Indian Hotels Co Ltd Directors Report.

To the Members,

The Directors take pleasure in presenting the Third Integrated Annual Report of The Indian Hotels Company Limited (the Company or IHCL) along with the Audited Financial Statements for the Financial Year ended March 31, 2021. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Financial Results (Rs crores)
Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Revenue 1,133.15 2,743.47 1,575.16 4,463.14
Other income 110.52 134.41 164.72 132.42
Total income 1,243.67 2,877.88 1,739.88 4,595.56
Expenses Operating expenditure 1,230.05 1,982.41 1,936.92 3,495.61
Depreciation and amortisation expenses 203.81 203.78 409.63 404.24
Total Expenses 1,433.86 2,186.19 2,346.55 3,899.85
Profit/(Loss) before finance cost and tax (190.19) 691.69 (606.67) 695.71
Finance cost 294.79 237.55 402.82 341.12
Profit/(Loss) before Exceptional Items, Tax and share of equity accounted investees (484.98) 454.14 (1009.49) 354.59
Add/(Less): Exceptional Items (155.30) (16.40) 159.95 40.95
Profit/(Loss) before Tax (PBT) (640.28) 437.74 (849.54) 395.54
Tax expense (115.50) 36.33 (155.33) 44.77
Profit/(Loss) after Tax before share of equity accounted investees (524.78) 401.41 (694.21) 350.77
Add: Share of Profit/(Loss) of Associates and Joint Ventures net of tax NA NA (101.42) 12.97
Profit/(Loss) for the year (524.78) 401.41 (795.63) 363.74
Attributable to:
Shareholders of the Company (524.78) 401.41 (720.11) 354.42
Non-Controlling Interest NA NA (75.52) 9.32
Opening Balance of Retained Earnings 808.52 603.77 152.26 154.00
Adjustment on account of transition to the new lease standard, net of taxes - (106.43) - (264.32)
Profit / (Loss) for the Year (524.78) 401.41 (720.11) 354.42
Other comprehensive income / (losses) 26.36 (16.04) 29.97 (17.67)
Total comprehensive income (498.42) 385.37 (690.14) 336.75
Dividend Paid (59.46)* (59.46) (59.46)* (59.46)
Tax on Dividend - (11.72) - (11.70)
Realised gain / (loss) on sale of investment transferred from OCI - (3.01) 5.80 (3.01)
Adjustments on account of change in non-controlling interest - - (169.16) -
Closing Balance of Retained Earnings 250.64 808.52 (760.70) 152.26
*Dividend declared in FY 2019-20 and paid during the year under review

2. Dividend

The Board recommended a dividend of 0.40 per fully paid Equity Share on 118,92,58,445 Equity Shares of face value 1 each, for the year ended March 31, 2021 (Previous Year 0.50 per share).

The dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting (AGM) scheduled to be held on Tuesday, June 22, 2021. The dividend once approved by the Shareholders will be paid on and after Tuesday, June 29, 2021.

The dividend on Equity Shares if approved by the Members, would involve a cash outflow of 47.57 crores and shall be paid out of profits of the Company for previous financial years forming a part of retained earnings pursuant to Section 123(1) of the Companies Act, 2013 (the Act).

3. Transfer to Reserves

Due to losses in FY 2020-21, no amount has been transferred to Reserves. An amount of 32.39 crores was transferred from Debenture Redemption Reserve to General Reserve consequent to the redemption of Unsecured Non-convertible Redeemable Debentures of 200 crores in April 2020.

4. Companys performance

On a standalone basis, the Total Income for FY 2020-21 was 1,243.67 crores, which was lower than the previous years Total Income of 2,877.88 crores by 57% caused by the COVID-19 pandemic and efforts to curtail it. This had a severe impact on the economy in general and travel and tourism in particular. Consequently, the Company reported a Loss after tax for FY 2020-21 of 524.78 crores in comparison with a Profit after tax of 401.41 crores for FY 2019-20.

On a consolidated basis, the Total Income for FY 2020-21 was 1,739.88 crores, lower than the previous years Total Income of 4,595.56 crores by 62%. The Loss after tax attributable to shareholders and non-controlling interests for FY 2020-21 was 795.63 crores as against a Profit after Tax of 363.74 crores for FY 2019-20. The Loss attributable to shareholders of the Company for FY 2020-21 was 720.11 crores as against a profit for the previous year of 354.42 crores.

Depreciation and Finance Costs

Depreciation at 203.81 crores was in line with that of FY 2019-20. Finance costs for FY 2020-21 at 294.79 crores was higher than FY 2019-20 cost by 57.24 crores. This was mainly due to interest on increased borrowings to fund the Companys operational cash requirements and to a lesser extent, interest on lease liabilities.

Exceptional Items

Exceptional Items include an exchange gain on change in fair value of cross currency swap derivative contracts 25.00 crores (Previous Year loss of 21.76 (crores) and a provision for impairment due to losses in overseas subsidiaries of 179.52 crores (Previous Year 68.98 (crores).

