MIRA INFORM REPORT

Report Date :

04.11.2006

IDENTIFICATION DETAILS

Name :	THE INDIAN HOTELS COMPANY LIMITED
Registered Office :	Mandlik House, Mandlik Road, Mumbai – 400001, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	01.04.1902
Com. Reg. No.:	11-183
CIN No.: [Company Identification No.]	L74999MH1902PLC000183
TAN No.: [Tax Deduction & Collection Account No.]	MUMI01878C
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	The company is engaged in the business as Hoteliers and Caterers.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 68500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and highly reputed company in hotel industry. Subject is managed by TATA GROUP, a premier industrial house in the country. Available information indicates high financial responsibility of the company. Their trade relations are fair. Financial position is sound. Payments are always correct and as per commitments.

LOCATIONS

Registered Office :	Mandlik House, Mandlik Road, Mumbai – 400001, Maharashtra, India
Tel. No.:	91-22-66395515
Fax No.:	91-22-22027442
E-Mail :	tajlakepalace.udaipur@tajhotels.com sumit.guha@tajhotels.com ks.srinivasan@tajhotels.com pradip.rao@tajhotels.com deepa.harris@tajhotels.com
Website :	http://www.tajhotels.com
Overseas Office :	Nepal, Sri Lanka, Oman, Maldives, London, Yemen, Dubai.
Branches :	India Locations New Delhi, Jaipur, Jaisalmer, Agra, Lucknow, Gwalior, Khajuraho, Indore, Ahmedabad, Vadodara, Nashik, Mumbai, Aurangabad, Hyderabad, Visakhapatnam, Chennai, Bangalore, Ooty, Madurai, Thekkady, Varkala, Calicut, Kumarakom, Goa, Chiplun, Sasangi, Sawai Madhopur, Cochin.

DIRECTORS

Name :	Mr. Ratan N. Tata
Designation :	Chairman
Name :	Mr. R. K. Krishna Kumar
Designation :	Vice Chairman
Name :	Mr. Raymond N. Bickson
Designation :	Managing Director
Date of Birth/Age :	16/12/1955
Qualification :	Advanced Management Program at Harvard Business School in Boston Also studied at the Goethe Institute in Berlin, the Alliance Francaise in Paris, the University De Sorbonne in Paris, L’ecole Hotelliere, Lausanne Cornell University in New York
Date of Appointment :	19/07/2003
Name :	Dr. J. J. Bhabha
Designation :	Director
Name :	Mr. S. K. Kandhari
Designation :	Chairman
Name :	Mr. N. A. Soonawala
Designation :	Chairman
Name :	Dr. Zubin Dubash
Designation :	Whole-time Director
Name :	Mr. K. B. Dadiseth
Designation :	Director
Name :	Mr. Deepak Parekh
Designation :	Director
Name :	Mr. Jagdish Capoor
Designation :	Chairman
Name :	Mr. Tejendra Khanna
Designation :	Director
Name :	Mr. Shapoor Mistry
Designation :	Director
Name :	Mr. B. D. Nariman
Designation :	Company Secretary

KEY EXECUTIVES

Name :	Mr. Raymond N. Bickson
Designation :	Managing Director
Name :	Mr. Anil P. Goel
Designation :	Senior Vice President - Finance
Name :	Mr. Ajoy K. Misra
Designation :	Senior Vice President - Sales & Marketing
Name :	Mr. Yogi Sriram
Designation :	Senior Vice President - Human Resources
Name :	Mr. Prakash Shukla
Designation :	Senior Vice President - Technology & CIO
Name :	Mr. Rajiv Gujral
Designation :	Senior Vice President - Mergers, Acquisitions & Development
Name :	Fatma Zakaria
Designation :	Senior Vice President - Taj Magazine
Name :	Mr. Franz Zeller
Designation :	Chief Operating Officer - Luxury SBU
Name :	Ms. Jyoti Narang
Designation :	Chief Operating Officer - Business SBU
Name :	Mr. Jamshed S. Daboo
Designation :	Chief Operating Officer - Leisure SBU
Name :	B. D. Nariman
Designation :	Senior Vice President - Legal & Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	16589787	29.28
Directors and Their Relatives	40994	0.07
Global Depository Report	519354	0.92
Nationalised Banks	267219	0.47
Mutual Funds	3647785	6.44
Financial Institutions	5574435	9.84
Insurance Companies	3288645	5.80
Foreign Institutional Investors	12655900	22.33
Non Resident Indians	271160	0.48
Corporate Bodies	2396159	4.23
Resident Individuals and HUF	11070764	19.54
NSDL and CDSL Clearing Members	343206	0.60
Total	56665408	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in the business as Hoteliers and Caterers.

