Thomas Cook (India)

The Directors have pleasure in presenting the Thirty-first Annual
 Report, together with the Balance Sheet and Profit and Loss Account for
 the year ended 31st December 2007.
 
                                                       Rupees in Million
 
                                         Year ended    Fourteen months
                                   31st December 2007 31st December 2006
 
 Revenues                                      2251           2173
 Profit before Taxation 
 and Exceptional items                          393            603
 Provision for Taxation                          72            186
 Provision for Deferred Taxation                (25)
 Provision for Fringe Benefit Tax                12             14
 Profit after Taxation and before
 Exceptional item                               334            403
 Exceptional item, net of taxation               -              18
 Profit after Taxation                          334            385
 Transferred from Reserve 
 U/sec. 80 HHD of                                13             18
 the Income Tax Act, 1961
 Transferred to General Reserve                  34             38
 Proposed Dividend*                             124             80
 EPS (Basic) after exceptional items            1.76          2.64
 EPS (Diluted) after exceptional items          1.71          2.31
 
 
 *Includes preference share dividend.  Operations & Results
 
 Tourism in India has registered significant growth in the recent years.
 In 1951, international tourist arrivals stood at around 17 thousand
 which has gone up to 4.42 million in 2006. International tourism
 revenue grew to USD 6.75 bn, an increase of 14.6% over last year. The
 upward trend is expected to remain firm in the coming years. Tourism in
 India is the third largest foreign exchange earner, accounting for 2.5%
 of GDP. Tourism is also one of the sectors, which employ a large
 manpower.
 
 The year 2007 saw the synergies flowing in with the acquisitions of LKP
 Forex Limited and Travel Corporation (India) Limited.  Your Company
 recorded turnover of Rs. 2,152.20 million, and profits before tax of
 Rs. 392.85 million with the profit after tax, Rs. 334.11 million for
 the year ended 31st December 2007. The basic earning per share of the
 Company is Rs. 1.76.
 
 Thomas Cook (India) Limited, along with its subsidiaries, continues to
 be the largest integrated travel group with its presence in 158
 locations in India and 7 countries outside of India.
 
 Preferential Issue:
 
 Your Company had issued Preference Shares to LKP Forex Limited
 consequent upon the amalgamation becoming effective in terms of the
 Order dated 12th January 2007 of the Honble High Court of Judicature
 at Bombay, of which Class A, 4.65% Cumulative Non- Convertible
 Redeemable Preference Shares of Rs. 10/-each, amounting to Rs. 1032.8
 million were due for redemption by 1st February 2008. As the Preference
 Shares can only be redeemed by the capital generated from issue of new
 shares, hence the Company issued fresh 10,50,00,000 1% Cumulative
 Non-Convertible Redeemable Preference Shares of Rs. 10/- each amounting
 to Rs. 1050 million.
 
 With the redemption and a fresh issue of preference shares, the
 Authorised Share Capital and the Issued, Subscribed and Paid-up Share
 Capital underwent a change. Further, with the sub-division of the
 equity shares of the Company, the face value has reduced to Re. 1/-from
 Rs. 10/-.
 
 The current share capital structure is as follows:
 
 Authorised Capital:                                 Rs.       Rs.
 Equity:
 34,58,27,060 Equity Shares of Re. 1/- each       345,827,060   -
 Preference:
 (i)  11,47,60,000 Class A, 4.65% Cumulative
 Non-Convertible Redeemable Preference
 Shares of Rs. 10/- each                        1,147,600,000   -
 (ii)  3,55,294 Class B 0.001% Cumulative
 Convertible / Redeemable Preference Shares
 of Rs. 10/-each                                    3,552,940   -
 (iii)  3,02,000 Class C 0.001% Cumulative
 Convertible / Redeemable Preference Shares
 of Rs. 10/-each                                    3,020,000   -
 (iv) 12,50,00,000 1% Cumulative Non-Convertible
 Redeemable Preference Shares of
 Rs. 10/- each                                  1,250,000,000   _
                                                2,750,000,000
 Issued, Subscribed and Paid-up Capital:
 Equity:
 16,07,82,330 Equity Shares of Rs. 10/- each      160,782,330   -
 Preference:
 (i)  3,19,765 Class B 0.001% Cumulative
 Convertible/ Redeemable Preference Shares
 of Rs. 10/-each                                    3,197,650   -
 (ii) 2,71,800 Class C 0.001% Cumulative
 Convertible / Redeemable Preference Shares
 of Rs. 10/-each                                    2,718,000   -
 (iii)  10,50,00,0001% Cumulative
 Non-Convertible Redeemable Preference
 Shares of Rs. 10/- each                        1,050,000,000   _
                                                1,216,697,980
 
 Employees Stock Option Scheme (ESOP)
 
 With the objective of motivating and retaining key talent in the
 organisation and fostering ownership, your Company proposed to grant
 stock options to its employees. Towards achieving this objective, your
 Company had obtained the approval of the Members of the Company for the
 Thomas Cook Employees Stock Option Scheme 2007 (the ESOP Scheme) vide
 Postal Ballot Notice dated 15th January 2007 and approved on 20th March
 2007. Further, the ESOP Scheme was amended vide Postal Ballot Notice
 dated 21th August 2007 and approved on 12th October 2007, for the
 purposes of recovering the Fringe Benefit Tax (FBT) from the employees
 and varying certain terms of the ESOP Scheme to make it SEBI compliant.
 