Borrowings

The total long-term borrowings stood at 2,576.79 crores as on March 31, 2021 as against 1,943.32 crores as on March 31, 2020.

Debentures

During FY 2020-21, the Company raised 1,500, 7.50% Unsecured Non-convertible Redeemable Debentures of face value 10 lakhs each aggregating to 150 crores and 3,000, 7.95% Unsecured Non-convertible Redeemable Debentures of face value 10 lakhs each aggregating to 300 crores for three years each.

The Company also redeemed 2,000, 7.85% Unsecured Non-Convertible Redeemable Debentures of face value 10 lakhs each aggregating to 200 crores on April 20, 2020.

Capital Expenditure

During FY 2020-21, the Companys outlay towards capital expenditure was 140.63 crores.

Business Overview

An analysis of the Business and Financial Results are given in the Management Discussion and Analysis, which forms a part of the Annual Report.

5. Subsidiary Companies

The Company has 25 subsidiaries, 6 associates and 7 joint venture companies as on March 31, 2021. There has been no material change in the nature of the business of the subsidiaries.

During the year under review, Ideal Ice & Cold Storage Company Limited has become a wholly-owned subsidiary of IHCL, earlier being a subsidiary of Taida Trading & Industries Limited, an associate of the Company.

The Company has also increased its shareholding in IHMS Hotels (SA) (Proprietary) Limited and is now considered as a subsidiary of the Company, from earlier being a Joint Venture. Consequently, Goodhope Palace Hotels (Proprietary) Limited which was a subsidiary of IHMS Hotels (SA) (Proprietary) Limited has become an indirect subsidiary of the Company.

Pursuant to the provisions of Section 129(3) of the the Act a statement containing the salient features of financial statements of the Companys subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company at https://www.ihcltata.com/AGM/2021/ AGM-FY2021/.

6. Directors Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2020-21.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

iii. They have 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;

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. Directors and Key Managerial Personnel

In accordance with the requirements of the Act and the Companys Articles of Association, Mr. Puneet Chhatwal retires by rotation and being eligible, offers himself for re-appointment. Relevant resolutions (Ordinary and Special, as applicable) seeking shareholders approval forms part of the Notice.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 (SEBI Listing Regulations). In terms of Regulation 25 (8) of SEBI Listing Regulations they have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Board of directors of the Company has taken on record the declaration and confirmation submitted by the independent directors after undertaking due assessment of the veracity of the same. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors of the Company have confirmed that they have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014. The Independent Directors of the Company possess the requisite experience and hence shall not be required to pass the online proficiency self-assessment test as per the proviso to Rule 6(4) of the aforesaid rules.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses, if any incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Recently, on March 18, 2021, the Ministry of Corporate Affairs had notified the amendments to Sections 149(9) and 197(3) of the Act by the Companies (Amendment) Act, 2020 to enable companies faced with no profits/ inadequate profits to pay certain fixed remuneration to their Non-Executive Directors (including Independent Directors) in accordance with the provisions of Schedule V to the Act.

In view of the valuable services being rendered by the Non-Executive Directors (including Independent Directors) to the Company, the Board of Directors, on the recommendations of the Nomination and Remuneration Committee (NRC) approved a fixed remuneration to be payable to them for FY 2020-21, 2021-22 and 202223 in case of no profits/ inadequate profits in each of

these years, subject to the approval of the Members at this AGM. The details of the remuneration to be paid for the FY 2020-21 are captured in the Corporate Governance Report.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2021 are:

• Mr. Puneet Chhatwal - Managing Director & Chief Executive Officer

• Mr. Giridhar Sanjeevi - Executive Vice President & Chief Financial Officer

• Mr. Beejal Desai, Senior Vice President - Corporate Affairs & Company Secretary (Group)

8. Number of Meetings of the Board

Six meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms a part of the Annual Report.

9. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and Structure; Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the longterm strategic planning, etc.); Effectiveness of board processes, information and functioning, etc.; Extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

At the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.

10. Policy on Directors Appointment and Remuneration and other Details

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on https://www.ihcltata.com/board diversity director attributes.pdf and https://www. ihcltata.com/Remuneration Policy KMP Directors Employees.pdf.

11. Vigil Mechanism

The Company has established the necessary vigil mechanism for directors and employees in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about unethical behaviour. The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on https://www.ihcltata.com/Whistle Blower Policy. pdf.

12. Internal Financial Control Systems and their Adequacy

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which forms a part of the Annual Report.

13. Audit Committee

The details including the composition of the Audit Committee including attendance at the Meetings and terms of Reference are included in the Corporate Governance Report, which forms a part of the Annual Report.

14. Auditors

At the 116th AGM held on August 21, 2017 the Members approved appointment of B S R & Co. LLP (BSR), Chartered Accountants (Firm Registration No. 101248W/W-100022) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of the 116th AGM till the conclusion of the 121st AGM, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

15. Corporate Social Responsibility

The Company has revised the policy on Corporate Social Responsibility (CSR) to include changes based on Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and the revised policy was recommended by the CSR and Sustainability Committee and approved by the Board and the same can be accessed on the Companys website at https://www. ihcltata.com/CSR Policy.pdf.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy)

Amendment Rules, 2021. For other details regarding the CSR and the Sustainability Committee, please refer to the Corporate Governance Report, which is a part of this report.