Products :

Item Code No.	Product Description
Not Applicable	Hoteliering & Catering

Imports from :

Europe and U.S.A.

Terms :

Purchasing :

L/C

GENERAL INFORMATION

No. of Employees :

7540

Bankers :

The Hongkong and Shanghai Banking Corporation Limited, Mumbai

Standard Chartered Bank, Mumbai

Citibank N.A., Mumbai

Facilities :

Facility	As on 31^st March, 2006 [Rs. in Millions]
Secured Loans
From Banks
Bank Overdraft	100.000

Banking Relations :	Satisfactory
Auditors :	Ø N. M. Raiji & Company Chartered Accountants Ø S. B. Billimoria & Company Chartered Accountants
Associates:	v The Taj Mahal Hotel, Mumbai v Taj Palace Hotel, New Delhi v Taj Krishna, Hyderabad, Andhra Pradesh v Taj Residency, Bangalore v Taj Residency Ummed, Ahmedabad, Gujarat v Taj Connemara, Chennai v Blue Diamond, Pune, Maharashtra v Fort Aguada Beach Resort, Goa v Taj View Hotel, Agra, Uttar Pradesh v Taj Hari Mahal, Jodhpur, Rajasthan v Rambagh Palace, Jaipur, Rajasthan v Lake Palace, Udaipur, Rajasthan v Taj Samudra, Colombo v Airport Garden Hotel, Colombo v Crowne Plaza ST. James, London v Sohar Beach Hotel, Oman v Taj Coral Reef Resort, Maldives v Taj Padmodzi Hotel, Lusaka, Zambia v Taj Madurai v Kuteeram, Bangalore v Gateview River View Lodge, Chiplun, Maharashtra v and many others v Oriental Hotels Limited Taj Coromandel, Chennai v Taj Malabar, Cochin v Taj Residency, Visakhapatnam v Covelong Beach Hotels Limited Manjarun Hotel, Mangalore v Taj Garden Retreat, Coonoor v Fisherman's Cove, Chennai, v Taj Garden Retreat, Madurai v Piem Hotels Limited Hotel President, Mumbai v Taj Residency, Indore v Taj Residency, Bangalore v Taj View, Agra v Taj Residency, Nasik v Indian Resorts Hotels Limited Fort Aguada Beach Resort, Goa v Aguada Hermitage, Goa v Taj Kerala Hotels and Resorts Taj Residency, Ernakulam v Taj Garden Limited Retreat, Kumarakom v Taj Garden Retreat, Vakala v Taj Garden Retreat, Thekkady v Taj GVK Hotels and Resorts Limited Taj Krishna, Hyderabad v Taj Residency, Hyderabad v Taj Banjara, Hyderabad v Benaras Hotels Limited Taj Ganges, Benaras v Taj Karnataka Hotels & Resorts Taj Garden Retreat, Chikmagalur Limited v Gateway Hotels & Gateway Resorts Gateway Hotel, Bangalore Limited v Taj SATS Air Catering Limited
Subsidiaries:	v Taj Investment & Finance Company Limited v KTC Hotels Limited Taj Residency, Calicut v Asia Pacific Hotels Limited Taj Exotica, Goa v Taj International Hotels (H.K.) Limited, Hongkong v St. James Court Hotel Limited, St. James Court, London 51, Buckingham Gate Apartment, London, U.K. (Formerly SJCHL Limited and Trushelfco (No. 2587) Limited) v SJCHL Limited (Formerly St. James Court Hotel Limited) v Chieftain Corporation NV, Netherlands v Ihoco BV, Amsterdam v Taj International Hotels Limited, London, U.K. v Bombay Brasserie Limited, London, U.K. v International Hotel Management Service Inc., New York, U.S.A. v Taj Asia Limited v United Hotels Limited Ambassador Hotel, Delhi v Roots Corporation Limited v Taj SATS Air Catering Limited
Joint Ventures:	v Taj SATS Air Catering Limited v Taj GVK Hotels and Resorts Limited v Taj Karnataka Hotels and Resorts Limited v Taj Madras Flight Kitchen Private Limited v Taj Kerala Hotels And Resorts Limited v Taj Asia Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Ordinary Shares	Rs. 10/- each	Rs. 1000.000 Millions
10000000	Cumulative Redeemable Preference Shares	Rs. 100/- each	Rs. 1000.000 Millions
	TOTAL		Rs. 2000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
56665408	Ordinary Shares	Rs. 10 /- each	Rs. 566.700 Millions
Add :	Share Application Money		Rs. 17.400 Millions
	TOTAL		Rs. 584.100 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		584.100	502.500	451.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		16578.300	10818.000	8447.900
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		17162.400	11320.500	8899.100
LOAN FUNDS
1] Secured Loans		4237.300	4334.500	4613.700
2] Unsecured Loans		1206.100	5748.800	9111.800
TOTAL BORROWING		5443.400	10083.300	13725.500
Trade Deposit		333.800	437.000	399.100
DEFERRED TAX LIABILITIES		800.500	823.600	709.100
TOTAL		23740.100	22664.400	23732.800
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		8919.700	8852.000	8131.300
Capital work-in-progress		0.000	0.000	0.000
Long Term Deposits		3856.900	2172.800	2115.600
INVESTMENT		6565.700	6070.100	6008.300
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	258.500	238.300	203.200
	Sundry Debtors	796.400	709.900	676.900
	Cash & Bank Balances	901.300	548.000	6114.300
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	6013.700	7431.300	2878.900
Total Current Assets		7969.900	8927.500	9873.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2079.400	1828.300	1507.800
	Provisions	1504.200	1546.300	909.700
Total Current Liabilities		3583.600	3374.600	2417.500
Net Current Assets		4386.300	5552.900	7455.800
MISCELLANEOUS EXPENSES		11.500	16.600	21.800
TOTAL		23740.100	22664.400	23732.800

