105 Taj

TAJ HOTEL LTD.
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ON
PREPARED BY PANCHAL CHAITANY A. ROLLNO: 105 S.Y.B.B.A. GUIDED BY
SUBMITTED TO
FACULTY OF BUSINESS ADMINISTRATION DHARMSINH DESAI UNIVERSITY, NADIAD
PREPARED BY: PANCHAL CHAITANY
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The faculty of business administration was started in the year of 1999. As BBA has been considered as the professional course so the theoretical knowledge is not enough. The practical knowledge at the second year BBA level is to develop the student ability knowledge about industrial marketing finance level in aroused to develop the skill and attitude. This report is based on 2 year annual report of Indian hotel Taj ltd. it includes analysis of balance sheet profit and loss a/c ratio have been the calculated with interpretation present clear of financial profitability and liquidity of the company. This type of practical knowledge is very inevitable for the manager of tomorrow.
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In the second year BBA it had introduced the Indian hotel ltd. but this report many person helped me. First I would like to thank to our director sir G S Shah then I also thankful to Prof. Rasmi Gang to provide full detail about the command and support us I would also like to thank my friend Retan J Patel I am thank full to Faculty of business administration for going me this golden opportunity.
Name :- Panchal Chaitany A Roll No.: 105 SYBBA
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1.
COMPANY PROFILE RATIO ANALYSIS TABLE OF RATIOS ACCOUNTING POLICY AUDITORS REPORT DIRECTORS REPORT COMMON SIZE STATEMENT CASH FLOW STATEMENT CONCLUSION
5 10 34 36 43 49 59 61 67
2 3 4 5 6 7 8 9
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NAME : The Indian Hotels Company Limited. ADDRESS : Mandilk House, Mandilk Road, Mumbai 400 001
BOARD OF DIRECTORS : Chairman: Ratan N Tata Vice Chairman: R K Krishna Kumar Anil P Goel: Executive Director Finance Abhijit Mukerji: Executive Director Hotel Operations Ajay K Misra: Sr. Vice-president Sales & Marketing H K Shrinivas: Sr. Vice-president Tecnology & CIO
Jyoti Marang: Chief operating officer gate way Hotels.
Jamshed S Daboo: Chief Operating Officer Premium Hotels P Snaker: Vice-president and company secretary Sumit Guha: vice-president project and business Devlopment
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BANKERS NAME: The Hong Kong and Shanghai Banking Corporation Limited Standard Chartered Grind lays Bank Citibank N.A HDFC Bank NAMES OF SUBSUDIARY COMPANY : Taj Investment & Finance Co. Ltd. Roots Corporation Ltd. Taj Sats Air Catering Ltd. United Hotels Ltd. AUDITORS NAMES: -> S.B.Billimoria and Company -> N.M.Raiji and company COMPANY SECRATORIES NAME: P.Sankar (Vice President legal and Company Secretary)
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LINE OF BUSINESS : hotels resorts palaces
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AWARDS & ACCLAIMS AWARDS TAJ HOTELS RESORTS AND PLACES Corporate global Awards Taj hotels resorts and places was the winner of the selling long haul Travel Awards 2007. Taj spa was honored with the SENSES Visions Award 2007 at the SENSES wellness Awards 2007 held in Berlin Corporate National Awards: CNBC TV 18 International Hospitality category. Dun & Bradstreet American express corporation Award 2007 accolades The Indian Hotels Company Limited as Indias top 500 Companies 2007 in the Hotel Category. Indias most customer responsive Hotel-category Hotels by the Avaya Global connect Customer Responsiveness Award 2007. Travel For Outstanding
Exporter of the year 2007 in the Travel Truism &
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HUMAN RESOURCE AND SOCIAL RESPONSIBILITY:The manpower employed in your company for 2006/07 was 10018 which included executives, barginable staff, probations, trainees, appertains and contract employees. The in numbers is mainly on a/c of Amalgamation of five group companion with your company. This initiative called emerging herders of Taj or EL Taj is a process that provided an opportunity to high performing executive in different grades to participating in developmental and Assessment centers where these executive participate in exercises and simultaneous to identify strong and week competencies. The aim is to crate a reservoir of talent of 400 top notch people by the end of this deaden with leadership qualities to man the slots that will arise due to the growth and expansion plans of company. The expansion plans for your company are being supported by an initiative of aggressively young catering college graduates and providing them with high quality training. The existing Taj management trainee program is being further strengthened and as an extension of this young hotelier program a hotel operations management trainee programs is being initiated.
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The financial statement as prepare and presented annually are of little use for guidance of perspective investor and even management it relationship between financial statement useful due to relation between two related items of financial statement is known as ratio. The ratio is define as the indicated at two mathematical expansive is known as ratio the relation financing statement is known as ratio. The ratio helps to summarize large quantities of financing data and to make qualitative judgment about the firms finance per the point to note that the ratio relating a quantity relationship quantitative judgments. In view of the requirement the various at ratio we can classify them into the following. :: Important of Ratio Analysis :: As a tool of financial manage performance of a firm in respect of the following aspect.
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1. Overall Profitability : Unlike the outside partner that are interested in one aspect of the financial positions of a firm the management is constantly concerned about the overall profitability of the enterprise that is they are concerned about the ability of the firm to meet return to its owners and ensure optimum utilization of the assets of the firm. 2. Inter firm Comparison : Ratio analysis not only thought light on the financial position of a firm but also with the due to inter firm is made possible due to the inter average a single in standard or that performance of a should be in confirmed with that of the industries it belongs. 3. Operating Efficiency : Yet another view point of the management is that its thought light on degree of efficiency solvency of firm is in the analysis depending upon the sales revenues generated by the use of its assets total as well as its components. 4. Liquidity Position :
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With the help of ratio analysis conclusion can be drown requires the liquidity position in the firms. Maturing debts. At a year as well as to reply the principal. 5. Trend Analysis : Finally ratio analysis enable a firm to make in other goods whether made possible by use of trend analysis the significant of trend analysis ratio of trend.
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GROSS PROFIT RATIO It is a ratio expensive the relationship the between gross profit earned to net sales gross profit is the gross earning the company. It is useful indication of the profitability of business gross profit between prices sales volume and costs. Gross profit measure the percentage of each sales rupee remaining offer the firm has paid for its goods a firms should have a resources gross margin to ensure that all its appear expensive paid off. Gross Profit Gross Profit Ratio = -------------- * 100 Net Sales For 2006-07, Gross Profit Gross Profit Ratio = -------------- * 100 Net Sales 1038.92 = ---------- * 100 = 67.42 % 1540.86 For 2007-08,
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Gross Profit Gross Profit Ratio = -------------- * 100 Net Sales 1226.10 = ---------- * 100 = 69.49 % 1764.51
70 69.5 69 68.5 68 67.5 67 66.5 66 2006-07 2007-08
Series1
:: Interpretation :: The ratio that for a sales of very rupee 100 a margin of year is rs. 67.42 and is 69.49 in year 2007 and 2008 respectively are available from which the operating expansive of the business are to be recorded gross profit is opportunity increased in the current year. The higher the gross profit ratio better for company and vice versa.
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NET PROFIT RATIO The ratio measures the relationship between net profit and sales of a firm this ratio indicates what percent of sales revenue is left to the prospectors after all operating expensive are. The ratio in useful to measure the over all profitability performance of the business and shows the efficiency of the company to earn amount the profit earned its net sales. The N.P. margin is indicates to mgt. ability to operates the business with sufficiently success not only to over from revenue of period of the cost of production but also to the provides fair returns to the investors and owners of the firm. Net Profit Net Profit Ratio = ------------ * 100 Net Sales For 2007,
322.39 -------- * 100 = 20.92 % 1540.66 For 2008,
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377.46 --------- * 100 = 21.39 % 1764.51
21.6 21.4 21.2 21 20.8 20.6 2006-07 2007-08 Series1
Interpretation The ratio shows to profitability position of the business if the company makes important of rs 100 they can earn rs 20.92 in the year 2007 but in the year 2008 the net profit ratio goes on decide in this year company makes a profit of rs 21.39 this saws. As such these amount the company has to created reserve and pay dividend to its shareholders the company is enable to pay dividend or create reserve because profit is high so corrective measure shows taken by the company to improve answer.
