The Directors have pleasure in presenting the Thirty-fourth Annual
Report, together with the Balance Sheet and Profit and Loss Account for
the year ended 31st December, 2010.
Rupees in Million
Year ended Year ended
31st December, 2010 31st December, 2009
Revenues 2792 2247
Profit before Taxation and
Exceptional Items 532 341
Exceptional Items 100 --
Profit after Exceptional item and
before Tax 632 341
Provision for Taxation 209 114
Provision for Deferred Taxation 8 4
Provision for Fringe Benefit Tax - 1
Profit after Taxation 415 222
Transferred from Reserve U/sec.
80 HHD of the Income Tax Act, 1961 15 15
Transferred to General Reserve 42 22
Proposed Dividend * 79 80
EPS (Basic) after exceptional items 1.96 1.06
EPS (Diluted) after exceptional
items 1.91 1.03
* Includes preference share dividend Operations and Results
The year 2010 saw a revival in the general economy as well as the
tourism industry. A strong GDP growth and the rising stock indices,
coupled with positive outlook and the resurgence of suppressed demand,
helped boost travel and tourism sector in 2010.
The demand for leisure holidays increased due to receding recessionary
pressures, economic revival and return of confidence in Indian
consumers. Despite the challenges faced last year in terms of a slow
economy, sluggish demand and security concerns, the country was
fighting back and tourism developments were taking place. Although
there could be some short- to medium-term setbacks, the long- term
outlook remains positive.
With Indian economy growing at around 8% per annum and rise in
disposable incomes of Indians, an increasing number of people are going
on holiday trips within the country and abroad resulting in the tourism
industry growing wings. 2010 saw a revival in foreign tourist arrivals
after the slump last year on account of the slowdown with a growth rate
of 8% as compared to a de-growth of 2.2 % in 2009.
The year 2010 witnessed rupee appreciation against major currencies.
The buoyant market conditions helped financial services of the Company
grow by 8% in volumes over 2009 despite the fact that rupee
appreciation created a challenging trading environment for the
wholesale forex volumes.
Despite the constraints faced such as the volcanic eruption in Iceland
and consequential ash cloud formation over UK & Europe, and heavy
snowfall in the USA and UK, which disrupted air traffic, your Company
overcame the difficult situation to report an increase in revenues by Rs.
539 million to Rs. 2792 million. Profit before Taxation and exceptional
items increased to Rs. 532 million from Rs. 341 million.
Your Company recorded turnover of Rs. 2792 million and profit before tax
and exceptional item of Rs. 532 million with profit after tax being Rs. 415
million for the year ended 31st December, 2010. The basic earning per
share of the Company is Rs. 1.96.
Thomas Cook Presence
As of December 2010 end, Thomas Cook (India) Limited, alongwith its
subsidiaries, continues to be the largest integrated travel group in
India with over 180 locations by way of its own branches, and
additional presence by way of Preferred Sales Agents (PSAs) and
Franchisee Offices. We have 180 branches located in 72 cities, 184
PSAs in India, 14 in overseas market and around 72 Franchisee Offices
across India to have a wider spread and network across the country.
We also have presence in 6 countries outside of India through our
representative offices in USA (New York), Spain (Barcelona and Madrid),
UK (London), Japan (Tokyo), Germany (Frankfurt) and Nepal (Kathmandu),
apart from our subsidiaries in Mauritius and Branch offices in Sri
Lanka.
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 with the approval of
the shareholders in December 2010 by means of a Postal Ballot. 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.
The Recruitment and 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.
Except for senior managerial personnel and two other employees, none of
the other employees have received options exceeding 5% of the value of
the options issued during the year ending December 2010. Likewise,
during the year, no employee has been granted stock options equal to or
exceeding 1% of the issued capital of the Company at the time of grant.
Dividend
Your Directors recommend dividend on the Class B and 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. 79 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.
General Reserve
Your Directors have resolved to transfer Rs. 42 million to General
Reserve out of the profits of the Company. With the transfer, the total
reserves stand at Rs. 2846 million as at 31st December, 2010.
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)
and that:
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
basis.
Promoters
Thomas Cook Group pic
Thomas Cook Group pic is a leading international leisure travel group,
created by the merger of MyTravel Group pic and Thomas Cook AG in June
2007. Thomas Cook Group pic is a fully listed company on the London
Stock Exchange.
