TajGVK Hotels & Resorts Ltd Directors Report.

Dear Shareholders,

Your Directors have pleasure in presenting the Twenty Fourth Annual Report of the Company together with the Consolidated and Standalone Audited Accounts for the year ended 31st March, 2019.


The performance of the Company for the financial year ended 31st March, 2019 is as below:

(Rs. In Crores)

Standalone Consolidated
Particulars 2018-19 2017-18 2018-19 2017-18
Total Revenue 324.09 290.88 324.09 290.88
Operating expenses 247.68 216.82 247.60 216.82
Depreciation 16.70 17.27 16.70 17.27
Finance cost 21.58 24.97 21.58 24.97
Profit Before Tax 38.13 32.20 38.05 32.20
Tax expense:
Current tax 12.37 7.40 12.37 7.40
Deferred tax 1.03 3.61 1.03 3.61
Short provision of tax of earlier years 0.41 - 0.41 -
Profit After Tax 24.32 21.19 24.24 21.19
Total Comprehensive Income for the year 24.24 21.19 27.11 20.57
Share of profit / (loss) from joint venture - - 2.88 (0.62)
Profit brought forwardfrom year previous 231.18 212.93 219.61 201.98
Profit available for appropriation 255.42 234.12 246.73 222.55
Less: Dividend paid 3.76 2.51 3.76 2.51
Less: Dividend tax 0.66 0.43 0.66 0.43
Profit carried forward to Balance Sheet 251.00 231.18 242.31 219.61
Earnings per share (Rs.) 3.87 3.38 4.32 3.28


The total income for the year ended 31st March, 2019 increased by Rs.33.21 crores or 11% to Rs.324.09 crores, within the total income the Room Revenue increased by 8.50% mainly on account of improved Average Room Revenue (ARR) and occupancies. Food & Beverages (F&B) increased by 9.50% over the last year aided by growth in Banqueting Income. The Company could achieve higher Room and F&B Income for the year under review, due to buoyancy in the markets, where the Company Hotels are located mainly aided by higher occupancy and improved Banqueting business.

The occupancy increased from 63% to 66% and REVPAR also increased from Rs.3281 to Rs.3573.


Depreciation for the year was lower at Rs.16.75 crores as compared to Rs.17.27 crores for the previous year.

Finance costs for the year ended 31st March, 2019 was Rs.21.58 crores, which is lower by Rs.3.39 crores than previous year, on account of repayment of term loans, reduction in interest costs of the term loan and better working capital management.


The company does not propose to transfer any amount to reserves.


The Board of Directors are pleased to declare a dividend of Rs.0.60 (Rupees Sixty Paisa) per equity share of Rs.2/- each (i.e. 30%) for the Financial Year 2018-19. The total dividend distribution for the financial year amounts to Rs.376 lakhs plus Dividend Distribution Tax of Rs.66 lakhs. The total dividend payout shall be 18% of Profit After Tax (PAT) for the year.

The Dividend subject to approval of the Members at the Annual General Meeting on 25th July, 2019 will be paid on or after 29th July, 2019 to the Members whose names appear in the Register of Members as on the date of Book closure i.e., 18th July, 2019 to 25th July, 2019 (both days inclusive).


The performance of Green Woods Palaces and Resorts Private Limited, the JV Company for the financial year ended 31st March, 2019 is as below :

(Rs. In Crores)

Particulars 2018-19 2017-18
Total Revenue 137.81 122.73
Operating expenses 80.97 74.30
Depreciation 25.17 25.66
Finance cost 23.67 25.92
Profit / (Loss) Before Tax 8.00 (3.15)
Tax expense:
Current tax - -
Deferred tax 2.12 (1.89)
Short provision of tax of earlier years - -
Profit / (Loss) After Tax 5.88 (1.26)
Earnings per share (Rs.) 0.78 (0.17)


As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company which includes Green Woods Palaces and Resorts Private Limited (the JV Company) is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rule, 2015 (as amended). The Company consolidated the proportional Profit after tax /(Loss after Tax) in Ind AS 110 read with Ind AS 28.


The total long term borrowings of the company stood at Rs197.88 crores for the year ended 31st March, 2019 as compared to Rs.228.60 crores as at 31st March, 2018. During the financial year under review, the company repaid Rs30.72 crores.


The Company has been allotted around 7.5 acres land in Yellahanka, Bengaluru for the hotel project. The construction of 2 bridge(s) across the land abutting Company land to connect to the National Highway is completed. During the year under review, the Company has completed the construction of compound wall to secure the site and also completed the rejuvenation of lake in front of the site as per the terms of MOU signed with Bengaluru Development Authority (BDA). Recently Honble Supreme Court has set aside the Honble National Green Tribunal (NGT) order banning construction activity within 75 meters from the lake bed. On account of this favorable Judgement, the company is now planning to build around 250 rooms luxury hotel. The hotel building plans are under evaluation and the company is planning to submit the drawings shortly to government authorities.