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Return on Capital Employed It is an index of profitability of business and is obtained by comparing is normally capital expense and included share capital reserves and along terms loan such as debentures. The success or other of the enterprises in judge with the help of this ratio. It is perhaps the most of important ratio the view point management. Earning before Increased Tax Return on Capital Employed = ------------------------------------ * 100 Capital Employed
For 2007, EBT = 474.64 -------- * 100 EBIT = 546.53 546.64 2007 = --------- * 100 = 18.92 % 2889.88
For 2008, EBT = + Int. = 580.47 094.28 --------674.75
+Interest = 071.89
674.75
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2008 = --------- * 100 = 20.26 % 3330.77
20.5 20 19.5 19 18.5 18 2006-07 2007-08 Series1
:: Interpretation :: Thought the ratio in 2007 is 18.92 it has to 20.26 % in 2008. this show that against capital of rs. 100 return on it comes to rs. 18.92 is 2007, which has increased to rs. 20.26 in 2008 from the comparison between the year can more so it is better for the company because the higher ratio use of capital employed.
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RETURN ON SHARE HOLDERS FUNDS This ratio measures the return that the share as compared to his invest this ratio is a great the practical important with that of the other company & hence affects potential invest. While there is no that the preference shareholders are also owners of the firm, the level owners are the ordinary shareholders who bear all the rise. Net Profit After Tax Return on Share Holders = ------------------------ * 100 Share Holder Fund For 2007, 322.39 S.F. Ratio = -------- * 100 = 17.94 % 749.30 For 2008, 377.46 S.F. Ratio = -------- * 100 = 18.55 % 2035.10
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18.6 18.4 18.2 18 17.8 17.6 2006-07 2007-08 Series1
Interpretation This ratio indicates whether the one other on properties funds is enough in relation to that the company indicates. For every rs 100 rs 17.64 and 2008 respectively this ratio is decrease in turn to share holder fund the share holders are not sufficient return on their fund which they earn last year.
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CRDITORS TURN OVER RATIO The creditor turn over suggest the no of times the amount of credit purchase is collected during the year while creditors ratio indicated the turn over of days which the dues for our creditor for credit for credit purchase obtained from creditors vertically. Creditors + BIP Creditors Turnover Ratio = ------------------- * days Credit Purchase For 2007, 186.89 -------- * 365 = 555.12 ~ 555 Days 121.20 For 2008, 149.56 -------- * 365 = 417.10 ~ 417 Days 128.24
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600 500 400 300 200 100 0 2006-07 2007-08 Series1
:: Interpretation :: It is used to know the average period payment for credit purchase the ratio indicates that 55.12 times the amount credit purchased is paid during the year 2007. while is 2008 year 417.10 time the amount of credit ratio shows efficient of the business.
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DEBTORS TURNOVER RATIO The debtors turnover invests the ratio indicates the number of days during which the dues for credit sales are collected. The higher this ratio the more dissatisfaction positions it shares that credit and collection policy is week. Debtors + B/R Debtors Turnover Ratio = ------------------ * days Credit Sales Credit sales is equal to net sales because of lack information all the sales are assumption to be credit. It shows the efficient or otherwise of the collection policy the enterprise. The higher the ratio the more dissatisfaction position it shows it suggests that the credit and collection policy is week. 2007 127.20 --------- * 365 = 30 days 29 days 1540.86 1764.51 138.41 --------- * 365 = 2008
30.5 30 29.5 29 28.5 2006-07 2007-08 Series1
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STOCK TURNOVER RATIO The number of times the average stock is turned our during the year by the cost of goods sold by average stock the year average stock is the average opening closing of the stock year. The ratio is very important in ability of a management with which turnover ratio the firm of slow absolute and management. Cost of Goods Sold Stock Turnover Ratio = ----------------------Average Stock 2007 501.44 -------- = 17.29 times 29.02 2008 538.35 -------- = 16.44 times 32.85
17.4 17.2 17 16.8 16.6 16.4 16.2 16 2006-07 2007-08
Series1
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Interpretation This ratio shows the ability of the management which it can move the stock in the year 2007 ratio is 17.29 times this share the decrease turnover of stock. The ability of company with which it can move the stock as the year 2008 stock turnover ratio is increased the profitable of the business chance are more it is good sign of their company to this year 2008 is future also.
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CURRENT RATIO Current ratio is a measure of liquidity calculated dividing the current assets by the current liabilities the current asset of a firm represented those assets which can be in the ordinary of business converted its cash within a short period of time normally not exceeding a year. The current ratio of a firm measures its short term solvency that is ability to meet short term obligations. Current Assets Current Ratio = -----------------Current Liabilities 2007 499.89 -------- = 9.69 : 1 57.60 2008 578.46 -------- = 4.43 : 1 130.59
12 10 8 6 4 2 0 2006-07 2007-08 Series1
Interpretation
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The standard for current ratio is 2:1 but the company is away from this ratio in the year 2007 it was 9.69 which higher decreased up to 4.43 in 2008 because high increase in liquid. It also shows that on rs 1 current university the company have a assets the company of rs 4.93 which is very high as compare to the standard it means the company is able to pay liquid liability easily.
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LIQUID RATIO Liquid ratio measure the liquid position of the firm to pay to its debt within a every short period idea position is 1:1 It includes only those current assets that can be connected into cash within a very short period liquid liabilities are those which are to be paid the time period. Liquid Assets Liquid Ratio = ---------------Liquid Liabilities Her we assume that current liabilities and liquid liabilities both are same. 2007 470.87 -------- = 9.13 : 1 57.60 2008 545.61 --------- * 4.18 : 1 130.59
10 8 6 4 2 0 2006-07 2007-08 Series1
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Interpretation In the year 2008 the liquid ratio of the company is 4.18 and in the year 2007 the liquid ratio of the company is 9.13. the company liquid ratio is good the co. should try to maintains the ratio in the to the future also.
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ACID TEST RATIO The ratio indicates the immediate capabilities of the business to meet its every quick liabilities one defeats of current ratio is that it fail to convey any information of the composite the current asset of rupee of cash is considered equipment not so prepaid expenses debtors and bills receivable. Quick Asset Quick Ratio = ---------------Quick Liability 2007 194.95 --------- = 3.75 5160 2008 21284 -------- = 1.63 130.54
4 3 2 1 0 2006-07 2007-08 Series1
Interpretation
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The acid test ratio shows the liquidity position or every rs 1 a have classes rs 3.75 and rs. 1.63 in the year 2007 and 208 respectively are available the ideal ratio id rs good point of 1 year that the cash and bank balance are increase as compared to the year 2007 this is because of the collection of sales period is decreased the statement ratio is 0.5:1
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FIXED ASSETS TURN OVER RATIO This ratio indicates the efficient of with assets to generates sales the higher the turnover ratio the more efficient is the management and utilize of the asset to determine the efficiency of the ratio its should be compared across time as well with the concept or must be assets or fixed assets is likely to be higher in the cash of an old and being equal. Fixed Assets Fixed Assets Turnover = ---------------- * 100 Sales 2007 1360.65 ---------- * 100 = 0.88 times 1540.86 2008 1371.60 ---------- * 100 = 0.77 times 1764.51
0.9 0.85 0.8 0.75 0.7 2006-07 2007-08 Series1
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Interpretation This ratio shows the relationship between sales and fixed assets whether the fixed assets are being fully utilized or not this ratio for the year 2007 was 0.88 and 2007 was 0.77 times which shows some satisfactory position. This company ratio is should by maintain its position. The company utilizes more fixed assets in 2007 this ratio for the year 207 and 2008 times which shows some satisfactory.
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Name of Ratios A) Profitability Ratio - Gross Profit Ratio - Net Profit Ratio - Return Shareholders Fund - Return on Equity Shareholders Fund - Return on Equity Share Capital > Return on Capital Employed > EPS - Operating Ratio B) Liquidity Ratio - Current Ratio - Liquid Ratio - ACID Test Ratio C) Solvency Ratio - Debt. Equity Ratio - Proprietary Ratio - Capital Gearing Ratio D) Efficiency Ratio - Stock Turnover Ratio - Debtors Ratio - Creditors Ratio - Debtors Turnover Ratio - Creditors Turnover Ratio
2007 67.42 % 20.92 % 18.91 % 17.93 % 17.93% 534.73% 5.35 96.28 % 10 : 1 9:1 1.31 : 1 0.61 53.88 %
2008 70 % 21.39 % 20.26 % 18.54 % 18.54% 626.07% 6.26 91.40 % 4:1 4:1 0.57 : 1 0.64 53.90 %
17 times 30 days 563 days 12.17 0.86
16 times 29 days 423 days 12.75 0.65
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Impairment of assets :
Impairment is ascertained at each balance sheet date in respect of the companys fixes assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash glows are discounted to their present value, based on an appropriate discount factor. (i)
Assets taken on lease :