Thomas Cook (India) Limited is a part of Thomas Cook Group. It remains
as a subsidiary of TCIM Limited, an unlisted private company,
incorporated under the laws of England and Wales having its Registered
Office at Peterborough, England, U.K. and holding 55.77% of the post
ESOP Issue paid-up equity share capital of the Company. Thomas Cook UK
Limited (TCUK) apart from holding 21.41% of the post ESOP Issue paid-up
equity share capital of the Company, also holds 100% holding in TCIM
Limited. Thus, TCUK indirectly holds 77.18% of the present paid-up
equity share capital of the Company.
Promoter Group
Pursuant to intimation from the promoters, the name of the Promoters
and entities comprising the group are disclosed hereinbelow for the
purpose of Regulation 3(1 )(e)(i) of the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997, and they include the following:
Group
Airtours the Holidaymakers Limited
Thomas Cook Group UK Limited (erstwhile Blue Sea Investments Limited)
Blue Sea Overseas Investments Limited
My Travel Group pic
My Travel UK Limited
Sandbrook Overseas Investments Limited
Sandbrook UK Investments Limited
TCIM Limited
Thomas Cook Continental Holdings Limited
Thomas Cook Group pic
Thomas Cook Investments (1) Limited
Thomas Cook Investments (2) Limited
Thomas Cook Overseas Limited
Thomas Cook Scheduled Tour Operations Limited
Thomas Cook Tour Operations Limited
Thomas Cook UK Limited
Thomas Cook (India) Limited
Operations in India [including subsidiaries]
The businesses have shown a recovery due to economic revival and return
of confidence in Indian consumers.
During the year, new products targeted at new destinations and new
customer segments were launched. The Company launched television
commercials and was one of the sponsors of Mumbai Indians, a cricket
team which is part of the Indian Premier League. During the year, the
Company also launched Readymade Holidays, a holiday package box
available through any of our network and channel partners. These are
pre-packaged holidays for both domestic and international selected
destinations. The Company expanded its Gold Circle Partners (GCPs)
across India. The Company continued to build on the success of the
media plan launched under the new Holidaywallas campaign in 2009.
The improved demand for foreign exchange coupled with the initiatives
that were taken by your Company such as new branches opened, new
counters at Delhi and Mumbai airport, post office tie-up, etc. enabled
your Company to improve the retail volumes over 2009. With over 1.2
million transactions handled in 2010, your Company is one of the
largest exporters in the world for bank notes. It handles majority of
Indias foreign currency bank notes. Your Company is in the process of
tie-up with various principal agents worldwide for the remittance
business. In this direction, it has signed Sub Agency agreement with
UAE Exchange, Second largest inward remittance service in India and
largest service provider in the Gulf Markets.
The new - look of the Thomas Cook portal was also launched during the
year. All Thomas Cook products are available through the portal with
more user-friendly applications. Your Company is focusing on building
the product range on the portal to capitalize on the growing
e-business.
Operations in Mauritius
Mauritius has been facing a situation of appreciating currency which is
impacting the foreign exchange business volumes. Inflation rate being
at 2%, the Mauritian economy has seen major consequences of the global
financial crisis, especially in its tourism sector and export oriented
industries. With the support of Government funded stimulus packages,
the loss of jobs effect has been contained and all indicators are
pointing towards a further difficult year ahead.
In spite of the exchange rate impact to an estimated 18%, the customer
base has increased and the company has gained further improved
visibility in the market and has become a reference. With Mauritius
seen as a major tourist destination and the Governments inclination to
diversify its tourism base from a traditionally European base to
include the Asian markets, Thomas Cook Mauritius will be focussing on
seizing this opportunity and enhance the contribution from the holidays
and leisure segment.
In Thomas Cook (Mauritius) Operations Company Limited (TCMOCL), a
step-down subsidiary of the Company, a new integrated software
Maraekatwas identified for implementation for foreign exchange and
accounting transactions. The usage of the new system helped identify
certain Accounting and Reconciliation Issues. The management has
resolved and corrected these issues in the books after an independent
enquiry and investigation.
Operations in Sri Lanka Branch
The Sri Lanka branch of your Company offers foreign exchange services
from the arrival and departure lounge of the Bandaranaike International
Airport, Colombo, Sri Lanka and also from a branch office in Colombo
city.
The focus of your Company is to expand its operations by opening more
branches in Colombo city and also various other cities across the
Island as and when the approvals are received from the regulatory
authorities. Your Company is also seeking to enhance its scope of
license to enable it to play a more constructive role in the financial
system of the country.