 The Recruitment & Remuneration Committee administers and monitors the
 scheme. 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.  None of the employees or
 Whole-time Directors have received options exceeding 5% of the value of
 the options issued for the year ending December 2007. Likewise, no
 employee has been issued share options, during the year 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 & Class C
 Preference Shares as per their terms as also seek the ratification of
 the dividend paid to Class A Preference Shareholders on redemption.
 The Directors are also pleased to recommend a dividend of 50% on the
 equity share capital.  the proposed dividend on the equity capital and
 preference capital absorbs Rs. 123.55 million for dividend and Rs. 21
 million for Dividend Tax.
 
 General Reserve
 
 Your Directors have resolved to transfer Rs. 33.5 million to General
 Reserve out of the profits of the Company. With the transfer, the total
 reserves stand at Rs. 560.1 million as at 31st December 2007.
 
 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:
 
 a) the Annual Accounts have been prepared in conformity with the
 applicable Accounting Standards;
 
 b) 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;
 
 c) 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;
 
 d) the Directors have prepared the annual accounts on a going concern
 basis.
 
 Change in Ownership Thomas Cook Group plc Thomas Cook Group plc is a
 leading international leisure travel group, created by the merger of
 MyTravel Group plc and Thomas Cook AG in June 2007. Thomas Cook Group
 plc is a listed company on the London Stock Exchange.
 
 On 7th March 2008, Thomas Cook UK Limited (TCUK) agreed to acquire 100%
 of TCIM Limited, from Dubai Financial Group LLC and accordingly an open
 offer was launched. TCUK acquired 100% holding in TCIM Limited, on 28th
 March 2008. Thomas Cook (India) Limited is now 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. holding 54.42% of the
 paid-up capital of the Company. Thus, TCUK indirectly holds 54.42% of
 the paid-up capital of the Company.
 
 Group
 
 Pursuant to intimation from the promoters, the name of the Promoters
 and entities comprising the group as defined under the Monopolies and
 Restrictive Trade Practices (MRTP) Act, 1969 are disclosed herein
 below.  Persons constituting group coming within the definition of
 group as defined in the Monopolies and Restrictive Trade Practices
 Act, 1969, for the purpose of Regulation 3(1)(e)(i) of the
 Securitiesand Exchange Board of India (Substantial Acquisition of
 Shares and Takeovers) Regulations, 1997, include the following:
 
 Airtours the Holidaymakers Limited Blue Sea Investments Limited Blue
 Sea Overseas Investments Limited
 MyTravel Group plc
 MyT ravel UK Limited
 Sandbrook Overseas Investments Limited
 Sandbrook UK Investments Limited
 Thomas Cook Group plc
 Thomas Cook Investments (1) Limited
 Thomas Cook Investments (2) Limited
 Thomas Cook Overseas Limited
 Thomas Cook UK Limited
 Thomas Cook (India) Limited
 Operations in India
 
 Your Company announced on December 13, 2007, that it has signed a
 Memorandum of Understanding (MOU) with JTB Corp.  Japan, one of the
 largest travel solutions Companies in the world. The alliance will
 allow your Company to access the JTB Corp. network across 30 countries
 along with affiliates spreading over 800 offices. For JTB Corp., the
 alliance will provide a ready platform to enter the Indian market.
 Thomas Cook expects to witness growth in areas such as in-bound and
 out-bound tours.  With this alliance, Thomas Cook also expects to see
 tremendous growth in its corporate travel business as it would now have
 access to the global relationships of JTB Corp.
 
 The year 2007 has been one of consolidation. With the integration of
 Travel Corporation (India) Limited (TCI) into the Thomas Cook fold, a
 larger customer base is now available, coupled with higher buying power
 with all our vendors.  With increasing frequency of travel amongst
 frequent travellers, who often combine business and pleasure trips,
 travellers are willing to explore to newer areas. Short-haul overseas
 holidays to close-by destinations also find favour with a lot of the
 corporate customers, in view of the continued high taxation for
 domestic holidays.
 
 The in-house e-business portal www.thomascook.in would be an added tool
 to defend us against the onslaught of multiple websites, which are at
 present being accessed by customers.
 
 Operations in Mauritius
 
 This year, the growth in the foreign exchange operations at Mauritius
 again exceeded expectations. This business continues to expand rapidly
 geographically with the number of branches now increasing to ten during
 the period under review. Substantial positive growth is expected to
 continue in coming years.  Thomas Cook (Mauritius) Travel Limited,
 which was the General Sales Agent (GSA) of Condor till June 2007, is
 now selling train tickets, and represents Kingfisher in Mauritius.
 