Operating lease payments are recognized as expenditure in
the profit and loss account on a straight line basis, representative of the time pattern of benefits received from the use of the assets taken on lease. (j)
Inventories :
Stock of food and beverage and operating supplies are
carried at cost (computed on weighted average basis) or Net realizable value, whichever is lower.
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(k) i)
Investments :
Long term investments are carried at cost. However, provision is made for diminution in value, other than temporary, on an individual basis.
ii) (l)
Current investments are carried at the lower of cost and fair value, determined on a category-wise basis.
Miscellaneous expenditure :
Payments made under the voluntary retirement scheme,
including the additional liabilities towards leave encashment and gratuity, arising pursuant to the voluntary retirement scheme, are amortized over a period of 60 months, commencing from the month in which the scheme is implemented, or up to 31st March, 2010, whichever is earlier. (m) Taxes on income : i. Income tax is computed in accordance with accounting with accounting standard 22-accounting for taxes on income (AS-22), notified by the companies (Accounting standards) rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate. ii. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between the taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of timing differences is
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recognized as a deferred tax asset or deferred tax liability. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax rates substantively enacted by the balance sheet date that would apply in the years in which the timing difference are expected to reverse. iii. Deferred tax assets, other than on unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed fot the appropriateness of their respective carrying values at each balance sheet date. (n) Accounting for provisions, Contingent liabilities and contingent assets : Provisions are recognized in terms of accounting standard 29-Previsions, contingent liabilities and contingent assets (AS-29), notified by the companies (Accounting Standard) Rules, 2006, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the company, or where any present obligation cannot be measuredin terms of future outflow or resources or where a reliable estimate of the obligation cannot be
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made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent assets are not recognized in the financial statements. (o) Borrowing costs (Other than on debentures) : Interest and other borrowing costs on specific borrowings, attributable to qualifying assets, are capitalized. Other borrowing costs are charged to revenue over the tenure of the loan. (p) Debenture issue costs : These are adjusted against the securities premium account, in accordance with section 78 of the companies act, 1956. 2. Rights issue of simultaneous but unlinked issue of equity shares and non-convertible debentures with detachable warrants to the equity shareholders of the company i. a) b) The board of directors, at its meeting held on August 13, 2007 and September 27, 2007, approved the rights issue of. Equity shares in the ratio of 1:5, at a price of Rs. 70 per share, aggregating Rs. 843.99 crores : 6% Non-convertible debentures with detachable warrants in the ratio 1 : 10, of the face value of Rs. 100 each, aggregating Rs. 602.85 crores : c) An option to receive one equity share for every detachable warrant held exercisable at a price of Rs. 150 per share commencing from September, 1, 2009 to September 30, 2009. Assuming that all the warrant holders exercise their
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option, the company would additionally raise Rs. 904.28 crores. ii. The company has field the letter of offer on February 27, 2008, with the securities exchange board of India, subsequent to which the rights issue opened on March 14, 2008 and closed on April 24, 2008. iii. The company has allotted the 6% secured Non-convertible debentures on May 13, 2008 and equity shares on May 23, 2008. 3. Non-convertible debentures : The company has, during the year, issued 9.86% secured non-convertible redeemable debentures, having a face value of Rs. 10,00,000/- each, aggregating Rs. 300 crores. The expenses in relation to the said issue, amounting to Rs. 1.05 crores, have been set off against the Securities Premium
Compensated absences
The company has a scheme for compensated absences for employee, the liability for which is determined on the basis of an actuarial valuation carried our at the end of the year. vi.
Other employee benefits

