you are here:

Indian Hotels Company Ltd.

BSE: 500850 | NSE: INDHOTEL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE053A01029 | SECTOR: Hotels

BSE Live

Oct 27, 12:01
205.45 -2.15 (-1.04%)
Volume
AVERAGE VOLUME
5-Day
738,812
10-Day
1,052,077
30-Day
1,105,246
178,124
  • Prev. Close

    207.60

  • Open Price

    208.20

  • Bid Price (Qty.)

    205.45 (112)

  • Offer Price (Qty.)

    205.60 (149)

NSE Live

Oct 27, 12:01
205.50 -1.95 (-0.94%)
Volume
AVERAGE VOLUME
5-Day
11,556,148
10-Day
15,411,146
30-Day
16,177,613
2,437,919
  • Prev. Close

    207.45

  • Open Price

    209.00

  • Bid Price (Qty.)

    205.50 (115)

  • Offer Price (Qty.)

    205.55 (229)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2011 2010

Director’s Report

The Directors have pleasure in presenting the 107th Annual Report of the Company together with its Audited Profit and Loss Account for the year ended March 31, 2008 and the Balance Sheet as on that date: FTNANCIAL RESULTS Rs/Crores Particulars 2007/08 2006/07 Total Income 1823.16 1617.31 Profit before Depreciation, Interest and Tax 760.23 637.97 Less: Depreciation 85.48 91.44 Less: Interest 94.28 71.89 Profit before tax 580.47 474.64 Less: Provision for tax 198.91 152.25 Less: Short Provision of Tax of earlier years (Net) 4.10 - Profit after tax 377.46 322.39 Add: Balance brought forward from the previous year 331.33 156.80 Profit before Appropriations 708.79 479.19 APPROPRIATIONS (i) General Reserve 38.00 35.00 (ii) Dividend: An interim dividend of 190% i.e. Re. 1.90/- per Ordinary Share was declared by the Board of Directors on 15th April, 2008 and paid to Members on the Record date April 23,2008 . (In respect of the previous year, a dividend of 160% i.e. Re. 1.60/- per Ordinary Share was declared and paid to the Members) 114.54 96.46 Tax on Dividend 19.47 16.40 (iii) Balance carried to Balance Sheet 536.78 331.33 708.79 479.19 INCOME The total income for the year ended March 31,2008 at Rs. 1,823.16 crores was higher than that of the previous year by 13%. Room Income was higher than the previous year by 16%. The Average Room Rate (ARR) increased by 16% over the previous year, contributing significantly to the total increase in room income. Food & Beverage (F&B) income was 12% higher than the previous year. Banquets income grew by 16% over the previous year. INTEREST AND DEPRECIATION Interest cost was higher at Rs. 94.28 crores for the year ended March 31,2008 as compared to Rs. 71.89 crores in the previous year consequent to complete utilization of FCCB proceeds and incremental debt to fund acquisition of Campton Place in San Francisco, USA. Depreciation for the year was lower due to one time charge on leased assets taken in the previous year. PROFITS Profit before Tax at Rs. 580.47 crores was higher than the previous year by 22%. Profit after Tax at Rs. 377.46 crores was also higher by 17% over the previous year. DIVIDEND Your Directors declared an interim dividend of 190% (Rs.1.90/- per Ordinary Share), involving an outflow of Rs. 134.01 crores including dividend tax. The interim dividend was paid in April, 2008. No further dividend is proposed to be paid for the year ended March 31,2008. FCCB ISSUE During the year under review, all outstanding Foreign Currency Convertible Bonds (FCCBs) have been converted by the Company. Consequently, there are no outstanding FCCBs. RIGHTS ISSUE During the year, your Company raised an aggregate of Rs. 1447 crores through a simultaneous but unlinked Rights Issue of Equity Shares in the ratio of 1:5 at a price of Rs. 70/- per Equity Share raising Rs. 844 crores and 6% Non Convertible Debentures (NCDs) with Detachable Warrants in the ratio of 1:10 of the face value of Rs. 100/- each raising Rs. 603 crores. Each Detachable Warrant can be converted into 1 Equity Share at a price of Rs. 150/- in September 2009. The Rights Issue opened on March 14, 2008 and closed on April 24, 2008. The Equity Shares portion was subscribed 1.22 times while the NCDs was only partly subscribed. The Promoters pursuant to their undertaking subscribed to the unsubscribed portion of the NCD issue. The allotment of NCD with Detachable Warrants was made on May 13,2008 and Equity Shares on May 23, 2008 and all the three instruments namely NCDs, Detachable Warrants and Equity Shares have been listed and are being traded on the Bombay Stock Exchange and National Stock Exchange. BORROWINGS The total borrowings stood at Rs. 1134.18 crores as at March 31,2008 as against Rs. 941.90 crores as on March 31,2007. NON CONVERTIBLE DEBENTURES During the year, in addition to the Rights Issue of NCDs, the Company also privately placed secured Non-Convertible Redeemable Debentures for Rs. 300 crores repayable