Post the end of insurgency in Sri Lanka, the inflow of tourists has
started to increase. With a safe and stable environment, conducive to
travel, the outlook seems positive for the countrys economy and your
Company would look to capitalize on it.
Accolades and Awards
Thomas Cook (India) Limited has been the recipient of the following
highly prestigious awards/ accolades in 2010:
CNBC AWAAZ - Best FOREX Company in India for the second year in a row
Indias Most Preferred Foreign Exchange Company by Indian Hospitality
Excellence Awards
Special Commendation for the Golden Peacock National Training Award
for the year 2010
Directors
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. Rakshit Desai was re-appointed as the Executive Director - Travel
Services of the Company for a period of one year w.e.f. 25th November,
2010 subject to the shareholders approval.
The above appointments, re-appointments and variations form part of the
Notice of the Thirty-fourth 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.
During the period, Mr. Dilip De and Mr. Heinrich- Ludger Heuberg
resigned from the Company. The Board placed on record its sincere
appreciation for the contribution made by these Directors during their
tenure as Directors of the Company.
With respect to the approvals sought from the Central Government in
respect of the appointment and remuneration of Mr. Rakshit Desai for
2008 and 2009 and in respect of payment of managerial remuneration to
Mr. Madhavan Menon and Mr. Vinayak K. Purohit for 2009, the same have
since been received.
Auditors
M/s. Lovelock & Lewes, Chartered Accountants, Firm Registration No.
301056E,Auditorsof the Company who retire atthe 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(1 B) of the Companies
Act, 1956. Your Directors recommend their re-appointment.
M/s. PricewaterhouseCoopers, Chartered Accountants, Colombo, Sri Lanka,
Firm Registration No. W4179, are recommended for re-appointment as
Branch Auditors of the Sri Lanka Branch of the Company.
Subsidiary Companies
The Audited Statement of Accounts along with the Directors Report of
Travel Corporation (India) Limited, Thomas Cook Insurance Services
(India) Limited, Thomas Cook Tours Limited and Indian Horizon Travel &
Tours Limited for the year ended 31st December, 2010 and the
Consolidated accounts of Thomas Cook (Mauritius) Holding Company
Limited for the year ended 30th September, 2010 are separately attached
as required under the provisions of Section 212 of the Companies Act,
1956. The Mauritian subsidiaries have changed their accounting year to
end on 30th September every year. Accordingly, the Consolidated
Accounts of Thomas Cook (Mauritius) Holding Company Limited for the
year ended 30th September, 2010 are separately attached.
Particulars regarding conservation of energy, technology absorption and
foreign exchange earnings and expenditure
Your Company being in the Tourism and hospitality industry, its
activities do not involve in 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.
However, due to the voluntary measures adopted to conserve energy
through an energy audit and consequently implementing its
recommendations, your Company was able to make a saving in its energy /
electricity consumption of 66210 units (approx. Rs. 1.2 million) at the
Head Office and 98964 units (approx. Rs. 1.6 million) at its Chembur
office.
During the year, the foreign exchange earnings amounted to Rs. 457
million, whereas, the Company has incurred Rs. 73 million as expenditure
in foreign currencies towards interest, bank charges, licence fees,
professional fees, as well as travelling for promotional activities,
subscriptions, etc., as disclosed in Schedule Q Note 2(h) and 2 (f) in
the Notes to the accounts.
Fixed Deposits
Your Company has not accepted deposits from the Public within the
meaning of Section 58A of the Companies Act, 1956 and as such no amount
principal or interest was outstanding on the date of the Balance Sheet.
Listing of Shares
Your Company is listed on two Stock Exchanges in India viz. Bombay
Stock Exchange Limited, Mumbai and National Stock Exchange of India
Limited, Mumbai. The Company has paid the Listing Fees to both the
Stock Exchanges for the period 1st April, 2010 to 31st March, 2011.
Employees
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.
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,
forms part of this Report and have been annexed herewith.
Corporate Governance
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 is1 listed. The Management Discussion and
Analysis Report forms part of this Annual Report.
For the year ended 31st December, 2010, 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 the Auditors of the Company regarding such
compliance of conditions of Corporate Governance is attached to this
report.
Acknowledgments
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 Companys employees at all levels but for
whose hard work, solidarity and support your Companys consistent
growth would not have been possible.
FOR AND ON BEHALF OF THE BOARD
MADHAVAN MENON VINAYAK K. PUROHIT
Managing Director Executive Director - Finance
Mumbai,
Dated: 17th February, 2011
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