16. Auditors Report and Secretarial Audit Report

The Statutory Auditors Report and the Secretarial Auditors Report do not contain any qualifications, reservations, or adverse remarks or disclaimer.

Secretarial Auditors Report is attached to this report as Annexure II.

17. Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Risk Management section, which forms a part of the Annual Report.

18. Particulars of Loans, Guarantees or Investments

Your Company falls within the scope of the definition "infrastructure company" as provided by the Act. Accordingly, the Company is exempt from the provisions of Section 186 of the Act with regards to Loans, Guarantees, Securities provided and Investments. Therefore, no details are provided.

19. Related Party Transactions

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Companys website at https://www.ihcltata.com/RPT.pdf.

During the year under review, all Related Party > Transactions that were entered into were in the

F Ordinary Course of Business and at Arms Length Basis.

All transactions entered into with related parties were approved by the Audit Committee.

l Further in the FY 2020-21, there were no material transactions of the Company with any of its related parties. Therefore, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the FY 2020-21 and hence the same is not provided.

20. Annual Return

As provided under Section 92(3) and 134(3)(a) of the Act, I read with Rule 12 of Chapter VII Rules of the Companies

(Management and Administration) Amendment Rules, . 2020, Annual Return in Form MGT-7 for FY 2020-21 is uploaded on the website of the Company and can be l accessed at https://www.ihcltata.com/AGM/2021/ _ AGM-FY2021/.

21. Particulars of Employees

The information required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and ; Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure III to this report.

The statement containing names of top ten employees Rs in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for I inspection and any Member interested in obtaining a I copy of the same may write to the Company Secretary.

22. Disclosure Requirements

As per SEBI Listing Regulations, the Corporate Governance Report with the Practicing Company

Secretarys Certificate thereon, and the Management Discussion and Analysis are attached as a separate section which forms a part of the Annual Report.

As per Regulation 34 of the SEBI Listing Regulations, the Business Responsibility Report forms a part of the Annual Report.

As per Regulation 43A of the SEBI Listing Regulations, the Dividend Distribution Policy is disclosed in the Corporate Governance Report and is uploaded on the Companys website at https://www.ihcltata.com/ Dividend Distribution Policy.pdf.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

23. Deposits from Public

The Company does not accept and/or renew Fixed Deposits from the general public and shareholders. There were no over dues on account of principal or interest on public deposits other than the unclaimed deposits at the end of FY 2020-21 which is 45,000/- (Previous year 260,000/-).

24. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo [Pursuant to Companies (Accounts) Rules, 2014]

A. Conservation of Energy: The Company has a longstanding history of stewardship through efficient management of all its assets and resources. The Companys conscious efforts are aligned with the Tata ethos of keeping communities and environment at the heart of doing business. In line with IHCLs commitment to safeguard the environment, we have been the flagbearers of responsible tourism through elimination of two million plastic straws across all our properties. Our renewable energy proportion has improved to

22% from 7% in the past five years. In this rapidly transforming world, our sustainability goals will certainly evolve as our industry grow and as per the needs arising in the society.

B. Technology Absorption: There is no material information on technology absorption to be furnished. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.

C. Foreign Exchange Earnings and Outgo:

• Earnings : 56.74 crores

• Outgo : 47.32 crores

25. Material changes and commitment affecting the financial position of the Company

The impact of COVID-19 on the Companys financial statements has been given in Note 2(d) of the notes to financial statements for the year ended March 31, 2021 and the Companys response to the situation arising from the pandemic has been explained in the Management Discussion and Analysis, which forms a part of the Annual Report.

26. Significant and material orders passed by the regulators

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operations. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the Financial Statement.

27. Cost Auditors

Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company.

28. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act)

The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Companys website at https://www.ihcltata. com/POSH Policy.pdf.

Status of complaints as on March 31, 2021

Sl. No. Particulars Number of Complaints
i. Number of complaints filed during the financial year 9
2. Number of complaints disposed off during the financial year 8
3. Number of complaints pending at the end of the financial year 1

29. Integrated Report

With the corporate landscape rapidly evolving, Integrated Reporting has been an ideal tool to explore value creation. The Company being one of the top companies in the country in terms of market capitalisation, has voluntarily provided Integrated Report, which encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Companys long-term perspective.

The Company has progressed in the journey of Integrated Reporting and is focused on driving more authentic, comprehensive and meaningful information about all aspects of the Companys performance and value creation story delivering benefits for both internal and external stakeholders.

The Report also touches upon aspects such as organisations strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

30. Acknowledgement

The Directors thank the Companys customers, vendors, investors and academic partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

The Directors appreciate and value the contribution made by all our employees and their families and the contribution made by every other member of the IHCL family, for making the Company what it is.

On behalf of the Board of Directors
N. Chandrasekaran
Chairman
Mumbai, April 30, 2021 (DIN:00121863)