Other benefits comprising of long service awards and leave
travel allowances are determined on an undiscounted basis and recognized based on the likely entitlement thereof. (d)
Fixed assets :
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Fixed
assets
are
stated
at
cost
less
depreciation/amortisation and impairment losses, if any, Cost includes expenses incidental to the installation of assets and attributable borrowing costs. (e)
Depreciation/Amortization :
In respect of assets acquired before 16th December, 1993,
depreciation is provided under the straight-line method, at the rates and in the manner specified in schedule XIV to the companies Act, 1956, as existing prior to that date. In respect of assets acquired on or after 16th December, 1993, depreciation is provided at the rates as specified in schedule XIV to the companies act, 1956, as revised with effect from that date. In respect of leasehold land, depreciation is charged over the unexpired period of the lease. Commencing from the date the land is put to use for commercial operation. Intangible assets are amortised on a straight-line basis at rates specified below : Website development cost Software) Service & operating rights (f) Transactions in foreign exchange : Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. In respect of integral foreign operations : i) monetary items outstanding at the balance sheet date are translated at the exchange rate prevailing at the balance 20.00 % 16.67 % 10.00 % Cost of customer reservation system (including licensed
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sheet date and the resultant difference is recognized as income or expense. ii) non-monetary items outstanding at the balance sheet date are reported using the exchange rate at the date of the transactions. In respect of non-integral foreign operations : Both monetary and non-monetary items are translated at the closing rate and the resultant difference is accumulated in a foreign currency translation reserve, until the disposal of the net investment. (g) Derivative instruments : The company has an exposure to derivative contracts in the nature of currency swaps which are in respect of some of the underlying rupee borrowings. Exchange difference arising on repayment/revaluation of such currency swaps are recognized as income or expense in the period in which they arise.
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THE INDIAN HOTELS COMPANY LIMITED 1. The auditors have audited the attached Balance sheet of THE INDIAN HOTELS COMPANY LIMITED (the company) as at 31st March, 2008, the profit and loss account and the cash flow statement of the company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the companys management. Their responsibility is to express an opinion on these financial statements based on our audit. 2. The auditors conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that they plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall financial statement presentation. They believe that their audit provides a reasonable basis for our opinion. 3. As required by the companies (Auditors report) Order, 2003 (CARO) issued by the Central Government in terms of
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Section 227(4A) of the Companies Act, 1956. They enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. (a) Further to our comments in the annexure referred to in paragraph 3 above, we report as follows : They have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; (b) in their opinion, proper books of account, as required by law, have been kept by the company, so far as it appears from our examination of those books; (c) the Balance sheet, the profit and loss account and the cash flow statement, dealt with by this report, are in agreement with the books of account; (d) in their opinion, the balance sheet, the profit and loss account and the cash flow statement, dealt with by this report, are in compliance with the accounting standards referred to in section 211(3C) of the companies Act, 1956; (e) in their opinion and to the best of our information and according to the explanations given to them the said accounts give the information required by the companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; (i) (ii) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2008 ; in the case of the profit and loss account, of the profit of the company for the year ended on that date and
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(iii) 5.
in the case of the cash flow statement, of the cash flows of the company for the year ended on that date. On the basis of the written representations received from the directors as on 31st March, 2008, and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2008 from being appointed as a director in terms of section 274(1)(g) of the companies Act, 1956.
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TO THE BOARD OF DIRECTORS OF THE INDIAN HOTELS COMPANY LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS
1. The auditors have audited the attached consolidated balance sheet of THE INDIAN HOTELS COMPANY LIMITED (the company), its subsidiaries and jointly controlled entities, (the company, its subsidiaries and jointly controlled entities together constitute the Group) as at 31st March, 2008, the consolidated profit and loss account and the consolidated cash flow statement of the group for the year ended on that date, both annexed thereto. The consolidated financial statements include investments in associates, accounted for on the equity method, in accordance with accounting standard 23 (Accounting for investments in associates in consolidated financial statements) (AS 23) and financial statements of the jointly controlled entities, accounted for in accordance with accounting standard 27 (Financial reporting of interests in joint ventures) (AS 27), as notified by the companies (Accounting standards) Rules, 2006. These financial statements are the responsibility of the companys an management. on Our responsibility is to express 2. opinion these consolidated financial
statements based on our audit. The auditors conducted our audit in accordance with the generally accepted auditing standards in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit
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includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall financial statements presentation. They believe that our audit provides a reasonable basis for our opinion. 3. (i) The auditors did not audit the financial statements of statements reflect total assets (net) of Rs. fifteen subsidiaries and two jointly controlled entities, whose financial 3,384.59 crores as at 31st March, 2008, total revenues of Rs. 937.40 crores and net cash flows amounting to Rs. 31.71 crores for the year then ended as considered in the consolidated financial statements. They have also not audited the accounts of any of the associates, which reflect the Groups share of profit (net) for the year amounting to Rs. 64.18 crores. These financial statements have been audited by other auditors, whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on their reports. (ii) The consolidated financial statements include the unaudited financial statements of two jointly controlled entities, having total assets (net) of Rs. 91.11 crores as at 31st March, 2008, total revenues of Rs. 41.20 crores and cash flows amounting to Rs. 7.15 crores for the year then ended as considered in the consolidated financial
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TAJ HOTEL LTD.
PEAG: 47
statements. The financial statements of these entities have not 4. (i) been audited but have been certified by the management. We report that the consolidated financial statements standard 21, (Consolidated financial have been prepared in accordance with the requirements of accounting statements), As 23 and AS 27, as notified by the companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited/un audited financial statements of the.
A.
TAJ HOTEL LTD.
PEAG: 48
Fixed 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 members and of the experience, company. the board commends approval for their their appointment as whole-time directors of the company to the Members appointment as directors and whole-time directors has been sought in the notice convening the annual general meeting of the company.
A.
TAJ HOTEL LTD.
PEAG: 49
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 auditors certificate regarding compliance of conditions of corporate governance.
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 reappoint M/s. Raiji & Co. chartered accountants, Mumbai as joint
A.
TAJ HOTEL LTD.
PEAG: 50
auditors for the current year and authorize the board of directors to fix their remuneration.
A.
TAJ HOTEL LTD.
PEAG: 51
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 director) Rules, 1988, the information relating to foreign exchange earnings and outgo is in Note Nos. 18, 19, 20 & 21 of the notes 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.
Directors responsibility statement