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	11275.700	8732.400	6960.700
Profit/(Loss) Before Tax	2720.000	1416.800	802.000
Provision for Taxation	882.200	358.200	195.500
Profit/(Loss) After Tax	1837.800	1058.600	606.500
Export Value	5613.600	3941.800	2976.500
Import Value	174.000	154.200	123.100
Total Expenditure	8555.700	7545.500	6624.900

QUARTERLY RESULTS

PARTICULARS	30.06.2006 [1^st Qtr.]	30.09.2006 [2^nd Qtr.]
Sales Turnover	2573.400	2666.600
Other Income	126.600	266.100
Total Income	2700.000	2932.700
Total Expenditure	1914.200	2093.500
Operating Profit	785.800	839.200
Interest	39.800	36.800
Gross Profit	746.000	802.400
Depreciation	170.000	170.000
Tax	186.800	163.700
Reported PAT	385.000	462.200

Notes

2006-06 Quarter 1

Expenditure Includes Consumption of Raw Materials Rs 228.50 million Staff Cost Rs 590.40 million License Fees Rs 269.10 million Fuel, Power & Light Rs 183.90 million Other Expenditure Rs 642.30 million Tax Includes Provision for Provision for Tax Payable Rs 177.80 million Deferred Tax Rs 4.20 million Fringe Benefit Tax Rs 9.00 million EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The Income from operations for the quarter ended June 30, 2006, grew by 27% over the corresponding quarter of the preceding year, driven by increase in arrivals into India together with growth in domestic travel. 2. For the quarter ended June 30, 2006, the PBT at Rs 576.00 million and the PAT at Rs 385.00 million, improved by 123% and 128%, respectively, over the corresponding quarter of the preceding year. 3. In view of the seasonality of the business, the financial results for the first quarter are not indicative of the full year's performance. 4. The Company had raised US$ 150 million through an issue of Foreign Currency Convertible Bonds (FCCB) in February 2004. As at July 26, 2006 conversion requests aggregating to US$ 147.14 million had been received by the Company. This has resulted in an increase in the Non- Promoter holding in the Company's Share Capital to 71.60%. 5. Staff costs for the quarter ended June 2006 include a provision of Rs 8.00 million as a result of complying with the new guidelines of the Accounting Standard 15 issued by ICAI on accounting for Employee Benefits and consequently Profit before Tax for the quarter is lower to the extent of the same amount. The adjustments on account of the transitional provisions of the Standard will be dealt with in the General Reserve at the year end. 6. Disclosure of segment-wise information is not applicable as hotliering is the Company's only business segment. 7. Figures for the previous quarter have been restated wherever necessary to conform to the current quarter's presentation. 8. The aforementioned results were reviewed by the Audit Committee of the Board and subsequently taken on record by the Board of Director at its meeting held on July 27, 2006. The results for the quarter ended June 30, 2006 have been audited by the Statutory Auditors of the Company.

2006-09 Quarter 2

Expenditure Includes Consumption of Raw Materials Rs 235.20 million Staff Cost Rs 605.60 million License Fees Rs 279.60 million Fuel, Power & Light Rs 193.10 million Other Expenditure Rs 780.00 million Tax Includes Provision for Provision for Tax Payable Rs 152.70 million Deferred Tax Rs 6.50 million Fringe Benefit Tax Rs 11.00 million EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Sales and Operating Income for the quarter ended September 30, 2006, grew by 28% over the corresponding quarter of the previous year, driven by buoyant demand conditions. 