 The GSA business has continued to remain stagnant following the
 termination of the GSA agreement by Condor effective July 2007.
 However, it has been appointed as GSA for Kingfisher and it has been
 able to develop new products that will contribute to growth in sales
 and revenue figures. The Company is also looking forward to represent
 more airlines in the near future.  The Leisure and Corporate Travel
 business which started operating as from March 2006 is picking up after
 a loss made in its first year of operations.
 
 Operations in Thailand & Singapore
 
 Your Company has closed down operations of the Thailand Company -
 THOMAS COOK TRAVEL (THAILAND) LIMITED. Your Company has also closed
 down operations of the Singapore Company - THOMAS COOK TRAVEL AND
 FOREIGN EXCHANGE (SINGAPORE) PTE. LIMITED.
 
 Accolades and Awards:
 
 Thomas Cook (India) Limited has been the recipient of the following
 highly prestigious awards:
 
 Singapore Airlines - Top Passenger Agent 2006-07
 National Tourism Awards - Best MICE Operator 2006-07
 National   Tourism   Awards  -  Third   Prize   -   Inbound
 Operator
 
 Directors
 
 In accordance with Article 131 of the Articles of Association of the
 Company, Mr. Udayan Bose, Mr. A. V. Rajwade and Mr. H. S.  Billimoria
 retire by rotation and being eligible, offer themselves for
 re-appointment to the Board.
 
 Pursuant to the acquisition of Thomas Cook (India) Limited by Thomas
 Cook UK Limited from Dubai Financial Group LLC, the Board of Directors
 underwent a change on 30th March 2008. Mr. Sayanta Basu, Mr.
 AbdulHakeem Kamkar and Ms. Jacqueline Asher resigned from the Board and
 Mr. Manny Fontenla-Novoa, Dr. Juergen Bueser, Mr. Michael Hallisey and
 Mr. Roland Zeh were appointed as Additional Directors with effect from
 30th March 2008. As Additional Directors, they hold office upto the
 date of ensuing Annual General Meeting of the Company. The Company has
 received notices in writing from certain members proposing their
 candidature for the office of a Director liable to retire by rotation.
 The Directors recommend their appointment.  Mr. Mahendra Doshi resigned
 as Director with effect from 30th March 2008.  Mr. Y. Vijayanand ceased
 to be an SBI Nominee Director with effect from 31st August 2007 and
 Mrs. Bharati Rao, SBI Nominee was nominated and appointed with effect
 from 24th November 2007.
 
 The Service Agreement of Mr. Vinayak K. Purohit, who was appointed as
 Executive Director - Finance, was amended vide Supplemental Service
 Agreement on 24th November 2007. The same has been included in the
 Notice convening the Annual General Meeting.  The above appointments
 and re-appointments form part of the Notice of the Thirty-first 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.
 
 Auditors
 
 M/s. Lovelock & Lewes, Chartered Accountants, 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-appointment.
 
 M/s. PricewaterhouseCoopers, Chartered Accountants, Colombo, Sri Lanka,
 are recommended for re-appointment as Branch Auditors of the Sri Lanka
 Branch of the Company.  Regarding Clause 4(a) of the Auditors Report,
 based on legal opinions obtained, the Company has considered
 non-compete fees paid during the year as an allowable expenditure for
 computing the provision for tax for the current year. The Company has a
 reasonable case to claim this item as an allowable expenditure.
 
 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, Indian Horizon Travel &
 Tours Limited and the Consolidated accounts of Thomas Cook (Mauritius)
 Holding Company Limited for the year ended 31st December 2007 are
 separately attached as required under the provisions of Section 212 of
 the Companies Act, 1956.
 
 Particulars regarding conservation of energy, technology absorption and
 foreign exchange earnings and expenditure Your Company being in the
 Tourism 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.  During the year, the foreign exchange earnings amounted
 to Rs. 557.9 million, whereas, the Company has incurred Rs. 45.9
 million as expenditure in foreign currencies towards interest, bank
 charges, professional fees as well as travelling for promotional
 activities, subscriptions, etc., as disclosed in Schedule Q Note 2(i)
 and 2(g) 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 Listing Fees for the Financial Year 2007-2008 have
 been paid to both the Stock Exchanges within the prescribed time limit.
 
 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, 19S6
 
 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-of-breed corporate practices.  It has also
 complied with various standards set out by SEBI and the Stock Exchanges
 where it is listed.
 
 The disclosures as required under the Corporate Governance standards
 have been furnished as a part of this report. Your Company has taken
 the requisite steps to comply with the recommendations concerning the
 Corporate Governance. The Management Discussion and Analysis Report
 forms part of this Annual Report. A certificate from the Auditors of
 the Company regarding compliance of conditions of Corporate Governance
 as stipulated under Clause 49 of the Listing Agreement is attached to
 this report.
 
 Acknowledgements
 
 Your Directors thank all the Shareholders, Customers, Vendors for their
 continued support throughout the year. We also thank Ministry of
 Tourism, Banks, 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 our 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 even possible.
 
                                          FOR AND ON BEHALF OF THE BOARD
 
 
                                   UDAYAN BOSE   -    CHAIRMAN
                                  MADHAVAN MENON  -   MANAGING DIRECTOR
 
 Mumbai
 Dated: 31st March 2008