Thomas Cook (India)
BSE: 500413 | NSE: THOMASCOOK | ISIN: INE332A01027 | Miscellaneous
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Dec '07 |
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
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