2. For the quarter ended September 30, 2006, the Profit before Tax at Rs 632.40 million and the Profit after Tax at Rs 462.20 million., improved by 73% and 75%, respectively, over the corresponding quarter of the previous year. 3. Staff costs include a provision of Rs 8.00 million for the quarter ended September 30, 2006 and Rs 16.00 million for the half year ended on that date as a result of complying with the revised Accounting Standard 15 on 'Employee Benefits' issued by The Institute of Chartered Accountants of India. Consequently, Profit before Tax for the quarter and the half year ended September 30, 2006 is lower to the same extent. The adjustment on account of the transitional provisions of the Standard will be dealt with in the General Reserve at the year end. 4. In view of the seasonality of the Company's business, the financial results for the periods ended September 30, 2006 are not indicative of the full year's performance. 5. The Company had raised US$ 150 million through an issue of Foreign Currency Convertible Bonds (FCCB) in February 2004. Of the total issue, FCCB amounting to US$ 147.14 million have been converted to Equity Shares as at September 30, 2006. We have since received applications for conversions amounting to US $ 2.86 million. 6. During the quarter ended September 30, 2006 the Company further acquired 80.10% of the share capital of Taj Lands End Limited (TLEL), effectively making TLEL a wholly owned subsidiary of the Company. 7. The Board of Directors at its meeting held on October 12, 2006 approved the amalgamation of Asia Pacific Hotels Limited, Indian Resort Hotels Limited, Gateway Hotels and Getaway Resorts Limited, Taj Lands End Limited, and Kuteeram Resorts Private Limited with the Company with effect from April 01, 2006. The Scheme of Amalgamation (Scheme) has been filed with the stock exchanges for necessary approvals, upon receipt of which, the Scheme would be filed with the respective Honourable High Courts. 8. The Company has executed a Letter of Intent with the owners of the Ritz Car Hotel, Boston for the outright purchase of the hotel for US$ 170 million. The Sale and Purchase Agreement is scheduled to be executed in early November, 2006 with transaction closure targeted for early January, 2007. The Company will finance the equity component required for funding this transaction from its unutilized FCCB proceeds. 9. Equity shares of the Company having face value of Rs 10 each were subdivided into 10 equity shares of Re 1 each vide resolution passed by the members on September 21, 2006. Accordingly, the number of shares shown under 'Public Shareholding' as at September 30, 2006 represents shares of Re 1 each as against shares of Rs 10 each shown for the previous periods. 10. The Earnings per share (EPS) for all previous periods disclosed have been recast to make them comparable with the EPS of the quarter and half year ended September 30, 2006 in compliance with the requirements of the Accounting Standard 20 on 'Earnings per Share' issued by The Institute of Chartered Accountants of India, consequent upon the sub-division of shares referred to in Note 9. 11. Disclosure of segment-wise information is not applicable as hoteliering is the Company's only business segment. 12 Figures for the previous periods have been restated wherever necessary to conform to the current period's presentation. 13 The results for the half year ended September 30, 2006 have been audited by the Statutory Auditors of the Company. The aforementioned results were reviewed by the Audit Committee of the Board and subsequently approved by the Board of Directors at its meeting held on October 31, 2006.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.57	1.22	1.22
Long Term Debt Equity Ratio	0.55	1.11	1.05
Current Ratio	2.30	2.40	2.07
TURNOVER RATIOS
Fixed Assets	0.85	0.77	0.74
Inventory	43.65	38.40	35.68
Debtors	14.40	12.22	9.99
Interest Cover Ratio	7.21	3.41	2.21
Operating Profit Margin (%)	35.14	26.44	21.79
Profit Before Interest and Tax Margin (%)	29.06	19.75	14.49
Cash Profit Margin (%)	23.03	17.17	13.32
Adjusted Net Profit Margin (%)	16.95	10.47	6.02
Return on Capital Employed (%)	14.10	7.47	4.90
Return on Net Worth (%)	12.93	8.80	4.51