The Company has taken up the phased refurbishments works of Guest Rooms and during the financialyear under review, the company completed the renovation/ refurbishment of 3 floors and also completed the renovation of Restaurants. The company is taking up renovation of 2 more floors during the financial year 2019-20.


The Company has taken up the phased refurbishments of Guest Rooms in TAJ Deccan and the mock-up construction in TAJ Deccan Rooms is underway and after receipt of mock-up approval, the renovation of 72 rooms will be taken up during Financial year 2019-20.


Five meetings of the Board of Directors were held during the year. Dates of the meetings are given in the Report on Corporate Governance.



In accordance with the provisions of Companies Act, 2013 read with the Articles of Association of the Company, Dr.GVK Reddy and Mr. Krishna R Bhupal, Promoter Directors, retire by rotation and being eligible offered themselves for re-appointment.

Resignation/Cessation of office of Director

During the year Mrs. Santha Kunnenkeril John (DIN:00848172), has vacated the office of Director in the Company with effect from 01.02.2019 pursuant to provisions of section 167(1) of the Companies Act, 2013. The Board of Directors took the same on record. The Board of Directors placed on record its appreciation for the services rendered by her during the tenure as Director of company. Mr. C D Arha (DIN:02226619) Non-Executive Independent Director of the Company completed his term of 5 years as Independent Director on 31.03.2019 and the Board of Directors placed on record its appreciation for the services rendered during his tenure as Director of the company.

Mr. A Rajasekhar (DIN:01235041), Non-Executive Independent Director of the Company completed his term of 5 years on 31.03.2019. The company proposes to re-appoint him for another term of 5 years and based on the recommendation of the Nomination and Remuneration Committee and Board of Directors appointed and recommends, the re-appointment of Mr. A Rajasekhar as Independent Director of the company by passing a special resolution.


In order to comply with the SEBI (Listing Obligations and Disclosure Requirements) Regulations on Board composition of Promoter Directors and Independent Directors, the Board appointed Mr. A. Rajasekhar, Mr. N Sandeep Reddy and Mr. N Anil Kumar Reddy were appointed as an Additional Directors (Independent Directors) of the Company w.e.f. 15.05.2019 at their meeting held on 15.05.2019 under Section 161 of the Companies Act, 2013. The appointment is subject to the approval of the shareholders at the ensuing Annual General Meeting.

The Company also received i) consent in writing to act as a Directors in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014; ii) intimation in Form DIR-8 pursuant to terms of the Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that they are not disqualified as per Section 164(2) of the Companies Act, 2013; and iii) a declaration to the effect that he meets the criteria of independence as provided under Section 149 of the Companies Act, 2013.

Mr. A.Rajasekhar, Mr. N Sandeep Reddy and Mr. N Anil Kumar Reddy, Independent Directors shall hold office for a term of 5 years i.e. 15.05.2019 to 14.05.2024.

Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2019 are: Mrs. G Indira Krishna Reddy, Managing Director and Mr. J Srinivasa Murthy, CFO & Company Secretary of the Company.


Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board has carried out an Annual Evlauation of its own performance, Board Committees and Individual Directors. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. Performance evaluation of independent directors was done by the entire Board, excluding the Independent Director being evaluated.

In a separate meeting of independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company and Whole time Directors was evaluated. The Chairman of the Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria approved by the Board. Each Committee and the Board expressed satisfaction on the performance of each Director.


The Company has received declarations from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 (the Act) and the Listing Regulations.


A separate meeting of Independent Directors as required under the Schedule IV of the Companies Act, 2013 was held on 15th March, 2019, without presence of Executive Directors. Such meeting was conducted to review and evaluate a) the performance of Non-Independent Directors and the Board as a whole, (b) the performance of the Chairperson of the company, taking into account the views of Executive Directors and Non-Executive Directors and (c) assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with the performance of Non-Independent Directors and the Board as a whole and the Chairman of the Independent Directors meeting briefed the outcome of the meeting to the Chairman of the Board.

The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.


Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014, your Directors have appointed M/s. Narender & Associates, Practicing Company Secretaries, (Certificate of Practice No.5024), Hyderabad to undertake the Secretarial Audit of your Company for the financial year 2018-19.

The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks. The Report in Form MR-3 is enclosed as Annexure-1.


Details pertaining to composition of the Audit Committee are included in the Report on Corporate Governance. All the recommendations made by the Audit Committee were accepted by the Board.

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.