at the end of the third year from the date of allotment. CAP1TALEXPENDITURE During the year under review, the Company incurred Rs. 105.07 crores towards capital expenditure. Major expenditure was incurred on Taj Mahal Hotel, Mumbai, Taj Lands End, Mumbai,Taj Palace Hotel, New Delhi, Taj Mahal Hotel, New Delhi, Taj West End, Bangalore and Gateway on Residency Road, Bangalore. BUSINESS OVERVIEW Global tourism continued to move upward during 2007-08 with the number of international tourist arrivals worldwide reaching about 1,000 million (UNWTO estimates) and international tourism receipts scaling US$ 900 billion in the year. Despite continuing challenges, 2007-08 proved to be another excellent year for travel and tourism - the fourth consecutive year of healthy growth, in fact. World travel and tourism is expected to contribute nearly US$5,890 billion to global GDP in 2008, rising to approximately US$10,855 billion over the next ten years, according to the latest tourism satellite accounting (TSA) research from the World Travel & Tourism Council (WTTC). In terms of regional performance, Africa, Asia Pacific and the Middle East are experiencing higher growth rates than the world average, in terms of total Travel & Tourism Demand, at 5.9%, 5.7% and 5.2% respectively, while the matured markets - most notably the Americas and Europe - are falling below the world average with growth of 2.1 % and 2.3% respectively. The Indian Tourism and Hospitality Industry driven by the huge surge in both business and leisure travel by domestic and foreign tourists as per the World Travel & Tourism Council (WTTC) is expected to generate approximately USD 100 billion in 2008. The flow of foreign tourist arrivals recorded a growth rate of 11.9% in 2007 over 2006 and was 4.9 million in 2007. The first 4 months of 2008 recorded a growth rate of 11.9 % (in tourist arrivals) over the corresponding arrivals in 2007 receiving 2.02 million in foreign tourist arrivals. According to the WTTC, Indian tourism demand is estimated to grow at an average of 8.8% between 2004 to 2013 making India the worlds third fastest growing tourist market. The booming tourism industry has had a cascading effect on the hospitality sector with an increase in the occupancy ratio and average room rates. While occupancy ratio is 75-80%, the average increase in the room rates has been hovering around 22-25% per annum. The Governments move to declare the Tourism industry as a high priority sector with a provision for 100% FDI has provided a further impetus in attracting investments to this industry. Government has also taken various initiatives for the development in this sector. - Launch of Incredible India campaign to promote tourism both in domestic and international markets. - Recognition of spare rooms available with various house owners by classifying these facilities as Incredible India Bed and Breakfast Establishments, under Gold or Silver category. - A new category of visa, Medical Visa (M-Visa), has been introduced which can be given for specific purpose to foreign tourists coming into India. - Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for Ayurveda and Panchkarma Centres. - Ministry of tourism has tied up with United Nations Development Programme (UNDP) to promote rural tourism. India has also received international accolades as a leading global tourist destination. - India has been elected to head the UN World Tourism Organisation (UNWTO), the highest policy making world tourism body represented by 150 countries. - The worlds leading travel and tourism journal, Conde Nast Traveller, ranked India as the numero uno travel destination in the world. - The Association of British Travel Agents (ABTA) has ranked India as No.l amongst the top 50 places for 2006. - The Incredible India campaign has been ranked as the Highest Recall Advertisement worldwide by Travel and Leisure. - India was adjudged Asias leading destination at the regional World Travel Awards (WTA). - Indias Taj Mahal continues to figure in the Seven Wonders of the World. Your Company would aggressively pursue its strategy both in the domestic and international market at different price points from the smart basic hotels to the luxury segment. Against this backdrop, your Company expects to achieve sustainable and profitable growth. THE TAJ WAY Your Company along with its Subsidiaries, Associates and Joint Venture companies operating under the brand Taj Hotels Resorts and Palaces runs the hotels under the brands Taj, Gateway and Ginger hotels and has been able to leverage the sources of competitive advantage in the present buoyant and growth oriented environment. The Company has taken several initiatives during the year and