Pursuant to the provisions of section 217(2AA) of the companies Act, 1956, the board of directors, based on the representations i. received from the operating management, hereby confirms that : 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, conducted the statutory auditors and has applied them consistently and made judgements and estimates that are reasonable
A.
TAJ HOTEL LTD.
PEAG: 52
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 signe dup 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 economic, environmental and social performance.
A.
TAJ HOTEL LTD.
PEAG: 53
Profit and loss account for the year ended 31st March 2008
Sc he dul e INCOME Rooms, Restaurants, 11 1,823.1 6 1,074.3 5 85.48 94.28 1,254.1 : Unallocated during period 1,242.6 PROFIT BEFORE TAX Less : Provision for 9 580.47 198.91 4.10 377.46 331.33 708.79 1,142.6 7 474.64 152.25 322.39 156.80 479.19 1 11.42 1,617.3 1 981.62 91.44 71.89 1,144.9 5 2.28 Rupee s crores Previous year Rupee Rupee s crores s crores
Banquets and Other income EXPENDITURE Operating and General 12 Expenses Depreciation Interest (net) (Refer note 13, page 98) Total Less
Expenditure construction
transferred to fixed assets
Tax
(Refer Note 4 (a), Page 94) Less : Short provision of tax of earlier years (Net) PROFIT AFTER TAX Add : Balance brought forward from previous year Amount available for
A.
TAJ HOTEL LTD.
PEAG: 54
appropriation Appropriation : Interim dividend Tax on interim dividend Proposed dividend Tax on dividend Transfer to general reserve Balance carried forward Earnings per share (In
114.54 19.47 38.00 536.78 708.79
96.46 16.40 35.00 331.33 479.19
Rupees) Basic and
Diluted
(Refer
6.26 1.00
5.35 1.00
Note 32, page 112) Face value per equity share (In Rupees) The accompanying profit and loss account notes 13/
form an integral part of the 14
A.
TAJ HOTEL LTD.
PEAG: 55
PROFIT
&
LOSS
ACCOUNT
FOR
THE
YEAR
ENDED 31ST MARCH, 2008

