1/- each) on the equity share capital.
The proposed dividend on the equity capital and preference capital
absorbs Rs. 80 million for dividend and Rs. 13 million for Dividend
Tax. The Board seeks the approval of the shareholders to the dividend
recommended on the preference and equity share capital as is
outstanding on the date of book closure/ record date.
Your Directors have resolved to transfer Rs. 49 million to General
Reserve out of the profits of the Company. With the transfer, the total
reserves stand at Rs. 3766 million as at 31st December 2012.
Directors'' Responsibility Statement
The Directors would like to assure the Members that the financial
statements for the year under review conform in their entirety to the
requirements of the Companies Act, 1956 pursuant to Section 217 (2AA)
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
2. the Directors have selected such accounting policies and applied
them consistently except where otherwise stated in the notes to the
accounts and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for that period;
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities. The internal auditors have conducted periodic audits to
provide reasonable assurances that established policies and procedures
of the Company have been followed. However, it must be recognised that
there are inherent limitations in weighing the assurances provided by
any system on internal controls;
4. the Directors have prepared the annual accounts on a going concern
Fairfax Financial Holdings Limited
The current promoter of your Company, Fairbridge Capital (Mauritius)
Limited is a 100 % step down subsidiary of Fairfax Financial Holdings
Limited, (Fairfax), a Toronto based financial services holding
company with a global presence in insurance and reinsurance and a
portfolio of assets in excess of billion invested worldwide. The
Company founded in 1985 by the present Chairman and Chief Executive
Officer, Mr. Prem Watsa, has over the past 25 years, demonstrated a
strong financial track record to achieve an annual appreciation in Book
Value per share of 24.7% annually. Fairfax is listed on Toronto Stock
Fairfax has 20 general insurance subsidiaries and joint ventures
globally, including ICICI Lombard (India). The portfolio also includes
several market leading insurance companies such as Odyssey Re (USA),
Crum & Forster (USA), First Capital (Singapore), Fairfax Brasil
(Brazil), Gulf Insurance (Kuwait).
Fairfax is engaged in long term investments from its own resources,
with a focus to deliver long term capital appreciation through a
flexible and value oriented approach.
Thomas Cook (India) Limited is a part of Fairfax group. As on date, the
promoter holds 87.10% of the total paid up equity share capital of the
Thomas Cook (India) Limited
Operations in India [including subsidiaries]
The year 2012 saw the overall Foreign Exchange volumes increase by 5.7%
despite the uncertainty that surrounded the Rupee for most part of the
year. The year saw appreciable growth of our portfolio of retail
products. The strong leisure travel trends for both group and
individual travel business and the outreach program with channel
partners helped growth in the Holiday business. With change of visa
norms in the UK, the student business was sluggish but with more
students going to Australia and Canada things improved towards the end
of the year. The ''Maintenance of close relatives'' was another product
which saw tremendous growth on account of channel activation and
awareness creation through marketing, with volume growth upwards of
Corporates remained cautious while spending on travel and foreign
exchange. Your Company continued focus on acquisition of new clients
and strived to provide un-paralleled customer service along with a
suite of products, which led to a moderate increase of 9% in volumes.
Your Company maintained its lead in the thought leadership through the
successful launch of its 2nd White Paper on Convergence of Travel &
Technology, in 3 cities across India. Despite intense competition
amongst large and smaller players in the Corporate Travel business, the
topline grew by 15%; although while the higher airfares give a
perception of increased sales, in actual fact, the number of
International transactions remained flat, and the domestic tickets have
declined (this is in line with DGCA trend of domestic transactions as
well). It can be thus inferred that travel was inevitable for some, and
big companies with financial muscle continued to travel while the
smaller ones have restricted their travel during 2012. Higher fares
this year have distorted travel budgets of some customers, and to
offset that some corporations have reduced internal travel.
In the light of handsome growth in the insurance sector, the Company
continues its focus on Travel insurance. With the strategy of being a
complete travel solution provider, the insurance arm of Thomas Cook
tries to understand the specific needs of the customers and offers the
best product which suite the requirement. It helps us in garnering
higher share of wallet and building customer loyalty.
Continued negotiation with service providers has helped our Company
protect margins in the Inbound business. The increase in total ticketed
volume for the combined travel businesses enables us by increasing our
bargaining power with service providers to offer competitive
products/prices. Costs are kept under a tight control, along with
several initiatives to increase productivity. To improve efficiency and
promote growth, our Company restructured the inbound sales and
With technology being the main driver, the Company will also be in a
position to do an intelligent cross sell to the existing as well as
newly acquired customer base and drive efficiencies.