a brief summary of the same is given below with details in the section- Management Discussion and Analysis. PRODUCT UPGRADATTON Your Company continues with its ongoing programme of investing in renovation and upgradation of its property. During the year the following properties were renovated - Taj Mahal Palace and Tower, Mumbai, Taj Palace, Delhi, Taj Bengal, Kolkata, Fort Aguada Beach Resort, Goa, Lake Palace, Udaipur, Taj Mahal, New Delhi, Taj West End, Bangalore, Gateway on Residency Road, Bangalore. The Pierre in New York is closed down for refurbishment on January 1,2008 and will reopen in first quarter of 2009. The Company also over-saw and supported renovation in some of the key properties of Associate companies as part of its ongoing programme of investing in renovation and product upgradation. NEW PROPERTIES During the year, the Company commenced operations under Management and Operating Contract at the Gateway a 100 room Hotel in Vijaywada, Andhra Pradesh and a beautiful 66 room Hotel Taj Tashi in the heart of Bhutans capital city Thimpu which reflects Bhutans rich heritage and architecture. The project at Whitefield, Bangalore a 199 room premium hotel is slated to open shortly. Roots Corporation Ltd., the Companys wholly owned subsidiary, commenced operation of its four new 100 rooms Ginger hotels at Nashik, Agartala, Pondicherry & Baroda under the Smart basics format. During the year, your Company launched several unique restaurants in the domestic & international hotels, notably Latitude the exquisite all day dining restaurant at Taj Samudra, Sri Lanka, the Italian restaurant Prego at Taj Coromandel, Chennai, Masala Club at the Taj West End, Bangalore and the Wasabi restaurant at the Taj Mahal, New Delhi. During the year, your Company invested in a Singapore subsidiary, BJETS Pte Limited which, when operational, will provide a range of services including private non-scheduled aviation services, fractional ownership programmes, acquisition and maintenance of private jet fleet. BJETS aiso intends to target high net worth individuals and MNCs across India, Sri Lanka, Bangladesh, Pakistan, Nepal and South-east Asian countries . Your Company, along with Tata Realty and Infrastructure Limited, successfully bid for setting up an IT SEZ in Chennai which, apart from creation of IT space, will include setting up of a 5 Star Hotel, Serviced Apartments and Convention Centre which will also be of international standard be managed by your Company. EXPANSION IN DOMESTIC AND INTERNATIONAL MARKETS The Domestic market has been rapidly expanding and your Companys expansion strategy in the domestic market has been in line with the expectations given the buoyancy in the industry. During the year under review, the Company has at strategic locations made commitments by way of acquiring properties on lease, entering into tie ups for equipping hotels being built by partners and executing a number of management and technical services contracts for managing, operating and rendering technical services. The Company also entered into management contracts for several properties which will commence operation over the next few years both in the domestic and international markets. In the domestic sector, the Company has signed Management Contracts for hotels at Pune, Kolkata, Pondicherry and a Service Apartment at Pune. On the international front, Management Contracts are in place for properties at YAS Island-Abu Dhabi, Ras Al Khaimah Saraya Islands-UAE, Doha in Qatar and Cape Town, South Africa. All these new hotels will come in the market in the next few years. On the wild life safari lodges business, while two high end lodges are operational, two more lodges are slated to open shortly at Panna and Kanha, thereby completing the first safari circuit in India. Under the Ginger brand in addition to the 11 operational hotels, various projects at New Delhi, Ludhiana, Goa, Mangalore, Ahmedabad and Guwahati are under implementation. Management Contracts are also in place under the Ginger brand in Jaipur, Katra, Lucknow and Tirupur. SERVICE EXCELLENCE Guest Experience In its commitment to continually enhance the guest experience, your Company has initiated a series of programmes to upgrade the product and service levels.The online Customer Feedback Survey has greatly facilitated the direction and focus of the service enhancement programme and the training efforts as identified through the Voice of the Customer. Efforts are ongoing to streamline processes in all departments and these have resulted in an increase in the Customer Satisfaction index. The number of HACCP certified hotels increased from nine (9) in the previous year to thirteen (13) in the current year. Feedback