Description > Rooms, Banquet & other > Expenditure Operating & General Depreciation Interest (Net) TOTAL Less : Unallocated 2006-07 Restaurants 16173 1 981.62 60.69% 91.44 5.65% 71.89 4.45% 1144.9 70.79% 5 Expenditure During construction period Transfer to fixed assets NET BLOCK Profit Before Tax Less : Provision for Tax Less : Short Provision for Tax Of earlier year Profit After Tax Add : Balance 322.39 19.93% brought 156.80 479.19 A.
2007-08
100%
1283.1 6 1074.3 5 85.48 94.28 1254.1 1
100%
58.93% 4.69% 5.17% 68.79%
2.28 0.14% 1142.6 70.65% 7 474.64 29.35% 152.25 9.41 %
11.42 1242.6 9 580.47 198.91
0.63% 68.16% 31.79% 10.91 %
4.10 377.46
0.22 % 20.70%
forward From previous year amount Available for appropriation Appreciation Interim Dividend Tax on it Interim Dividend
9.70% 29.63% -
331.33 708.79 114.54 19.47 -
18.17% 38.88% 6.28% 1.07% -
TAJ HOTEL LTD.
PEAG: 56
Tax on Dividend Proposed Dividend Transfer to General Res. Balance Carried Forward
16.40 94.46 35.00 331.33
1.01% 5.841% 2.16% 20.49%
38.00 536.78 708.79 6.26 1.00
2.08% 29.44% 38.88% 0.34% 0.05%
479.19 29.63% Earning per Share 5.35 Face value per equity share 1.00 0.33% 0.06%
A.
TAJ HOTEL LTD.
PEAG: 57
Balance sheet as 31st March 2008