MICE offers a potential for high revenue earnings but corporate clients
have reduced MICE related activities due to rising airline fares, hotel
fares etc., which has caused a significant overall increase in cost of
these activities. Competition in this sector and budget constraints
have limited the destination options. Despite these challenges, our
Company has witnessed an overall growth in MICE revenue by tapping new
markets and serving new clients.
Visa and Passport Business, the four-year old vertical of your Company
with over 0.15 million transactions in the year is growing from
strength to strength. Apart from catering to the Travel Businesses of
your Company, it has added direct external customers for their visa,
passport and ancillary services [Attestations, Legalization, Apostille,
Translation, Notarization of documents, Foreigners Regional
Registration Office (FRRO) registration/ visa extension/ exit permit,
procures People of Indian Origin (PIO) / Overseas Citizen of India
(OCI) cards]. Additionally, Your Company has tied up with attorneys to
service the long-term immigration visas/ work permits required by
corporates for their projects abroad to move their resources to these
The content site developed by the business has now been packaged and is
being promoted and sold as a reckoner to the travel industry and is
also being shared with internal businesses for visa information.
Informative and rich in content, it facilitates travellers who wish to
apply for visas and provides detailed information to intermediary
customers and agents. It also has an online tracker enabling tracking
the documents through its various stages of processing.
Operations in Mauritius
The recession in European countries which directly impacted the tourist
inflow into the country also reduced spending of foreign travelers
impacting the retail part of the business. The fall of EURO against USD
to 1.23 in the mid of the year affected the overall Foreign Exchange
Thomas Cook Mauritius has consolidated all its operations by
rationalization of branches, controls have been beefed up, processes
have been strengthened to cater to the future expansion plans of the
organization. Mauritius operations consist of 15 branches across the
island and we have expansion plans in high end shopping malls this
year, which will increase retail footprint of foreign tourists and
local customers. We have adopted a systematic approach to training on
the area of concern to improve the productivity of staff. The company
has embarked on a major process restructuring and cost control
Operations in Sri Lanka
2012 brings the commencement of expansion plan for Sri Lanka Thomas
Cook operations, wherein Thomas Cook Sri Lanka Branch business was
transferred to a newly incorporated company styled as Thomas Cook
Lanka (Private) Limited. The Company has outlets both at the Arrival
and Departure terminals at the Bandaranaike International Airport. With
political stability returning to Sri Lanka, Thomas Cook Lanka (Private)
Limited intends to further expand its operations.
Thomas Cook Lanka (Private) Limited serves as an investment vehicle for
any proposed future investments into Sri Lanka subject to requisite
Awards and Accolades
Thomas Cook (India) Limited has been the recipient of the following
highly prestigious awards and accolades in 2012:
* The Most Trusted Brand in travel services by The Brand Trust
Report™, India study 2012
* Favourite Specialist Tour Operator at the Conde Nast Traveller
Readers'' Travel Awards 2012.
* Best Corporate Travel Management Company by World Travel Brands 2012
* Consumer Superbrand 2011-2012 by Superbrands for ''Travel
* Centre of Learning has received IATA accreditation as Top 10 South
Asia IATA Authorized Training Centers, 2012
In accordance with Article 131 of the Articles of Association of the
Company, Mr. M. K. Sharma, Mr. Ramesh Savoor and Mr. Krishnan
Ramachandran, retire by rotation and being eligible, offer themselves
for re-appointment to the Board.
Mr. Chandran Ratnaswami, Mr. Harsha Raghvan, Mr. Uday Khanna and Mrs.
Kishori Udeshi were appointed as Additional Directors with effect from
22nd August, 2012, 22nd August, 2012, 29th October, 2012 and 25th
January, 2013 respectively. As Additional Directors, they hold office
upto the date of the ensuing Annual General Meeting of the Company at
which they are being proposed for regularisation.
The above appointments/ re-appointments form part of the Notice of the
Thirty-sixth Annual General Meeting and the relevant Resolutions are
recommended for your approval.
Profiles of these Directors, as required by the Listing Agreement
provisions, are given in the Corporate Governance Report forming part
of this Annual Report/ Notice.
During the period, Mr. Rakshit Desai, Mr. Vinayak Purohit, Mr. Hoshang
Billimoria and Mr. Anant Rajwade resigned as Directors of the Company.
The Board places on record its sincere appreciation for the
contribution made by these Directors during their tenure as Directors
of the Company.