from our guests on their changing needs have been incorporated into planned hotel renovations and into the design planning for new builds. A competency based training matrix was introduced to augment knowledge, skill & total quality of service and enhance the guest experience. A Personal Contact programme was developed to ensure a consistent guest experience which is unique and personalized to each guests needs. This helps in building customer loyalty and eventually giving us a competitive edge. Key guest service touch points like the Concierge, Butler Services, the Sommelier and Bartender programmes were further reinforced. Associates who had undergone the initial training under these programmes, received focused development inputs through dedicated training sessions and on-site interactions using international experts. Currently, 15 of our Concierge team members have been recognized as members by the International Association of Concierges, the Clefs dOr (including adherent members). The crossed gold keys worn on the lapels of the Concierge uniform are more than just the symbol of the organization - they represent guaranteed, quality service. A world-renowned Sommelier has been recruited to create unique Wine Programmes in our hotels and enhance the dining experience of our guests.This ongoing development of such key guest facing areas will ensure that service delivery at Taj Luxury Hotels is personalized and further differentiated. As a commitment to the safety and security of our guests, we have instituted a process of independent external audits to evaluate the preparedness of our hotels from a hygiene and safety perspective. The efforts in Food & Beverage benchmarking to create awareness of global food and beverage trends are continuing. Alternate dining experiences and local cuisine dining experiences have been well-received by our guests. A project to cultivate organic vegetables in kitchen gardens and make home-made preserves in all hotels was initiated. Spa cuisine was introduced in hotels where Taj Spas are located. The Tata Business Excellence Model was introduced in the three hotels in the United States of America and some other international luxury hotels in the first phase of the roll-out. This exercise has resulted in a) identifying the priority areas to focus on for improving the service levels and b) introducing a process-oriented model to achieve excellence. The increase of certified internal / external Tata Business Excellence Model assessors has helped to implement and enforce a process-driven operation. This has reflected in a positive trend of results in measures pertaining to financials, customer satisfaction, internal processes and human resources. In our effort to provide defect free product and services, a Six Sigma programme was launched as a pilot project. MARKETING ALLIANCES During the year, your Company entered into some Marketing initiatives. The key amongst those were the alliance with Okura Hotels & Resorts, one of the largest international hotel groups in Japan, to develop cross-promotional opportunities for both companies to harness each others strengths in their respective markets of dominance. During the year, your Company also tied up with several Airlines for their Frequent Flier loyalty programme, the key amongst them being with Lufthansa, American Airlines and KLM. The major tie-ups entered into are like Miles & More, the frequent flyer programme of Lufthansa, Adria Airways, Air Dolomiti, Air One, Austrian Airlines, Croatia Airlines, LOT Polish Airlines and Luxair, Flying Blue, an innovative frequent flyer program with a four-tier structure (Platinum, Gold, Silver and Ivory levels) launched jointly by AIR FRANCE and KLM and AAdvantage a frequent flyer program of American Airlines. Your Company in collaboration with ICICI Bank and American Express launched the new ICICI Bank Ascent American Express Card. The Card is six times more rewarding for the consumer than the other leading credit cards in India. Consumers earn attractive 6 reward points per Rs 100 spent on dining, shopping, travel and overseas expenses. Additionally, there are exciting offers and privileges to help customers save even as they prepare for that long awaited getaway. SUBSIDIARIES The Company has obtained an exemption from the Department of Company Affairs (DCA) vide its letter no. 47/267/2008 - CL - III dated May 16, 2008, for publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act of 1956. Hence, the accounts of the subsidiary companies are not separately included in the Annual Report. However, the Consolidated Financial Statements of the Company and its Subsidiaries, Joint Ventures and Associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the