M/s.M. Bhaskara Rao & Co., Chartered Accountants (Firm Registration No.000459S) were appointed as Statutory Auditors of your

Company to hold office from the conclusion of the 22nd AGM held in the year 2017, until the conclusion of the 27th AGM to be held in the year 2022. Accordingly, M/s.M. Bhaskara Rao & Co, Chartered Accountants, Statutory Auditors of the Company will continue till the conclusion of Annual General Meeting to be held in 2022. In this regard, the Company has received a Certificate from the Auditors to the effect that their continuation as Statutory Auditors, would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Auditors Report

The Statutory Auditors have issued unmodified opinion in their Consolidated and Standalone Auditors Report for the financial year ended 31st March, 2019 and there are no qualifications, reservations or adverse remarks in the Auditors Report.


The Board of Directors of the Company have appointed M/s. Price Waterhouse & Co., as Internal Auditors to conduct Internal Audit of the Company for the Financial Year 2018-19 and the Internal Auditors have presented the observations to the Audit Committee at their meeting held on 15.05.2019.


During the year under review, your company has neither invited nor accepted any deposits from the public.


All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.


There is no change in the nature of business of the Company.


There were no instances of non-compliance by the company and no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.


There are no material changes and commitments in the business operations of the company for the financial year ended 31st March, 2019 to the date of signing of the Directors Report.


Disclosure of information under Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in the Directors Report is annexed to this Report.


There are no employees drawing remuneration of more than Rs.102 lakhs or drawing remuneration of Rs.8.50 lakhs per month if employed part of the year as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.


Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitised and embedded in the business processes. Assurance on the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous experts as well as testing of the internal financialcontrol systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

The statutory auditors of the company have tested the financial controls and they have not found any adverse/ non-compliance of the control mechanisms.


The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Act (to the extent notified) and guidelines issued by SEBI. Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms: a. In the preparation of the annual accounts, the applicable accounting standards (Ind AS) had been followed and that no material departures have been made from the same. b. 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 affairsoftheCompanyattheendofthefinancialyear i.e. 31st March, 2019 and of the profit of the Company for that period. c. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. that the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2019 on a going concern basis. e. They have laid down internal financial controls for the company and such internal financial controls are adequate and were operating efficiently, and f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Details pertaining to composition of the Audit Committee are included in the Report on Corporate Governance.

Brief description of terms of reference:

Identifying persons who are qualified to become directors and

• Identifying persons who may be appointed as Key Managerial Personnel, senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

• Carry on the evaluation of every directors performance;

Formulation of the criteria for determining qualifications, positive attributes and independence of a director;

• Recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

• Formulation of criteria for evaluation of Independent Directors and the Board;

• Devising a policy on Board diversity; and

• Any other matter as the Board may decide from time to time.

• The Brief Policy for Selection of Directors and determining Directors independence is annexed to this report.


The objectives of the Policy

1) To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2) To determine remuneration based on the Companys size and financial position and trends and practices on remuneration prevailing in peer companies.

3) To carry out evaluation of the performance of Directors.

4) To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Companys operations.

5) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The brief policy of Nomination and Remuneration is available on the Companys website at www.tajgvk.in under corporate policies.


Your Company is committed to maintain the highest standards of Corporate Governance. As required under Regulations 34 of the

Listing Regulations, the report on Management Discussion and Analysis, Corporate Governance as well as the Auditors certificate on the compliance of Corporate Governance are annexed and form part of the Annual Report.


Pursuant to Regulations 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the Listing Agreement entered with the Stock Exchanges, the Company has constituted a Risk Management Committee (RMC). The details of the Committee and its terms of reference are set out in the Corporate Governance Report. The RMC is entrusted with the responsibility to frame, implement and monitor the Risk Management Plan and also ensure its effectiveness. The Audit Committee has a oversight in the areas of financial risks and controls.


The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Auditor is well defined in the company. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant and corrective actions suggested are presented to the Audit Committee of the Board.


As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015 (as amended. A separate statement containing the salient features of the financial statements of the Joint Venture in Form AOC-1 is enclosed asAnnexure-2 to this Report.


As required by Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return for the Financial Year 2019 is enclosed as Annexure-3 in the prescribed Form MGT-9, which is a part of this report. The same is available on the Companys website at www.tajgvk.in/invester relations/annual report.


The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to monitor implementation of CSR activities of your Company. The detailed report on CSR as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 on the composition of the CSR Committee, CSR policy, CSR initiatives and activities during the year are enclosed as Annexure - 4 to this Report.


The company has not given any Loans / Guarantees and not made any Investments during the FY 2018-19, as required under the provisions of section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the disclosure in the prescribed format is annexed as Annexure-5.