Sc he dul e SOURCES OF FUNDS Shareholders funds Share capital 1 Share application money (Refer Note 2, page 93) Reserves and surplus Total Loan funds Secured loans Unsecured loans Total Long term trade deposits Deferred tax liability (Refer Note 4 (b), page 94) 3,332.2 2 APPLICATION OF FUNDS Fixed assets Gross block Less : Depreciation Net block Capital work-in-progress Investments Long term deposits 5 2,072.1 6 700.56 1,371.6 0 265.45 977.58 585.55 2014.2 9 654.24 1360.0 5 111.52 962.81 403.90 2,891.2 6 2 Rupee s crores Previous year Rupee Rupee s crores s crores
60.29 19.97 1,956.2 9 2,036.5 5
60.29 1,738.3 9 1,798.6 8 774.36 167.54 941.90 15.28 135.40
3 4
755.58 378.60 1,134.1 8 23.63 137.86
6 7
A.
TAJ HOTEL LTD.
PEAG: 58
Current
assets, loans
and 8 32.85 138.41 74.43 332.77 578.46 29.02 127.20 67.75 275.92 499.89
advances Inventories Sundry Debtors Cash & Bank balances Loans & advances Less : Current liabilities and 9 provisions Liabilities Provisions Net current assets Miscellaneous Expenditure 10 (to the extent not adjusted or written off)
401.14 46.73 447.87 130.59 1.45
291.54 156.75 448.29 51.60 1.38
3,332.2 2 The accompanying notes 13/ form an integral part of the 14 balance sheet
2891.2 6
A.
TAJ HOTEL LTD.
PEAG: 59
BALANCE SHEET
Particulars
SOURCES OF FUNDS Shareholder's Funds Share Capital Share Application Money Reserve & Surplus Loans Funds Secured loans Unsecured loans Long term deposited Differed tax Liability
2008 Rs
2007 Rs
60.29
1.81
60.29
2.09
19.97 0.60 1956.2 58.7 9 1 22.6 755.58 7 11.3
1738.3 60.1 9 3 26.7 774.36 8 167.54 5.79 15.28 0.53 135.40 4.68 2891.2 6 100
trade
378.60 6 23.60 0.71 137.86 4.41 3332.2 2 100
APPLICATION FUNDS
OF 1371.6 41.1 1360.0 47.0 5 4 111.52 3.86 33.3 962.81 0
Fixed Assets Capital work in progress Investments