consolidated accounts. The Financial Statements of the subsidiary companies and other detailed information will be made available to the investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection at the Registered Office of the Company as well as the respective Registered Offices of subsidiary companies. LISTING The Ordinary Shares of your Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Global Depository Shares (GDS) issued by the Company are listed on the London Stock Exchange. FEXED DEPOSITS The Company accepts/renews fresh deposits only from the Members of the Company at a rate of 6.25% p. a. for a period of three years with the minimum amount of the deposit being Rs. 25,000. The outstanding amount of fixed deposits placed with the Company amounted to Rs. 3.38 crores (previous year Rs. 5.13 crores) including Rs. 0.30 crores (previous year Rs. 0.73 crores), which remained unclaimed by depositors as on March 31,2008. DIRECTORS Mr. Anil P. Goel and Mr. Abhijit Mukerji were appointed as Additional Directors and as Whole Time Directors of the Company for a period of five years with effect from March 17, 2008. They respectively hold office upto the date of the forthcoming Annual General Meeting of the Company. Taking into consideration their knowledge and experience, the Board commends their appointment as Whole-time Directors of the Company to the Members of the Company. Members approval for their appointment as Directors and Whole-time Directors has been sought in the Notice convening the Annual General Meeting of the Company. Mr. Raymond N. Bicksons tenure as Managing Director ends on July 18, 2008. The Company has greatly benefited from his expertise and international experience. In view of the same, it is proposed to re-appoint Mr. Bickson as the Managing Director of the Company for a period of 5 years w.e.f. July 19,2008. The Board commends his re-appointment as the Managing Director of the Company to the Members of the Company. In accordance with the Companies Act, 1956, and the Articles of Association of the Company, three of your Directors, viz., Mr. R.K. Krishna Kumar, Mr. Shapoor Mistry and Mr. K. B. Dadiseth retire by rotation, and are eligible for re-appointment. CORPORATE GOVERNANCE As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. AUDITORS M/s S.B. Billimoria & Company, the retiring Auditors, have by their letter dated May 29, 2008 informed the Company of their decision not to seek re-appointment as Joint Auditors of the Company. The Board of Directors recommend the appointment of M/s. Deloitte Haskins & Sells and M/s. N.M. Raiji & Company as Joint Auditors. The Members are requested to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and re-appoint M/s. N.M. Raiji & Co., Chartered Accountants, Mumbai as Joint Auditors for the current year and authorise the Board of Directors to fix their remuneration. FOREIGN EXCHANGE EARNINGS AND OUTGO As required under Section 217( 1 )(e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is in Note Nos. 18, 19, 20 & 21 of the Notes to the Accounts. STAFF As required by Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, a statement of information relating to the employees has been given in the Annexure to the Report and forms a part of it. The Board desires to place on record, its appreciation to all employees of the Company who during the year under review with sustained dedicated effort enabled the Company to deliver a good all-round record performance. DIRECTORSRESPONSIBILlTYS TATEMENT Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, based on the representations received from the Operating Management, hereby confirms that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; ii. it has in the selection of the accounting policies, consulted the Statutory Auditors and has applied them consistently 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 as at March 31, 2008 and of the profit of the Company for that period; iii. it has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records; and iv. it has prepared the annual accounts on a going concern basis. GLOBAL COMPACT As part of the Tata Group, your Company had signed up to promote the United Nations Global Compact which lays down ten key principles to specifically address issues in the areas of human rights, labour, corruption and the environment. Your Company continues to be an active member of Global Compact. Your Company annually submits a Corporate Sustainability Report detailing its economic, environmental and social performance. On behalf of the Board of Directors Ratan N.Tata Chairman Mumbai, June 23,2008 Registered Office: Mandlik House Mandlik Road Mumbai 400 001.

Director’s Report