M/s. Lovelock & Lewes, Chartered Accountants, Firm Registration
No.301056E, Auditors of the Company who retire at the forthcoming
Annual General Meeting are eligible for re-appointment and have
expressed their willingness to accept office, if re-appointed. They
have given a certificate to the effect that the re-appointment, if
made, would be within the limits prescribed under Section 224(1B) of
the Companies Act, 1956. Your Directors recommend their re-
Pursuant to the provisions of Section 212 of the Companies Act, 1956,
the Ministry of Corporate Affairs vide its circular dated February 8th,
2011, has granted general exemption from attaching the Balance Sheet,
Profit and Loss Account and other documents of the subsidiary companies
with the Balance Sheet of the Company. Accordingly, the said documents
are not being attached with the Balance Sheet of the Company. A
statement containing brief financial details of the Company''s
Subsidiaries is contained elsewhere in the Annual Report. The annual
accounts of these subsidiaries and the related detailed information
will be made available to any member of the Company/ its subsidiaries
seeking such information at any point of time and are also available
for inspection by any member of the Company/ its subsidiaries at the
registered office of the Company and that of the respective subsidiary
companies. The Company shall furnish a copy of details of annual
accounts of subsidiaries to any member on demand.
Further, pursuant to the approval of Reserve Bank of India and as per
the requirements and approval of the Central Bank of Sri Lanka, Thomas
Cook (India) Limited has incorporated a Wholly Owned Subsidiary (WOS)
in Sri Lanka styled, Thomas Cook Lanka (Private) Limited on 20th April,
2012, for the purpose of transfer of branch business in Sri Lanka. With
effect from 1st August, 2012, the Company has transferred its Sri Lanka
branch business to its WOS, Thomas Cook Lanka (Private) Limited.
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Your Company being in the Travel and Tourism industry, its activities
do not involve any expenditure on Technology and Research and
Development and, therefore, the other particulars in the Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 are not required to be submitted.
During the year, the foreign exchange earnings (on a standalone basis)
amounted to Rs. 462 million, whereas, the Company has incurred Rs. 88
million as expenditure in foreign currencies towards interest, bank
charges, licence fees, professional fees, travelling, subscriptions,
etc., as disclosed in Note 31 in the Notes to the accounts.
During the year, Travel Corporation (India) Limited, a subsidiary, also
earned Foreign Exchange amounting to Rs. 1372 million and incurred Rs.
41 million towards salary, legal & professional fees, travelling, etc.
including expenditure incurred by foreign branches.
Your Company has not accepted deposits from the Public within the
meaning of Section 58A of the Companies Act, 1956 and Rules framed
thereunder and as such no amount was outstanding on the date of the
Listing of Shares
Your Company is listed on two Stock Exchanges in India viz. BSE
Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.
The Company has paid the Listing Fees to both the Stock Exchanges for
the Financial Year 2012-2013.
Relations with the employees continued to be cordial throughout the
year. Your Directors place on record their appreciation of the efforts,
dedication, commendable teamwork and exemplary contribution of the
employees in the various initiatives of the Company and contributing to
the performance of the Company during the year under review.
Special mention needs to be made of the co-operation received from the
Employees'' Unions of Thomas Cook (India) Limited and Travel
Corporation (India) Limited.
Information pursuant to Section 217(2A) of the Companies Act, 1956
The particulars required under Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, forms part of this Report and have been annexed herewith.
Your Company continues to be committed to good corporate governance
aligned with the best corporate practices. It has also complied with
various standards set out by Securities and Exchange Board of India and
the Stock Exchanges where it is listed. The Management Discussion and
Analysis Report forms part of this Annual Report.
For the year ended 31st December, 2012, your Company has complied with
the requirements of Clause 49 of the Listing Agreement and other
applicable rules and regulations with respect to Corporate Governance.
A certificate from a Practising Company Secretary obtained by the
Company regarding such compliance of conditions of Corporate Governance
is attached to this report.
Your Directors thank all the Shareholders, Customers, Vendors for their
continued support throughout the year. We also thank Reserve Bank of
India and other Banks, Ministry of Tourism, Financial Institutions,
Government of India, State Governments, and other Government agencies
for the support extended by them and also look forward to their
continued support in future.
Your Directors also wish to place on record their appreciation of the
contribution made by the Company''s employees at all levels but for
whose hard work, solidarity and support your Company''s consistent
growth would not have been possible.
FOR AND ON BEHALF OF THE BOARD
M. K. SHARMA MADHAVAN MENON
Chairman Managing Director
Dated: 19th February, 2013