STOCK PRICES

Face Value	Rs. 10/-
High	Rs. 143.00/-
Low	Rs. 136.00/-

LOCAL AGENCY FURTHER INFORMATION

The company is better known as The Taj Group of Hotel set up in the early twentieth century and has since emerged as one of the leading players in the domestic hospitality sector in India and overseas.

The company is India’s largest hotel company and focuses on the luxury, leisure and business travel segment. It owns and operates eight luxury hotels in Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Lucknow in India and Colombo in Sri Lanka. It also operates six business hotels in emerging business cities in India. Its leisure hotels include palace hotels, garden retreats, resorts hotels and cultural hotels of various locations in India, Nepal and Sri Lanka. It also owns/operates several hotel properties overseas in U.S.A., U.K., Middle East and Africa.

Indeed the company has spanned the length and breadth of the country, gracing important industrial towns and cities, beautiful beaches, hill stations, historical and pilgrim centres and wildlife destinations. Over the years, the company has won international acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors. The company's operation covers over 60 hotels in India and abroad, and encompass a number of brands across various price segments.

The company has a dominant position in most areas it is present in Providing world class personalized service to guests while authentically reproducing the traditions and heritage of India, has made the ‘TAJ’ brand a symbol of luxury and services the world over. The company is grouped into strategic business units to get consistency across the different units in the same brand and standardize the product and service across the brands, making them distinct and identifiable. These brands have been classified as Luxury, Business and Leisure.

During the year 1999-2000, the company entered into an alliance with the GVK group in Hyderabad to form an associate company Taj GVK-Resorts and Hotels.

In the year 2001-2002, the company hived off its air catering business to a new joint venture company, Taj SATS Air Catering. The company will hold 51% equity with Singapore Airport Terminal Services (SATS), a subsidiary of Singapore International Airlines having the balance 49%.

During the year 2002-03, the company was attempting to simplify the structure of the group by merging various subsidiaries together to build better transparency and better definition of business areas. There are in all about 57 subsidiaries and associate companies. The company plans to bring this number to about 30 in due course of time. In the year 2002-2003, 19 of these companies were dealt with.

The company plans to increase the value of Taj brand in premium hotel properties such as palaces, super deluxe and luxury hotels. For this the group will adopt renovation, upgradation and acquisition route to sustain its leadership. It also plans to introduce a chain of budget hotels and four-star hotels in smaller cities, where the potential for growth is immense. The budget hotel brand will be distinct from the Taj brand and the company plans to have a chain of new properties under this brand. It will foray into new segment of service apartments, the first one being the Wellington Mews in Mumbai, which was scheduled to be opened within a year's timeframe.