Your Companys Vigil Mechanism provides a formal mechanism to the Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The policy provides for adequate safeguards against victimization of Directors and Employees who avail of the mechanism and also have provided them direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the

Audit Committee. The said policy is available on the Companys website at www.tajgvk.in under corporate policies.


Management discussion and analysis of the financial condition and results of operations of the Company for the period under review as required under regulation 34(2) of the Listing Regulations, a Management Discussion and Analysis Report is set out part of this Report.


Economy and markets for the year under review is given in the Management Discussion and Analysis Report.


In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Companys website at www.tajgvk.in under corporate policies. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arms Length and on quarterly basis the transactions done during the quarter are placed before the audit committee for approval / ratification.

All Related Party Transactions are subjected to approval by Audit committee to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Listing Regulations.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arms Length basis. No Material

Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.


The Audit Committee of the Company reviewed the Consolidated and Standalone Financial statements for the year under review at its meeting held on 15th May, 2019 and recommended the same for the approval of the Board of Directors.


Your Company operating in a competitive and dynamic environment places great importance in the overall training and development of its employees, who make the decisive difference in the hotel industry.

Your Company understands the importance of having the right people with right skills, to deliver the strong and exceptional service and also requisite expertise, which is the basis of our relationships with the guests.

To deliver that service and expertise, we are continuously improving our talent pool and are committed to training and educating the future generation.


The employees are encouraged to develop and manage their careers and this is facilitated by providing relevant Job training and where appropriate, the Company encourages to fill vacancies with existing staff, when the employees are suitably qualified and experienced.

The Company is committed to improve employee engagement and learning more about the needs of our employees. In addition to our training and development programme, the Company also communicate frequently with the employees and value highly the commitment of the employees and recognize the important role, the communication has in festering the good working relationships.

The Company also ensure that employees are informed on matters relating to their employment and on financial and economic factors affecting the companys business. At this same time we also seek feedback and Ideas from employees to improve our operations. The total strength of employees of your Company for the year under review was about 520 permanent employees which includes Unit staff and Deputed staff and 1215 employees on FTC and outsourced.


Your Companys Hotel properties at Hyderabad, Chandigarh & Chennai are certified by Food Safety and Standards Authority of India (FSSAI) for the desired norms in F&Boperations certifiedand assessed as meeting Gold alsoTAJKrishna,Hyderabad Certification requirements of the Earth Check Standards during the year under review.

DuringtheyearTajKrishnareceived"ExcellentEnergyEfficientUnit" award at 19th National Award for Excellence in Energy Management

2018 from Confederation of Indian Industry (CII)


The Equity Shares of your Company are listed on Bombay Stock Exchange Limited (Scrip Code: 532390) and National Stock Exchange of India Limited (Scrip Code: TAJGVK). It may be noted that there are no payments outstanding to the Stock Exchanges by way of

Listing Fees. The company has paid the listing fee for the financial year 2019-20.


The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Committee has been set up to redress complaints received regarding sexual harassment. The Company has designated the external independent member as a Chairperson of the Committee. The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19

Number of complaints received : 2 (Two)
Number of complaints disposed off : 2 (Two)

Compliance with Secretarial Standards

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.


The Company continued to focus on energy conservation measures during the year. Measures include replacement of incandescent lights with low power consumption LED lights, compact fluorescent and IR lights, installation of solar films to reduce heat loads.

Besides these, operational measures were continued to reduce energy consumption by regulating chiller set points according to ambient temperatures, minimizing steam consumption by optimizing steam utilization in kitchens and laundries.

Some of the actions planned for next year include replacement of energy intensive pumps with high efficiency pumping systems, replacement of energy intensive fans with energy efficient fans and the increased use of Secondary Treatment Plant water for cooling towers. Operational measures include close monitoring and control of energy consumption and frequent energy audits by the hotel Engineering Department.

Your Company remains focused on giving importance towards conservation of energy, which results in savings in consumption of electricity, a significant component of the energy cost, in an ongoing process.


The Company continues to absorb and upgrade modern technologies and advanced hotel management techniques in various guest contact areas, which includes wireless internet connectivity in all the hotels.


As required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is given hereunder.

(Rs. In lakhs)

Particulars March 31, 2019 March 31, 2018
Earned 4786.00 4522.00
Used 382.34 346.34


Your Directors would like to express their grateful appreciation for the assistance and cooperation received from customers, bankers, suppliers, shareholders, Central and State Governments, other statutory authorities and others associated with the Company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by employees at all levels, during the year under review.

By Order of the Board of Directors
For TAJGVK Hotels & Resorts Limited
Place : Hyderabad Dr. GVK Reddy
Date : 15.05.2019 Chairman