0 6 256.45 7.97 9.77.5 28.3 8

A.
TAJ HOTEL LTD.
PEAG: 60
17.5 Long term deposits 585.55 7 Current Assets, Loans & Advances Inventories Sundry debtors Cash & Bank balances Loan & Advances Miscellaneous exp. Write32.85 138.41 74.43 332.77 0.99 4.15 2.23 9.99 0.01 13.4
13.9 403.90 7
29.02 127.20 67.75 275.92 1.38
1.00 4.40 2.34 9.54 0.05 15.5
off 1.45 Less (-) current Liabilities & provision
447.87 1 3332.2 2 100
448.29 0 2891.2 6 100
A.
TAJ HOTEL LTD.
PEAG: 61
# Meaning : Cash flow statement is additional information to user financial statement cash statement is a summary of cash receipt and cash payment and net change in resulting from operating, financing & investing activities of an enterprise during the given period. These statement is on of the tools for assessing the liquidity & solvency of the enterprise. # Importance of Cash Flow Statements : 1. If the finance manager has the cleat idea of cash receipt & payment cash resources can be efficiency managed. If the cash payment are planned at a time when enough cash in flow is likely. It is possible to manage business with minimum of working capital. 2. useful for financial management of dividend payment of long term loans, purchases of machines or equipments etc. if it has good idea about the timing when enough cash will be on hand.
A.
TAJ HOTEL LTD.
PEAG: 62
3. useful for control : The historical cash flow statement prepared for last year is useful for comparing the degree of cash budget and point of different may be located. 4. easy of obtaining funds : By comparing of figures cash flow statement and cash budget the cash planning and content becomes more effective liabilities are easily raise as and when they market this position improves and raise the prestige of the firm in the market.
A.
TAJ HOTEL LTD.
PEAG: 63
Cash flow statement for the year ended 31st March 2008
Rupe es crore s Cash flow from operating activities Net profit before tax Adjustments for : Depreciation Amortisation of 580.47 85.48 VRS 0.51 91.44 0.51 (24.75) (0.19) 1.95 (32.78) 71.89 (9.80) Rupees crores Previous year Rupees Rupees crores crores
expenditure Profit on sale of investments Loss / (profit) on sale of 5.98 assets Provision for doubtful debts (1.26) and advances Dividend income (19.98
) Interest (Net) 94.28 Unrealised exchange gain on (14.23 borrowings ) Provision for diminution in (0.25) value of investments written back Provision for loyalty 2.14 employee 0.93 153.60 734.07
2.01 9.67 109.95 584.59
programmes Provision for benefits
Cash operating profit before
A.
TAJ HOTEL LTD.
PEAG: 64
working capital changes Adjustments for : Trade and other receivables Inventories Trade payables
(19.56 ) (3.83) (29.24 ) (52.63) 681.44 (207.08) 474.36
(19.62) (1.74) 69.83 48.47 633.06 (112.57) 520.49
Cash
generated
from
operating activities Direct taxes paid Net cash from operating activities Cash flow from investing activities Purchase of fixed assets (259.0
(197.45) 7.26 (584.62)
0) Sale of fixed assets 2.06 Purchase of investments (64.12 (including share application ) money) Sale of investments Interest received Dividend received Long term deposits placed 7.02 19.98 (179.0
30.34 26.98 32.78 324.00 5.83 (492.97) (354.88)
with subsidiary 2) Long term deposits placed (27.74 with others ) Long term deposits refunded 0.25 y other companies Loans repaid by subsidiaries 9.17 (Loans to) / Loans repaid by (1.57) other companies (net) Net cash used to
A.
TAJ HOTEL LTD.
PEAG: 65
investing activities Cash flow from financing activities Share application collected Debenture money 19.97 (0.74) (100.25) (381.45) 256.43 82.03 (21.22) (95.10)
application 3.88 (0.69) (101.0 8) term (352.7
money collected Debenture issue costs Interest Paid Repayment of long
loans and debentures 5) Proceeds of long term loans 422.7 and debentures 3 Short term loans raised / 117.5 (Repaid) (net) Long term trade 7 deposits 8.34
raised/(Repaid) (net) Dividend paid (Including tax (112.6 on dividend) Net cash used in 4) 5.33 (13.28) 56.38
(260.30) (94.69) 115.24
financing activities Net increase / (Decrease) in cash and cash equivalents Cash and cash equivalents opening 1st April (Refer note 9 (b). page 96) Cash and Cash equivalent acquired on amalgamation Cash and cash equivalents closing 31st March (Refer note 9 (b). page 96)
43.10
35.83 56.38
A.
TAJ HOTEL LTD.
PEAG: 66
After analyzing the published annual report of Taj Hotel Ltd.. I present a project report as the requirement of my study from which I conclude my report as below; Taj Hotels Company Limited is one of the most repeated companies. The overall performance of the company is good. Some of the ratio shows very unsatisfactory position of good as compared to previous year. The turn over ratio debt equity fixed assets turn over ratio of the firm liquidity ratio shows a quite good liquid position of company. Company shows ideals funds in the company so the company must take necessary steps about this funds. Although the world is facing slowdown in economy this company has been able to maintain high profit through there is a moderate fluctuation and high dividend to the rate to its share holders from first level of analysis.
A.

105 Taj

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TAJ HOTEL LTD.

PREPARED BY PANCHAL CHAITANY A. ROLLNO: 105 S.Y.B.B.A. GUIDED BY

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

Name :- Panchal Chaitany A Roll No.: 105 SYBBA

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

LINE OF BUSINESS : hotels resorts palaces

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

Exporter of the year 2007 in the Travel Truism &

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

70 69.5 69 68.5 68 67.5 67 66.5 66 2006-07 2007-08

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

322.39 -------- * 100 = 20.92 % 1540.66 For 2008,

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

377.46 --------- * 100 = 21.39 % 1764.51

21.6 21.4 21.2 21 20.8 20.6 2006-07 2007-08 Series1

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

For 2008, EBT = + Int. = 580.47 094.28 --------674.75

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

2008 = --------- * 100 = 20.26 % 3330.77

20.5 20 19.5 19 18.5 18 2006-07 2007-08 Series1

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

18.6 18.4 18.2 18 17.8 17.6 2006-07 2007-08 Series1

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

600 500 400 300 200 100 0 2006-07 2007-08 Series1

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

30.5 30 29.5 29 28.5 2006-07 2007-08 Series1

PREPARED BY: PANCHAL CHAITANY

TAJ HOTEL LTD.

17.4 17.2 17 16.8 16.6 16.4 16.2 16 2006-07 2007-08