The group has acquired one of ITDC's properties under construction at Chandigarh for Rs. 190.0 millions through its associate company Taj GVK Hotels and Resorts. In September 2002 the company along with ICICI Trustee Services (I-Ventures) has acquired Lokhandwala Hotel's (LHL), Regent Hotel at Bandra in Mumbai for a total consideration of Rs. 4520.0 millions including transaction costs. This marks the company's much-awaited entry into the fast growing North Mumbai market.

The company is in the process of launching its first services Luxury Residences in South Mumbai.

INCOME

The total income for the year ended March 31, 2006 at Rs. 11275.7 millions was higher than that of the previous year by 29%. During the year under report, the Company crossed the Rs. 10000 millions landmark for the first time. 

Room Income was higher than the previous year by 33%. The Average Room Rate (ARR) increased by 31% over the previous year, contributing significantly to the total increase in room income, with a sizeable increase attributable to higher room inventory as well. 

Food & Beverage (F&B) income was 21% higher than the previous year. Out of the aggregate increase in F & B income, Rs. 73 millions was on account of new outlets at Taj Mahal Palace and Tower, Mumbai, Taj West End, Bangalore and Taj Connemara, Chennai. Banquets income grew by 26% over the previous year. 

PROFITS

Profit before Extraordinary Items and Tax at Rs. 2720.000 millions was significantly higher than the previous year by 129%. 

Profit before Tax at Rs. 2720 millions and Profit after Tax at Rs. 1837.800 millions were also significantly higher by 92% and 74%, respectively over the previous year. 

DIVIDEND

The Directors are pleased to recommend a dividend of 130% or Rs.13/- per Ordinary Share in respect of the year ended March 31, 2006. Dividend at the same rate is also recommended to be paid on those Ordinary Shares that may be allotted by the Company on conversion of FCCB's issued by the company up to July 18, 2006, (as per the prevailing rules) being the commencement date of the closure of the Company's Register of Members and Share Transfer Books.  

BUSINESS OVERVIEW

The Travel and Tourism Industry worldwide has grown significantly during 2005-06. This has been a year of buoyancy and further consolidation on the gains made by the Tourism Industry globally since 2004-05. On the back of a successful year that the Industry witnessed in 2004-05, barring the effect of the tsunami, the growth trend continued.  

As per the revised estimates released by the Central Statistical Organization, real GDP grew at the rate of 8.4 per cent during 2005-06. Against the annual average growth rate of 8% envisaged in the Tenth Five Year Plan (2002-03 to 2006-07), the average rate is estimated to have been 7% in the first four years ending in 2005-06. 

Services Sector growth continues to be broad based with the three sub sectors namely Trade, Hotels, Transport and Communications. Services continue to lead by growing at double digit rates for the third successive year.  

The business outlook for the year ahead is expected to be positive. General economic conditions remain bullish for the coming year. The hotel industry expects this bullishness to drive tourist traffic globally and in the domestic market. This will drive business travel into India and the hospitality industry would benefit. The company is actively pursuing targeted destinations to take advantage of the business potential in those markets. Notwithstanding the fact that several international hotel chains and domestic business houses have made announcements about their foray into the various segments of the hospitality industry, the domestic market continues to present a favourable demand-supply position vis-a-vis the company. This, coupled with the increasing attraction of India as a tourist destination for business and leisure, presents the hospitality industry with an opportunity to consolidate on the gains of 2005-06 and look forward to a sustainable profitable growth in the years to come. The company, being a leader in most markets in the luxury and leisure segments, expects to achieve sustained growth in turnover and profitability. 

AWARDS

Subject has been the recipient of many awards a few of which are :

• Taj Hotel voted the Best Hotel Group in India in the 2003 Selling Long Haul Travel Awards by Travel Agents, UK
• India brand Summit Award for Brand Leadership Hospitality presented to Taj Group of Hotels.
• PATA Gold Awards 2003 (Pacific Asia Travel Association) Category : Corporate Environmental Programme – The Taj Group of Hotel for the ECOTAJ Environmental Initiatives.
• Conde Nast Traveler 2004 Gold List World’s Best Places to Saty – Taj Mahal Palace and Tower, Mumbai and Taj Lake Palace, Udaipur.
• 2004 Tatler Travel Guide Awards, USA- the World’s 101 Best Hotels, 51 Buckingham Gate in the “Best for Families” section, the Taj Mahal Palace and Tower, Mumbai in the “Best for Wi-fi” and Jai Mahal Palace, Jaipur in the “Best Spas” section.
• 10^th World Travel Awards, voted by travel agents worldwide. The Gala Awards Ceremony took place on the 13^th October at The Plazas New York

n Asia’s Leading Hotel – The Taj Mahal Hotel, Mumbai

n Indian Ocean’s Leading Resort – Taj Exotica Resort, Maldives

n Posthumous Award- MR. J. R. D. Tata

• 2003 World’s Best Business Hotels- Readers of Travel and Leisure have named the Taj Mahal Hotel, Mumbai the winner.
• 51 Buckingham Gate – Conde Nast Johansens ‘Most Excellent London Hotel 2004’.
• American Academy of Hospitality Sciences and Five Star Diamond Award 2003 51 Buckingham Gate.
• Fort Aguada Beach Resort, Goa and its Spa Aguada have been chosen as India’s best RESORT and SPA in the respective categories by the World Travel Awards held at the recently concluded World Travel Mart at London – 2003.

FIXED ASSETS

The company’s fixed assets of important value include Freehold Land, Leasehold Land, Buildings, Plant & Machinery, Furniture, Fixtures & Office Equipments and Vehicles.

WEBSITE DETAILS

Profile
The Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces, recognized as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Jamsetji N Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay, in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. Taj Hotels Resorts and Palaces comprises 59 hotels at 40 locations across India with an additional 17 international hotels in the Maldives, Mauritius, Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.

The company has had a long-standing commitment to the continued development of the Indian tourism and hospitality industry. From the 1970s through the 1990s, the Taj played an important role in launching several of India's key tourist destinations. Working in tandem with the Indian government, the Taj developed resorts and retreats while the government developed roads and railways to India's hidden treasures.

Areas of business

Taj Hotels Resorts and Palaces is grouped into Luxury, Leisure and Business categories to provide consistency across the different hotels and standardize products and services.

As early as 1974, the Taj opened India's first international beach resort — Fort Aguada Beach Resort — in Goa. Today, Goa is one of South Asia's most popular beach resort destinations.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Sydney, Tokyo and the USA.

During the past year Taj Hotels strengthened its presence in the Indian Ocean rim. Taj Exotica Resort & Spa, Mauritius, opened its doors to guests. End-2005 saw the unveiling of the entirely renovated and upgraded Taj Exotica Resort & Spa, Maldives.

Taj Hotels further expanded its global footprint by securing management contracts at Palm Island, Jumeirah in Dubai, Langkawi in Malaysia and Thimpu in Bhutan. The most significant addition to the portfolio has been The Pierre, the iconic landmark hotel on New York's Fifth Avenue.

It operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala.

It also operates Taj Sats Air Catering, the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.

Taj Wellington Mews Luxury Residences is a complex of 80 luxurious serviced apartments in South Mumbai. This is a new foray in the service apartments category.

Additionally, Taj Hotels Resorts and Palaces established the Indian Institute of Hotel Management, Aurangabad in 1993. The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European programmes.

Associate companies and joint ventures

The Indian Hotels Company is the Taj Hotels Resorts and Palaces' parent company, owning around a third of the group's inventory of rooms. The balance of room inventory is with associate companies and joint ventures.

Corporate social responsibility

The key theme of corporate social responsibility at the company is to build livelihoods with a clear focus on women, craftsmen and artisans; and the education of children. Employees of all hotels and the corporate offices contribute and actively participate in numerous on-going events and projects. The core competencies of the hospitality business have been utilised to make these themes truly relevant and meaningful.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 45.16
UK Pound	1	Rs. 85.99
Euro	1	Rs. 57.92

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions