Placement Document
Not For Circulation
Serial Number: [●]
COX & KINGS LIMITED
(Incorporated in the Republic of India as a company with limited liability under the Indian Companies Act, VII of 1913 with CIN L63040MH1939PLC011352)
Cox & Kings Limited (the Company or the Issuer) is issuing up to 32,787,000 Equity Shares of face value ` 5 each (the Securities) at a price of ` 305 per Security,
including a premium of ` 300 per Security, aggregating to ` 10,000.04 million (the Issue).
THIS ISSUE IS IN RELIANCE UPON CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE SEBI REGULATIONS) AND SECTION 42 OF THE COMPANIES ACT AND
THE RULES MADE THEREUNDER.
THIS ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING MADE ON A PRIVATE PLACEMENT BASIS TO QUALIFIED
INSTITUTIONAL BUYER(S) (QIBs) IN RELIANCE UPON CHAPTER VIII OF THE SEBI REGULATIONS AND SECTION 42 OF THE COMPANIES ACT.
THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR INVITATION
OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA.
Invitations, offers and sales of Securities in this Issue shall only be made pursuant to the Preliminary Placement Document, the Confirmation of Allocation Note and the
Application Form. The distribution of this Placement Document or the disclosure of its contents without the Company's prior consent to any person, other than QIBs and
persons retained by QIBs to advise them with respect to their purchase of the Securities is unauthorised and prohibited. Each prospective investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Placement Document or any documents referred to in this Placement
Document.
This Placement Document has not been reviewed by the Securities and Exchange Board of India (the SEBI), the Reserve Bank of India (the RBI), the BSE Limited
(the BSE), the National Stock Exchange of India Limited (the NSE, together with the BSE, the Stock Exchanges) or any other regulatory or listing authority. This
Placement Document has not been and will not be registered as a prospectus with the Registrar of Companies in India, and will not be circulated or distributed to
the public in India or any other jurisdiction and will not constitute a public offer in India or any other jurisdiction. The issue of Securities proposed to be made
pursuant to this Placement Document is meant solely for QIBs on a private placement basis and is not an offer to the public or to any other class of investors.
Investments in the Securities involve a degree of risk and prospective investors should not invest any funds in this Issue unless they are prepared to take the risk of
losing all or part of their investment. Prospective investors are advised to carefully read the section titled "Risk Factors" of this Placement Document before
making an investment decision. Each prospective investor is advised to consult its advisors about the particular consequences to it of an investment in the
Securities being issued pursuant to this Placement Document.
All of our Company's outstanding Equity Shares are listed on each of the Stock Exchanges. Our Company’s GDRs are listed on the Luxembourg Stock Exchange. The
closing price of the outstanding Equity Shares of the Company on the BSE and the NSE on November 24, 2014 was ` 307.60 and ` 307.55 per Equity Share, respectively.
In-principle approvals under Clause 24(a) of the Listing Agreements with the Stock Exchanges for listing of the Securities have been received from the BSE and the NSE on
November 20, 2014. Applications shall be made for listing of the Securities offered through this Placement Document on each of the Stock Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares for trading on Stock
Exchanges should not be taken as indication of the merits of our Company or the Securities.
YOU MAY NOT AND ARE NOT AUTHORISED TO (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE
THIS PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR
IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN VIOLATION OF THE SEBI REGULATIONS OR
OTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS.
A copy of the Preliminary Placement Document has been delivered to the Stock Exchanges. A copy of the Placement Document has been delivered to the Stock Exchanges. A copy of the Placement Document has also been delivered to the SEBI for record purposes. Our Company shall also make the requisite filings with the Registrar of
Companies within the stipulated period as required under the Companies Act.
THIS PLACEMENT DOCUMENT HAS BEEN PREPARED BY OUR COMPANY SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH
THE PROPOSED ISSUE OF THE SECURITIES DESCRIBED IN THIS PLACEMENT DOCUMENT.
The information on the website of our Company or any website directly or indirectly linked to the website of our Company does not form part of this Placement Document and prospective investors should not rely on such information contained in, or available through, any such website.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and they may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable
state securities laws. Accordingly, the Equity Shares are being offered and sold (a) in the United States only to persons reasonably believed to be qualified institutional
buyers (as defined in Rule 144A under the U.S. Securities Act) pursuant to Section 4(a)(2) under the U.S. Securities Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act (“Regulation S”) or pursuant to another exemption from, or in transactions not subject to, the
registration requirements of the U.S. Securities Act. For a description of these and certain further restrictions on offers, sales and transfers of the Equity Shares and
distribution of this Placement Document, see “Selling Restrictions”, “Notice to Investors”, and “Transfer Restrictions”.
This Placement Document is dated November 25, 2014
GLOBAL COORDINATOR AND BOOK RUNNING LEAD MANAGER
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TABLE OF CONTENTS
NOTICE TO INVESTORS .................................................................................................................................... 3
REPRESENTATIONS BY INVESTORS .............................................................................................................. 5
OFFSHORE DERIVATIVE INSTRUMENTS .................................................................................................... 10
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES ............................................................................... 11
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKETDATA,
CURRENCY OF PRESENTATION AND EXCHANGE RATES ...................................................................... 12
FORWARD LOOKING STATEMENTS ............................................................................................................ 15
ENFORCEMENT OF CIVIL LIABILITIES ....................................................................................................... 17
CERTAIN DEFINITIONS AND ABBREVIATIONS......................................................................................... 18
DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES ACT
2013 ...................................................................................................................................................................... 24
SUMMARY OF THE ISSUE ............................................................................................................................... 27
SUMMARY OF THE BUSINESS ....................................................................................................................... 30
SUMMARY OF FINANCIAL INFORMATION ................................................................................................ 34
RISK FACTORS .................................................................................................................................................. 37
USE OF PROCEEDS ........................................................................................................................................... 56
CAPITALISATION AND INDEBTEDNESS ..................................................................................................... 57
CAPITAL STRUCTURE ..................................................................................................................................... 58
MARKET PRICE INFORMATION .................................................................................................................... 61
DIVIDEND POLICY ........................................................................................................................................... 64
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ..................................................................................................................................................... 65
INDUSTRY OVERVIEW .................................................................................................................................... 79
OUR BUSINESS .................................................................................................................................................. 90
SUBSIDIARIES AND BRANCHES ................................................................................................................. 101
REGULATIONS AND POLICIES .................................................................................................................... 105
BOARD OF DIRECTORS AND SENIOR MANAGEMENT .......................................................................... 112
PRINCIPAL SHAREHOLDERS ....................................................................................................................... 119
ISSUE PROCEDURE ........................................................................................................................................ 124
PLACEMENT AND LOCK UP ......................................................................................................................... 134
TRANSFER RESTRICTIONS ............................................................................................................................. 136
SELLING RESTRICTIONS ............................................................................................................................... 139
INDIAN SECURITIES MARKET ..................................................................................................................... 145
DESCRIPTION OF SECURITIES ..................................................................................................................... 148
TAXATION ....................................................................................................................................................... 154
OUTSTANDING LITIGATION ........................................................................................................................ 167
INDEPENDENT AUDITORS ........................................................................................................................... 171
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GENERAL STATEMENTS ............................................................................................................................... 172
FINANCIAL STATEMENTS ............................................................................................................................ 173
DECLARATION ................................................................................................................................................ 174
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NOTICE TO INVESTORS
We have furnished and accept full responsibility for all of the information contained in this Placement
Document and confirm that, to our best knowledge and belief, having made all reasonable enquiries, this
Placement Document contains all information with respect to us and the Securities which is material in the
context of this Issue. The statements contained in this Placement Document relating to us and the Securities are,
in every material respect true and accurate and not misleading, the opinions and intentions expressed in this
Placement Document with regard to us and the Securities are honestly held, have been reached after considering
all relevant circumstances, are based on information presently available to us and are based on reasonable
assumptions. There are no other facts in relation to our Company, our Subsidiaries or the Securities, the
omission of which would, in the context of the Issue, make any statement in this Placement Document
misleading in any material respect. Further, all reasonable enquiries have been made by us to ascertain such
facts and to verify the accuracy of all such information and statements.
The Book Running Lead Manager has not separately verified all the information contained in this Placement
Document (financial, legal or otherwise). Accordingly, neither the Book Running Lead Manager nor any of its
respective members, employees, counsel, officers, directors, representatives, agents or affiliates make any
express or implied representation, warranty or undertaking, and no responsibility or liability is accepted, by the
Book Running Lead Manager, as to the accuracy or completeness of the information contained in this Placement
Document or any other information supplied in connection with the Issue.
Each person receiving this Placement Document acknowledges that such person has not relied on the Book
Running Lead Manager or on any person affiliated with the Book Running Lead Manager in connection with its
investigation of the accuracy of such information or its investment decision, and each such person must rely on
its own examination of our Company and our Subsidiaries and the merits and risks involved in investing in the
Securities issued pursuant to the Issue.
No person is authorized to give any information or to make any representation not contained in this Placement
Document and any information or representation not so contained must not be relied upon as having been
authorized by or on behalf of us or the Book Running Lead Manager. The delivery of this Placement Document
at any time does not imply that the information contained in it is correct as of any time subsequent to its date.
The Securities have not been approved, disapproved or recommended by any regulatory authority in any
jurisdiction. No authority has passed on or endorsed the merits of this Issue or the accuracy or adequacy
of this Placement Document.
The distribution of this Placement Document and the issue of the Securities may be restricted in certain
jurisdictions by law. As such, this Placement Document does not constitute, and may not be used for or in
connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not
authorized or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has
been taken by us and the Book Running Lead Manager which would permit an offering of the Securities or
distribution of this Placement Document in any jurisdiction, other than India, where action for that purpose is
required. Accordingly, the Securities may not be offered or sold, directly or indirectly, and neither this
Placement Document nor any offering material in connection with the Securities may be distributed or published
in or from any country or jurisdiction, except under circumstances that will result in compliance with any
applicable rules and regulations of any such country or jurisdiction.
In making an investment decision, investors must rely on their own examination of us and our Subsidiaries and
the terms of this Issue, including the merits and risks involved. Investors should not construe the contents of this
Placement Document as legal, tax, accounting or investment advice. Investors should consult their own counsel
and advisors as to business, legal, tax, accounting and related matters concerning this Issue. In addition, neither
us nor the Book Running Lead Manager are making any representation to any offeree or purchaser of the
Securities regarding the legality of an investment in the Securities by such offeree or purchaser under applicable
legal, investment or similar laws or regulations. Each purchaser of the Securities in this Issue is deemed to have
acknowledged, represented and agreed that it is eligible to invest in India and in our Company under Indian law,
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including Chapter VIII of the SEBI Regulations and Section 42 of the Companies Act and that it is not
prohibited by the SEBI or any other statutory authority from buying, selling or dealing in securities. Each
purchaser of Securities in this Issue also acknowledges that it has been afforded an opportunity to request from,
and review information relating to, us and the Securities.
Any information on the Company’s website or the website of the Book Running Lead Manager does not
constitute or form part of this Placement Document.
This Placement Document contains summaries of certain terms of certain documents, which summaries are
qualified in their entirety by the terms and conditions of such document.
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REPRESENTATIONS BY INVESTORS
All references to "you" in this section are to the prospective investors in the Issue. By subscribing to any
Securities under the Issue, you are deemed to have represented, warranted, acknowledged and agreed to us and
the Book Running Lead Manager as follows:
you are a QIB as defined in Regulation 2(1)(zd) of the SEBI Regulations, and undertake to acquire, hold,
manage or dispose of any Securities that are allocated to you in accordance with Chapter VIII of the SEBI
Regulations and undertake to comply with the SEBI Regulations, Companies Act and all other applicable
laws, including any reporting obligations;
if allotted Securities pursuant to the Issue, you shall, for a period of one year from the date of Allotment,
sell the Securities so acquired only on the floor of the Stock Exchanges;
if you are a resident in any jurisdiction other than India, you are permitted by all applicable laws to acquire
Securities in such country;
you are aware that the Securities have not been, and will not be, registered under the SEBI regulations or
under any other law in force in India;
you are aware that the Preliminary Placement Document and this Placement Document has not been
verified or affirmed by SEBI or the Stock Exchanges and that the Preliminary Placement Document and the
Placement Document has been filed with the Stock Exchanges for record purposes only and has been
displayed on our websites and the websites of each of the Stock Exchanges;
you are aware that this Placement Document has not been and will not be registered as a prospectus with
the Registrar of Companies under the Companies Act, the SEBI Regulations or under any other law in force
in India, and no Securities will be offered in India or overseas to the public or any members of the public in
India or any other class of investors other than QIBs;
you are entitled to subscribe to the Securities under the laws of all relevant jurisdictions which apply to you
and you have fully observed such laws and obtained all such governmental and other consents in each case
which may be required thereunder and complied with all necessary formalities;
you are entitled to acquire the Securities under the laws of all relevant jurisdictions and you have all
necessary capacity and have obtained all necessary consents and authorities to enable you to commit to this
participation in the Issue and to perform your obligations in relation thereto (including, without limitation,
in the case of any person on whose behalf you are acting, all necessary consents and authorities to agree to
the terms set out or referred to in this Placement Document) and will honour such obligations;
you confirm that, either: (i) you have not participated in or attended any investor meetings with or
presentations by us or our agents (“Company Presentations”) with regard to us or the Issue; or (ii) if you
have participated in or attended any Company Presentations: (a) you understand and acknowledge that the
Book Running Lead Manager may not have knowledge of the statements that we or our agents may have
made at such Company Presentations and are, therefore, unable to determine whether such statements made
at such Company Presentations may have included any material misstatements or omissions, and,
accordingly, you acknowledge that the Book Running Lead Manager has advised you not to rely in any way
on statements made at such Company Presentations, and (b) confirm that you have not been provided any
material information that was not publicly available;
neither we nor the Book Running Lead Manager are making any recommendation to you, nor advising you
regarding the suitability of any transactions it may enter into in connection with the Issue; your participation
in the Issue is on the basis that you are not and will not be a client of the Book Running Lead Manager and
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the Book Running Lead Manager has no duties or responsibilities to you for providing the protection
afforded to their clients or customers or for providing advice in relation to the Issue and are in no way
acting in a fiduciary capacity;
you are aware and understand that the Securities are being offered only to QIBs and are not being offered to
the general public and the allocation and allotment of the Securities shall be at the discretion of our
Company and the Book Running Lead Manager;
you are aware that if you are allotted more than 5% of the Securities being offered in the Issue, the
Company shall be required to disclose your name and number of Equity Shares allocated to you to the
Stock Exchanges and the Stock Exchanges will make the same available on their websites, and you consent
to such disclosures;
you have made, or have been deemed to have made, as applicable, the representations set forth in the
section titled "Transfer Restrictions";
you have been provided a serially numbered copy of this Placement Document and have read this
Placement Document in its entirety including in particular, the section “Risk Factors” on page 38;
in making your investment decision (i) you have relied on your own examination of us and the terms of the
Issue, including the merits and risks involved, (ii) you have made your own assessment of us, the Securities
and the terms of the Issue based on such information as is publicly available, (iii) you have consulted your
own independent advisors (including tax advisors) or otherwise have satisfied yourself concerning, without
limitation, the effects of local laws and taxation matters, (iv) you have relied solely on the information
contained in the Placement Document and no other disclosure or representation by us or any other party and
(v) you have received all information that you believe is necessary or appropriate in order to make an
investment decision in respect of us and the Securities;
you have such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of the investment in the Securities and you and any accounts for which you are
subscribing to the Securities (i) are each able to bear the economic risk of the investment in the Securities,
(ii) will not look to us and/or the Book Running Lead Manager for all or part of any such loss or losses that
may be suffered, (iii) are able to sustain a complete loss on the investment in the Securities, (iv) have no
need for liquidity with respect to the investment in the Securities, and (v) have no reason to anticipate any
change in your or their circumstances, financial or otherwise, which may cause or require any sale or
distribution by you or them of all or any part of the Securities;
where you are acquiring the Securities for one or more managed accounts, you represent and warrant that
you are authorised in writing, by each such managed account to acquire the Securities for each managed
account and to make (and you hereby make) the representations, acknowledgements and agreements herein
for and on behalf of each such account, reading the reference to "you" to include such accounts;
you are not our promoter or the promoter of any of any of our Associates and are not a person related to
our Promoter, either directly or indirectly and your Bid does not directly or indirectly represent our
Promoters or Promoter Group;
the Book Running Lead Manager or our Company has not provided you with any tax advice or otherwise
made any representations regarding the tax consequences of purchase, ownership and disposal of the Equity
Shares (including but not limited to the Issue and the use of the proceeds received from the issue of the
Securities). You will obtain your own independent tax advice and will not rely on the Book Running Lead
Manager or our Company when evaluating the tax consequences in relation to the Equity Shares (including
but not limited to the Issue and the use of the proceeds received from the issue of the Securities). You waive
and agree not to assert any claim against the Book Running Lead Manager or our Company with respect to
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the tax aspects of the Equity shares or the Issue or as a result of any tax audits by tax authorities, wherever
situated;
you have no rights under a shareholders' agreement or voting agreement with the Promoters or persons
related to the Promoters, no veto rights or right to appoint any nominee Director on the Board other than
such rights acquired in the capacity of a lender not holding any of our securities, which shall not be deemed
to be a person related to the Promoter;
you will have no right to withdraw your Bid after the Bid Closing Date;
you are eligible to Bid and hold Securities so allotted together with any of our Securities held by you prior
to the Issue. You further confirm that your aggregate shareholding in our Company upon the issue of the
Securities shall not exceed the level permissible as per any applicable regulation;
the Bids submitted by you would not eventually result in triggering a tender offer under the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended
(the “Takeover Code”);
to the best of your knowledge and belief, together with other QIBs in the Issue that belong to the same
group or are under common control as you, the allotment under the present Issue shall not exceed 50% of
the Issue. For the purposes of this representation;
a. the expression ‘belongs to the same group’ shall derive meaning from the concept of ‘companies under
the same group’ as provided in sub-section (11) of Section 372 of the Companies Act, 1956, as
amended, and;
b. ‘control’ shall have the same meaning as is assigned to it by clause (1)(e) of Regulation 2 of the
Takeover Code;
you shall not undertake any trade in the Securities credited to your depository participant account until such
time that the final listing and trading approval for the Securities is issued by the Stock Exchanges;
you are aware that (i) applications have been made to each of the Stock Exchanges for in-principle approval
for listing and admission of the Securities for trading on the Stock Exchanges and (ii) the application for the
final listing and trading approval will be made only after the Allotment of the Securities in the Issue and
there can be no assurance that such final approval will be obtained on time or at all;
you are aware and understand that the Book Running Lead Manager will enter into a placement agreement
with our Company whereby the Book Running Lead Manager will, subject to the satisfaction of certain
conditions set out therein, undertake to procure purchasers for the Securities on the terms and conditions set
forth therein;
the contents of this Placement Document are exclusively our responsibility and that neither the Book
Running Lead Manager nor any person acting on its behalf has, or shall have, any liability for any
information, representation or statement contained in this Placement Document or any information
previously published by or on behalf of us and will not be liable for your decision to participate in the Issue
based on any information, representation or statement contained in this Placement Document or otherwise.
By accepting a participation in this Issue, you agree and confirm that you have neither received nor relied
on any other information, representation, warranty or statement made by or on behalf of the Book Running
Lead Manager or us or any other person and neither the Book Running Lead Manager, us or any other
person will be liable for your decision to participate in the Issue based on any other information,
representation, warranty or statement that you may have obtained or received;
8
you are eligible to invest in India under applicable laws, including the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended, and have
not been prohibited by the SEBI or any regulatory or any Governmental authority from buying, selling or
dealing in securities;
the only information you are entitled to rely on, and on which you have relied in committing yourself to
acquire the Securities, is contained in this Placement Document, such information being all that you deem
necessary to make an investment decision in respect of the Securities and you have neither received nor
relied on any other information given or representations, warranties or statements made by either the Book
Running Lead Manager or us (including any views, statement, opinion or representation expressed in any
research published or distributed by Book Running Lead Manager or its affiliates or any view, statement,
opinion expressed by the staff (including research staff) of the Book Running Lead Manager or its affiliates
or us) and the Book Running Lead Manager will not be liable for your decision to accept an invitation to
participate in the Issue based on any other information, representation, warranty or statement;
you understand that the Book Running Lead Manager has no obligation to purchase or acquire all or any
part of the Securities purchased by you in the Issue or to support any losses directly or indirectly sustained
or incurred by you for any reason whatsoever in connection with the Issue, including non-performance by
us of any of our respective obligations or any breach of any representations or warranties by us, whether to
you or otherwise;
you agree to indemnify and hold us and the Book Running Lead Manager harmless from any and all costs,
claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements and agreements in this section and you agree
that the indemnity set forth in this paragraph shall survive the resale of the Securities by you or on behalf of
your managed accounts;
you are a sophisticated investor who is seeking to purchase the Securities for your own investment and not
with a view to distribution;
each of the representations, acknowledgements and agreements set forth above shall continue to be true and
accurate at all times up to and including the Allotment of the Securities;
you understand that the Securities have not been and will not be registered under the U.S. Securities Act or
with any securities regulatory authority of any state of the United States and accordingly, may not be
offered or sold within the United States, except in reliance on an exemption from the registration
requirements of the U.S. Securities Act;
if you are within the United States, you are a “qualified institutional buyer” as defined in Rule 144A under
the U.S. Securities Act, are acquiring the Securities for your own account or for the account of an
institutional investor who also meets the requirements of a “qualified institutional buyer”, for investment
purposes only, and not with a view to, or for resale in connection with, the distribution (within the meaning
of any United States securities laws) thereof, in whole or in part
you are not acquiring or subscribing for the Securities as a result of any general solicitation or general
advertising (as those terms are defined in Regulation D under the U.S. Securities Act) or directed selling
efforts (as defined in Regulation S) and you understand and agree that offers and sales are being made in
reliance on an exemption to the registration requirements of the U.S. Securities Act provided under
Regulation S and the Securities may not be eligible for resales under Rule 144A thereunder. You
understand and agree that the Securities are transferable only in accordance with the restrictions described
under the section “Transfer Restrictions” on page 136;
9
if you are outside the United States, you are not a U.S. person and are purchasing the Securities in an
offshore transaction (within the meaning of Regulation S), and not an affiliate of our Company or a person
acting on behalf of such an affiliate;
you are an investor who is seeking to purchase the Securities for your own investment and not with a view
to distribution; in particular, you acknowledge that (i) an investment in the Securities involves a high degree
of risk and that the Securities are, therefore, a speculative investment, (ii) you have sufficient knowledge,
sophistication and experience in financial and business matters so as to be capable of evaluating the merits
and risk of the purchase of the Equity Shares, and (iii) you are experienced in investing in private placement
transactions of securities of companies in a similar stage of development and in similar jurisdictions and
have such knowledge and experience in financial, business and investments matters that makes you capable
of evaluating the merits and risks of your investment in the Securities;
you agree that any dispute arising in connection with this Issue will be governed by and construed in
accordance with the laws of the Republic of India and the courts at Mumbai, India shall have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with this Placement Document
and the Placement Document;
we, the Book Running Lead Manager, our respective affiliates and others will rely on the foregoing
representations, warranties, acknowledgements and agreements which are given to the Book Running Lead
Manager for their and our benefit and are irrevocable; and
all statements other than statements of historical fact included in this Placement Document, including
without limitation, those regarding our financial position, business strategy, plans and objectives of
management for future operations (including development plans and objectives relating to our business) are
forward looking statements, which involve known and unknown risks, uncertainties and other factors that
could cause actual results to be materially different from future results, performance or achievements
expressed or implied by such forward looking statements; such forward looking statements are based on
numerous assumptions regarding our present and future business strategies and environment in which we
will operate in future and you should not place undue reliance on forward looking statements which speak
only as of the date of Placement Document; we assume no responsibility to update any of forward looking
statements.
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OFFSHORE DERIVATIVE INSTRUMENTS
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 22 of the FPI Regulations, FPIs (other than Category III foreign portfolio investors and unregulated
broad based funds, which are classified as Category II FPI by virtue of their investment manager being
appropriately regulated) may issue or otherwise deal in offshore derivative instruments (as defined under the FPI
Regulations as any instrument, by whatever name called, which is issued overseas by a FPI against securities
held by it that are listed or proposed to be listed on any recognized stock exchange in India, as its underlying,
and all such offshore derivative instruments are referred to herein as “P-Notes”), for which they may receive
compensation from the purchasers of such instruments. P-Notes may be issued only in favor of those entities
which are regulated by any appropriate foreign regulatory authorities subject to compliance with ‘know your
client’ requirements. An FPI shall also ensure that no further issue or transfer of any instrument referred to
above is made to any person other than such entities regulated by appropriate foreign regulatory authorities. P-
Notes have not been and are not being offered or sold pursuant to this Placement Document. This Placement
Document does not contain any information concerning P-Notes or the issuer(s) of any P-notes, including any
information regarding any risk factors relating thereto.
Any P-Notes that may be issued are not securities of our Company and do not constitute any obligation of,
claims on or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in the
establishment of the terms of any P-Notes, or in the preparation of any disclosure related to any P-Notes. Any P-
Notes that may be offered are issued by, and are the sole obligations of, third parties that are unrelated to our
Company. Our Company and the Book Running Lead Manager do not make any recommendation as to any
investment in P-Notes and do not accept any responsibility whatsoever in connection with any P-Notes. Any P-
Notes that may be issued are not securities of the Book Running Lead Manager and do not constitute any
obligations of or claims on the Book Running Lead Manager. Affiliates of the Book Running Lead Managers
which are eligible FPIs may purchase, to the extent permissible under law, the Securities in the Issue, and may
issue P-Notes in respect thereof. Prospective investors interested in purchasing any P-Notes have the
responsibility to obtain adequate disclosures as to the issuer(s) of such P-Notes and the terms and conditions of
any such P-Notes from the issuer(s) of such P-Notes. Neither SEBI nor any other regulatory authority has
reviewed or approved any P-Notes or any disclosure related thereto. Prospective investors are urged to consult
their own financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes,
including whether P-Notes are issued in compliance with applicable laws and regulations.
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DISCLAIMER CLAUSE OF THE STOCK EXCHANGES
As required, a copy of the Preliminary Placement Document has been submitted to the Stock Exchanges and a
copy of this Placement Document has been filed with the Stock Exchanges. The Stock Exchanges do not in any
manner:
warrant, certify or endorse the correctness or completeness of any of the contents of this Placement
Document;
warrant that our Securities will be listed or will continue to be listed on the Stock Exchanges; or
take any responsibility for our financial or other soundness, our management or any of our schemes or
project of ours.
The filing of this Placement Document should not for any reason be deemed or construed to mean that the
Placement Document has been cleared or approved by the Stock Exchanges. Every person who desires to apply
for or otherwise acquires any Securities does so pursuant to an independent inquiry, investigation and analysis
and shall not have any claim against the Stock Exchanges whatsoever by reason of any loss which may be
suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of
anything stated or omitted to be stated herein or for any other reason whatsoever.
12
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKETDATA,
CURRENCY OF PRESENTATION AND EXCHANGE RATES
Certain Conventions
In this Placement Document, unless the context otherwise indicates or implies, all references to "you", "offeree",
"purchaser", "subscriber", "recipient", "investors" and "potential investors" are to the prospective investors in this
Issue, references to, the "Company", "Our Company", or the "Issuer" are to Cox & Kings Limited on an
unconsolidated basis, references to "we", "us", "our" are to Cox & Kings Limited and all its Subsidiaries where
relevant, on a consolidated basis. References in this Placement Document to "India" are to the Republic of India
and the "Government" or the "Central Government" or the "State Government" are to the Government of India,
central or state, as applicable. All references herein to "U.S." or the "United States" are to the United States of
America and its territories and possessions.
We prepare our financial statements in accordance with Indian GAAP and the Companies Act. Indian GAAP
differs in certain respects from IFRS and U.S. GAAP. We do not provide a reconciliation of our financial
statements to IFRS or U.S. GAAP. Please see section titled "Risk Factors - Significant differences exist between
Indian GAAP and other accounting principles with which investors may be more familiar".
In this Placement Document, certain monetary amounts have been subject to rounding adjustments. Accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.
Unless stated otherwise, the financial data in this Placement Document is derived from our consolidated financial
statements prepared in accordance with Indian GAAP. The fiscal year of Cox & Kings Limited and its
Subsidiary in India commences on April 1 of each year and ends on March 31 of the succeeding year, so all
references to a particular "fiscal year" or "Fiscal" are to the twelve-month period ended on March 31 of that year.
Any discrepancies between the amounts listed and total thereof, in the tables included herein, are due to rounding
off.
Market Data/Industry Data
Unless stated otherwise, industry data and market data used in this Placement Document has been obtained from
industry publications. Industry publications generally state that the information contained in those publications
has been obtained from sources believed to be reliable but that its accuracy and completeness are not guaranteed
and its reliability cannot be assured. Although we believe that the industry data and market data used in this
Placement Document is reliable, it has not been verified by any independent source. Similarly, internal reports
and data of our Company, while believed by us to be reliable, have not been verified by any independent source.
Neither we nor the Book Running Lead Manager has independently verified this data and neither we nor the
Book Running Lead Manager makes any representation regarding the accuracy and completeness of such data.
Similarly, while we believe our internal estimates to be reasonable, such estimates have not been verified by any
independent sources and neither we nor the Book Running Lead Manager can assure potential investors as to the
accuracy of such estimates.
The extent to which the market and industry data used in this Placement Document is meaningful depends on the
reader’s familiarity with and understanding of the methodologies used in compiling such data.
There are no standard data gathering methodologies in the industry in which we conduct our business, and
methodologies and assumptions may vary widely among different industry sources. Neither we have nor the
Book Running Lead Manager has independently verified this data, nor do we make any representation regarding
accuracy of such data.
13
Currency of Presentation
In this Placement Document, all references to "Rupees", "`" or "INR" are to Indian Rupees, the official currency
of India; references to the singular also refers to the plural and one gender also refers to any other gender,
wherever applicable.
All references to US$ or 'U.S. Dollar(s)' are to the United States Dollars, the official currency of the United
States of America. All references to 'GBP' or '£', are to the Great Britain Pounds. All references to 'JPY' are to the
Japanese Yen. All references to 'SD' are to Singapore Dollars. All references to 'AED' are to the Arab Emirates
Dirham.
Exchange Rates
We publish our financial statement in Indian Rupees, the lawful currency of India. Exchange rates are based on
the reference rates released by the RBI. No representation is made that any Rupee amounts could have been, or
could be, converted into U.S. Dollar at any particular rate, the rates stated below or at all. On November 24, 2014
the exchange rate was ` 61.7798 to US$ 1.00.
The U.S. Dollar exchange rate for periods since April 1, 2011 is given below:
(` per US$)
Period end Average(1)
High(2)
Low(3)
Fiscal Year:
2014 60.10 60.50 68.35 53.74
2013 54.39 54.45 57.22 50.56
2012 51.16 47.95 54.24 43.95
Quarter ended:
September 30, 2014 61.61 60.59 60.59 59.72
June 30, 2014 60.09 59.77 61.12 58.43
March 31, 2014 60.10 61.79 62.99 60.10
Month ended:
October 31, 2014 61.41 61.34 61.75 61.04
September 30, 2014 61.61 60.86 61.61 60.26
August 31, 2014 60.47 60.90 61.56 60.43
July 31, 2014 60.25 60.06 60.33 59.72
June 30, 2014 60.09 59.73 60.37 59.06
May 31, 2014 59.03 59.31 60.23 58.43
(1) Average of the official rate for each working day of the relevant period.
(2) Maximum official rate for each working day of the relevant period.
(3) Minimum official rate for each working day of the relevant period.
(Source: www.rbi.org.in)
The GBP exchange rate for the three years is given below:
(` per GBP)
Period end Average(1)
High(2)
Low(3)
Fiscal Year:
2014 99.85 96.23 106.03 82.05
2013 82.32 86.06 89.54 80.84
2012 81.05 76.42 83.77 70.74
Quarter ended:
September 30, 2014 100.28 101.21 103.50 97.25
June 30, 2014 102.33 100.65 102.77 98.28
March 31, 2014 99.85 102.21 104.61 99.39
14
Period end Average(1)
High(2)
Low(3)
Month ended:
October 31, 2014 98.06 98.72 100.07 98.06
September 30, 2014 100.28 99.31 100.49 97.25
August 31, 2014 100.35 101.81 103.50 100.12
July 31, 2014 101.92 102.62 103.18 101.92
June 30, 2014 102.33 100.98 102.77 99.02
May 31, 2014 98.91 99.94 101.97 98.28
(1) Average of the official rate for each working day of the relevant period.
(2) Maximum official rate for each working day of the relevant period.
(3) Minimum official rate for each working day of the relevant period.
(Source: www.rbi.org.in)
15
FORWARD LOOKING STATEMENTS
This Placement Document contains certain forward-looking statements. These forward-looking statements
generally can be identified by words or phrases like 'aim', 'anticipate', 'believe', 'contemplate', 'estimate', 'expect',
'future', 'goal', 'intend', 'objective', 'plan', 'project', 'seek to', 'should', 'will', 'will continue', 'will likely result ', 'will
pursue' and similar expressions or variations of such expressions, that could be 'forward looking statements'.
Similarly, the statements that describe our objectives, strategies, plans or goals are also forward looking
statements.
All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results
to differ materially from those contemplated by the relevant forward-looking statement. Important factors that
could cause actual results to differ materially from our expectations include, but not limited to:
our ability to grow our product portfolio and add new destinations;
our ability to negotiate favorable rates with travel suppliers;
our ability to grow and sustain our educational travel business;
declines or disruptions in the travel industry;
our ability to attract and retain qualified personnel;
market fluctuations and industry dynamics
fluctuations in operating costs and impact on our financial results;
our ability to manage third party risks;
changes in political and social conditions in India or in other countries that we operate in, the monetary
policies and/or fiscal policies of India and other countries, inflation, deflation, unanticipated turbulence in
interest rates, equity prices or other rates or prices;
general economic and business conditions in the markets in which we operate and in the local, regional and
national economies;
the performance of the financial markets in India and globally;
changes in laws and regulations relating to the industries in which we operate;
occurrence of natural disasters or calamities affecting the areas in which we have operations;
changes in technology in future; and
increase in competition and other factors affecting the industry segments in which our Company operates.
For further discussion of factors that could cause our actual results to differ, please see the sections titled “Risk
Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Our
Business". By their nature, certain market risk disclosures are only estimates and could be materially different
from what actually occurs in the future. As a result, actual future gains or losses could be materially different
from those that have been estimated.
16
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. In light of the foregoing, and the risks, uncertainties and
assumptions discussed in the section titled "Risk Factors" and elsewhere in this Placement Document, any
forward-looking statement discussed in this Placement Document may change or may not occur, and our actual
results could differ materially from those anticipated in such forward-looking statements.
17
ENFORCEMENT OF CIVIL LIABILITIES
We are a limited liability company incorporated under the laws of India. A substantial majority of our Directors
and executive officers are residents of India and a substantial portion of our assets and a number of such persons
are located in India. As a result, it may not be possible for investors to effect service of process upon us or such
persons in jurisdictions outside India or to enforce judgments obtained in courts outside India.
India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments.
Recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the
Code of Civil Procedure, 1908 (the Civil Code).
Section 13 of the Civil Code provides that a foreign judgment shall be conclusive regarding any matter thereby
directly adjudicated upon except:
(i) where the judgment has not been pronounced by a court of competent jurisdiction;
(ii) where the judgment has not been given on the merits of the case;
(iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of
international law or a refusal to recognise the law of India in cases in which such law is applicable;
(iv) where the proceedings in which the judgment was obtained were opposed to natural justice;
(v) where the judgment has been obtained by fraud; and
(vi) where the judgment sustains a claim founded on a breach of any law in force in India.
Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court in
any country or territory outside India which the Government has by notification declared to be in a reciprocating
territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the
relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being
in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or
other penalty and is not applicable to arbitral awards. The United States has not been declared to be a
reciprocating territory by the Government of India for the purposes of Section 44A of the Civil Code. However,
the United Kingdom has been declared to be a reciprocating territory by the Government of India. Accordingly, a
judgement of a court of the United States may be enforced only by a fresh suit upon the judgement and not by
proceedings in execution. A judgment of a court in a jurisdiction, which is not a reciprocating territory, may be
enforced only by a fresh proceeding initiated in a court in India.
Under the Civil Code, a court in India shall, upon the production of any document purporting to be a certified
copy of a foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction,
unless the contrary appears on record. The suit for enforcement of a foreign judgement must be brought in India
within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil
liability in India. Generally, there are considerable delays in the processing of legal actions to enforce a civil
liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if
an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if
it is of the view that the amount of damages awarded is excessive or inconsistent with public policy in India. A
party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to execute such
a judgment or to repatriate any amount recovered outside India. Any judgment in a foreign currency would be
converted into Rupees on the date of judgment and not on the date of payment. We cannot predict whether a suit
brought in an Indian court would be disposed off in a timely manner or be subject to considerable delays.
18
CERTAIN DEFINITIONS AND ABBREVIATIONS
We have prepared this Placement Document using the definitions and abbreviations below which you should
consider when reading the information contained herein.
The following is a list of capitalised terms used in this Placement Document and is intended for the convenience
of the reader/prospective investor only and it may not be exhaustive. The terms defined in this section shall have
the meaning set forth in the list below, unless specified otherwise in the context thereof, and references to any
statute, regulations or policies shall include amendments thereto, from time to time.
Company related terms
Term Description
Articles of
Association
Articles of association of Cox & Kings Limited
Associates with respect to any Person, any other Person directly or indirectly Controlling,
Controlled by, or under direct or indirect common Control with, such Person
Auditors M/s Chaturvedi & Shah
Board of Directors or
Board
The board of directors of Cox & Kings Limited or any duly constituted committee
thereof
Company or Issuer Cox & Kings Limited
Directors Directors of the Company
East India Travel East India Travel Company, Inc
Equity Shares Equity shares of the Company of ` 5 each
Ezeego Ezeego One Travels & Tour Limited
Far Pavilions Far Pavilions Tours and Travels Private Limited
Forever Forever Travel Distribution Private Limited
Memorandum of
Association
Memorandum of association of Cox & Kings Limited
Promoter Mr. A.B.M. Good, Mr. Ajay Ajit Peter Kerkar, Ms. Urrshila Kerkar, Ms. Elizabeth
Kerkar, and Liz Investments Private Limited
Promoter Group Promoter group of our Company as per the definition provided in Regulation 2(1)(zb)
of the SEBI Regulations
Registered Office or
Corporate Office
Turner Morrison Building, 1st Floor, 16 Bank Street, Fort, Mumbai —400 001,
Maharashtra, India
Registrar of
Companies
Registrar of Companies, Mumbai, Maharashtra
Shareholder Shareholder of the Company
Subsidiaries Subsidiaries of the Company, as mentioned in the section titled “Subsidiaries and
Branches”.
19
Issue related terms
Term Description
Allocation or
Allocated
The allocation of the Securities, following the determination of the Issue Price, to
QIBs on the basis of the Application Forms submitted by them, in consultation with
the Book Running Lead Manager and in compliance with Chapter VIII of the SEBI
Regulations and Section 42 of the Companies Act.
Allotment/Allotted The issue and allotment of the Securities pursuant to this Issue
Allottees QIBs to whom Securities are issued and allotted pursuant to the Issue
Application Form The form (including any revisions thereof) pursuant to which a QIB shall submit a
Bid for the Securities being offered in the Issue
Bid An indication of QIBs' interest as provided in the Application Form, including all
revisions and modifications thereto, to subscribe to the Securities, in this Issue
Bid Closing Date November 25, 2014, i.e., the date on which the Company (or the Book Running
Lead Manager, on behalf of the Company) shall cease the acceptance of duly
completed Application Forms for the Issue
Bid Opening Date November 20, 2014, i.e., the date on which the Company (or the Book Running
Lead Manager, on behalf of the Company) shall commence acceptance of the duly
completed Application Forms for the Issue
Bidding Period The period between the Bid Opening Date and Bid Closing Date inclusive of both
dates during which prospective QIBs can submit their Bids
Book Running Lead
Manager
Axis Capital Limited
CAN or
Confirmation of
Allocation Note
Note or advice or intimation confirming the Allocation of Equity Shares to QIBs
after discovery of the Issue Price
Closing Date On or about November 27, 2014, being the date on which the Securities are
expected to be Allotted
Control shall have the same meaning as is assigned to it by clause (1)(e) of Regulation 2 of
the Takeover Code
Designated Date The date of credit of the Securities to the QIB’s account, as applicable to the
respective QIBs mentioned in the CAN
Escrow Bank Axis Bank Limited
Escrow Bank
Account
A special account opened by the Issuer with the Escrow Bank in terms of the
arrangement between the Company, the Book Running Lead Manager and the
Escrow Bank collection and appropriation of money in relation to the Issue.
Floor Price The floor price of ` 309.18 which has been calculated in accordance with Chapter
VIII of the SEBI Regulations. In terms of the SEBI Regulations, the Issue Price
cannot be lower than the Floor Price. The committee of the Board of Directors of
the Company, on November 25, 2014, approved a discount of ₹ 4.18 on the Floor
Price in terms of Regulation 85 of the SEBI Regulations.
Global Coordinator Axis Capital Limited
Issue The offer, issue and allotment of 32,787,000 Equity Shares to QIBs, pursuant to
Chapter VIII of the SEBI Regulations
Issue Price ` 305 per Equity Share
Issue Size 32,787,000 Equity Shares aggregating to ` 10,000.04 million
Mutual Fund Portion 10% of the Securities proposed to be Allotted in the Issue, which is available for
Allocation to Mutual Funds
20
Term Description
Pay-in Date The last date specified in the CAN for payment of the Issue Price
Person An individual, natural person, corporation, partnership, joint venture, incorporated
or unincorporated body or association, company, Government or subdivision
thereof
Placement The private placement of Equity Shares in the Issue
Placement
Agreement
The agreement dated November 20, 2014 between the Book Running Lead
Manager and the Company
Placement Document This Placement Document dated November 25, 2014 issued in accordance with
Chapter VIII of the SEBI Regulations and Section 42 of the Companies Act
Preliminary
Placement Document
The Preliminary Placement Document dated November 20, 2014 issued in
accordance with Chapter VIII of the SEBI Regulations and Section 42 of the
Companies Act
Qualified
Institutional Buyer(s)
or QIB(s)
Qualified Institutional Buyer as defined under Regulations 2(1)(zd) of the SEBI
Regulations
Qualified Institutions
Placement or QIP
Qualified Institutions Placement under Chapter VIII of the SEBI Regulations
Securities The Equity Shares of the Company being offered pursuant to this Issue
Shareholders Shareholders of the Company
Conventional and general terms and abbreviations
Term Description
AED Arab Emirates Dirham
AGM Annual general meeting
AS Accounting standards, under Indian GAAP
BOLT BSE online trading
BSE BSE Limited
CAGR Compound annual growth rate
CCI Competition Commission of India
CDSL Central Depository Services Limited
CGU Cash Generating Unit
CIN Corporate Identity Number
Civil Code Code of Civil Procedure, 1908, as amended from time to time
CMD Chairman and managing director
Companies Act Indian Companies Act, 2013 (as may be notified, amended or replaced from time to
time) and any rules prescribed thereunder (as may be applicable) and shall include
the Indian Companies Act, 1956 (to the extent not repealed/replaced by the Indian
Companies Act, 2013)
21
Term Description
Competition Act Competition Act, 2002, as amended from time to time
CRISIL Credit Rating and Information Services of India Limited
Current Net Worth The total assets of the Company reduced by the current liabilities of the Company
Delisting Regulations Securities and Exchange Board of India (Delisting of Equity Shares) Regulations,
2009, as amended from time to time
Depository A depository registered with SEBI under the SEBI (Depositories and Participant)
Regulations, 1996
Depository Act Depositories Act, 1996, as amended, from time to time
DIPP Department of Industrial Policy and Promotion
DP or Depository
Participant
A depository participant as defined under the Depositories Act
EBIT Earnings before interest and taxation
EBIT Margin EBIT expressed as a percentage of total income
EBITDA Earnings before interest taxation depreciation and amortization
EBITDA Margin EBITDA expressed as a percentage of total income
ECB External commercial borrowings
EGM Extra-ordinary general meeting
EPS Earnings per share
ESOPs Employee stock options
FBT Fringe benefit tax
FDI Foreign direct investment
FEMA Foreign Exchange Management Act, 1999, as amended, and the regulations
issued thereunder
FEMA Rules FEMA (Current Account Transaction) Rules, 2000
FII Foreign institutional investor(s) (as defined under the SEBI FPI Regulations)
registered with SEBI
FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI
Regulations, provided that any QFI or FII who holds a valid certificate of
registration shall be deemed to be an FPI until the expiry of the block of three years
for which fees have been paid as per the Securities and Exchange Board of India
(Foreign Institutional Investors) Regulations, 1995
Fiscal or fiscal year Period of twelve months ended March 31 of that particular year, unless otherwise
specified
GBP or £ Great Britain Pounds
GDP Gross domestic product
GDR Global depository receipt
GDS Global distribution systems
22
Term Description
GIR General index registry
Government Government of India, central or state, as applicable
IATA Indian air transport association
ICAI Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards of the International Accounting
Standards Board
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
Insider Trading
Regulations
Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 1992, as amended from time to time
IPO Initial Public Offering
IPP Institutional Placement Programme
IRCTC Indian Railway Catering and Tourism Corporation Limited
IT Information technology
Income Tax Act Income Tax Act, 1960, as amended from time to time
JPY Japanese Yen
Listing Agreements The listing agreements executed between our Company and each of the Stock
Exchanges
MICE Meetings, Incentives, Conferences, Exhibitions
Mutual Fund A mutual fund registered with SEBI under the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996, as amended from time to time
NAV Net asset value
NRI Non-resident Indian
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
P/E Ratio Price to earnings ratio
PAN Permanent account number
Parliament The parliament of India
PAT Profit after tax
PBT Profit before tax
PIO Persons of Indian origin
P-Notes Participatory notes, equity-linked notes and any other similar instruments
RBI Reserve Bank of India
23
Term Description
Regulation S Regulation S of U.S. Securities Act
RoC Registrar of Companies
ROCE Return on capital employed
Rupees, ` ,or INR Indian Rupees
SAT Securities Appellate Tribunal
SCRA Securities Contracts (Regulation) Act 1956, as amended from time to time
SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time
SD Singapore Dollars
SEBI Securities Exchange Board of India
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time
SEBI Debt
Regulations
Securities and Exchange Board of India (Issue and Listing of Debt Securities),
2008.
SEBI Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended from time to time
SENSEX Sensitivity Index
Stock Exchanges BSE and NSE
STT Securities Transaction Tax
Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011, as amended from time to time
U.K. United Kingdom
U.S. GAAP Generally Accepted Accounting Principles in the United States of America
U.S. or United States United State of America and its territories and possessions
UIN Unique Identification Number
UNWTO World Tourism Organisation
U.S. Securities Act U.S. Securities Act of 1933, as amended from time to time
USD, U.S.$, U.S.
Dollars or $
United States Dollar
WDM Wholesale Debt Market
WTTC World Travel & Tourism Council
24
DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES
ACT 2013
This table below sets out the disclosure requirements as provided in PAS-4 and the relevant pages in
this Placement Document where these disclosures, to the extent applicable, have been provided.
S. No. Disclosure Requirements Relevant Page of this Placement
Document
1. GENERAL INFORMATION
a. Name, address, website and other contact details of the company indicating both registered office and corporate office.
176
b. Date of incorporation of the company. 172
c. Business carried on by the company and its subsidiaries with the details of branches or units, if any.
91, 102
d. Brief particulars of the management of the company. 112
e. Names, addresses, DIN and occupations of the directors. 112
f. Management’s perception of risk factors 38
g. Details of default, if any, including therein the amount involved, duration of default and present status, in repayment of:
170
(i) Statutory dues;
(ii) Debentures and interest thereon;
(iii) Deposits and interest thereon; and
(iv) Loan from any bank or financial institution and interest thereon.
h. Names, designation, address and phone number, email ID
of the nodal/ compliance officer of the company, if any, for the private placement offer process.
176
2. PARTICULARS OF THE OFFER
a. Date of passing of board resolution. 125
b. Date of passing of resolution in the general meeting,
authorizing the offer of securities
125
c. Kinds of securities offered (i.e. whether share or debenture) and class of security.
27
d. Price at which the security is being offered including the
premium, if any, along with justification of the price.
27
e. Name and address of the valuer who performed valuation of the security offered.
Not applicable
f. Amount which the company intends to raise by way of
securities
57
g. Terms of raising of securities:
(i) Duration, if applicable; Not applicable
(ii) Rate of dividend; 65
(iii) Rate of interest; Not applicable
25
(iv) Mode of payment; and Not applicable
(v) Mode of repayment. Not applicable
h. Proposed time schedule for which the offer letter is valid 19
i. Purposes and objects of the offer. 57
j. Contribution being made by the promoters or directors either as part of the offer or separately in furtherance of such objects.
Not applicable
k. Principle terms of assets charged as security, if applicable. Not applicable
3. DISCLOSURES WITH REGARD TO INTEREST OF
DIRECTORS, LITIGATION ETC
a. Any financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the
interests of other persons.
115
b. Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any promoter of the offeree company during the last three years immediately preceding
the year of the circulation of the offer letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed.
170
c. Remuneration of directors (during the current year and
last three financial years).
116
d. Related party transactions entered during the last three financial years immediately preceding the year of circulation of offer letter including with regard to loans made or, guarantees given or securities provided.
F-40
e. Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years immediately preceding the year of circulation of offer letter and of their impact on the financial statements and financial position of the company and the corrective steps taken and
proposed to be taken by the company for each of the said reservations or qualifications or adverse remark.
170
f. Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years immediately
preceding the year of circulation of offer letter in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section- wise details thereof for the company and all of its
subsidiaries
170
g. Details of acts of material frauds committed against the company in the last three years, if any, and if so, the action taken by the company.
170
4. FINANCIAL POSITION OF THE COMPANY
a. The capital structure of the company in the following manner in a tabular form:
(i) (a) The authorised, issued, subscribed and paid up capital
(number of securities, description and aggregate nominal value);
59
26
(b) Size of the present offer; and 59
(c) Paid up capital: 59
(A) After the offer; and 59
(B) After conversion of convertible instruments (if applicable) Not applicable
(d) Share premium account (before and after the offer). Not applicable
(ii) (a) The details of the existing share capital of the issuer company in a tabular form, indicating therein with regard to each allotment, the date of allotment, the number of shares allotted, the face value of the shares allotted, the price
and the form of consideration. Provided that the issuer company shall also disclose the number and price at which each of the allotments were made in the last one year preceding the date of the offer letter separately indicating the allotments made for considerations other than cash and the details of the consideration in each
case
59
b. Profits of the company, before and after making provision for tax, for the three financial years immediately preceding the date of circulation of offer letter
F-4
c. Dividends declared by the company in respect of the said three financial years; interest coverage ratio for last three years (Cash profit after tax plus interest paid/interest paid).
65
d. A summary of the financial position of the company as in
the three audited balance sheets immediately preceding the date of circulation of offer letter.
F-3
e. Audited Cash Flow Statement for the three years immediately preceding the date of circulation of offer letter.
F-5
f. Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company.
170
5. A DECLARATION BY THE DIRECTORS THAT
175
a. The company has complied with the provisions of the Act and the rules made thereunder.
b. The compliance with the Act and the rules does not imply
that payment of dividend or interest or repayment of debentures, if applicable, is guaranteed by the Central Government.
c. The monies received under the offer shall be used only for the purposes and objects indicated in the Offer letter
27
SUMMARY OF THE ISSUE
The following is a general summary of the terms of the Issue. This summary should be read in conjunction with,
and is qualified in its entirety by the information appearing elsewhere in this Placement Document, including
under the sections titled "Risk Factors", "Use of Proceeds", "Placement" and "Issue Procedure".
Issuer Cox & Kings Limited.
Face value per Equity Share ` 5.
Issue Price per Equity Share ` 305.
Issue Size The issue of up to 32,787,000 Equity Shares at a premium of ` 300 each,
aggregating up to ` 10,000.04 million.
A minimum of 10% of the Issue Size, i.e., up to 3,278,700 Equity Shares
shall be available for Allocation to Mutual Funds only, and up to
29,508,300 Equity Shares shall be available for Allocation to all QIBs,
including Mutual Funds. In case of under-subscription in the portion
available for Allocation only to Mutual Funds, such minimum portion or
part thereof may be Allotted to other eligible QIBs.
Floor Price per Equity Share ` 309.18. The committee of the Board of Directors of the Company, on
November 25, 2014, approved a discount of ₹ 4.18 on the Floor Price in
terms of Regulation 85 of the SEBI Regulations.
Equity Shares outstanding
immediately prior to the Issue
136,527,890
Equity Shares outstanding
immediately after the Issue
169,314,890
Eligible investors QIBs as defined in Regulation 2(1)(zd) of the SEBI Regulations.
Listing The Company has made applications to each of the Stock Exchanges to
obtain in-principle approval for listing of the Securities.
Transferability restrictions The Securities being Allotted pursuant to this Issue shall not be sold for a
period of one year from the date of Allotment except on the floor of the
Stock Exchanges. Please see the section titled “Transfer Restrictions”.
Closing The Allotment of the Securities offered pursuant to the Issue is expected
to be made on or about November 27, 2014 (the Closing Date).
Ranking The Securities being issued in the Issue are subject to the provisions of
our Memorandum and Articles of Association and shall rank pari passu
in all respects with the existing Equity Shares, including with respect to
dividend rights. Shareholders will be entitled to participate in dividends
and other corporate benefits, if any, declared by us after the Closing Date,
in compliance with the Companies Act. Shareholders may attend and
vote in shareholders’ meetings in accordance with the provisions of the
Companies Act. Please see the section titled “Description of Shares”.
Use of Proceeds The net proceeds of the Issue (after deduction of fees, commissions and
expenses) are expected to be approximately ` 10,000.04 million.
28
Please see section titled “Use of Proceeds”.
Lock-up The Company will not, from the date hereof and for a period of up to
sixty (60) days from the Closing Date, without the prior written consent
of the Global Coordinator and the Book Running Lead Manager, directly
or indirectly: (a) issue, offer, lend, sell, pledge, contract to sell or issue,
sell any option or contract to purchase, purchase any option or contract to
sell or issue, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any Equity Shares,
or any securities convertible into or exercisable or exchangeable for
Equity Shares or publicly announce an intention with respect to any of
the foregoing; (b) enter into any swap or other agreement that transfers,
directly or indirectly, in whole or in part, any of the economic
consequences of ownership of Equity Shares or any securities convertible
into or exercisable or exchangeable for Equity Shares (regardless of
whether any of the transactions described in clause (a) or (b) is to be
settled by the delivery of Equity Shares or such other securities, in cash
or otherwise); or (c) publicly announce any intention to enter into any
transaction falling within (a) or (b) above or enter into any transaction
(including a transaction involving derivatives) having an economic effect
similar to that of an issue or offer or deposit of Equity Shares in any
depositary receipt facility or publicly announce any intention to enter into
any transaction falling within (a) or (b) above; provided, however, that
the foregoing restrictions do not apply to (i) the issuance of any Equity
Shares pursuant to the Issue and (ii) issuance and allotment of securities
by the Company to the Promoter Group (“Preferential Issue”);
The Promoters and Promoter Group entities (Mr. A.B.M. Good, Mr. Ajay
Ajit Peter Kerkar, Ms. Urrshila Kerkar, Ms. Elizabeth Kerkar, Liz
Investments Private Limited, Sneh Sadan Graphic Services Ltd., and
Kubber Investment (Mauritius) Pvt. Ltd.) have also agreed that they will
not, from the date hereof and for a period of up to sixty (60) days from
the Closing Date, without the prior written consent of the Global
Coordinator and Book Running Lead Manager, directly or indirectly: (a)
sell, contract to sell, purchase any option or contract to sell, grant any
option to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any Equity Shares, or any securities convertible into or
exercisable or exchangeable for Equity Shares or publicly announce an
intention with respect to any of the foregoing; (b) enter into any swap or
other agreement that transfers, directly or indirectly, in whole or in part,
any of the economic consequences of ownership of Equity Shares or any
securities convertible into or exercisable or exchangeable for Equity
Shares (regardless of whether any of the transactions described in clause
(a) or (b) is to be settled by the delivery of Equity Shares or such other
securities, in cash or otherwise); or (c) publicly announce any intention to
enter into any transaction falling within (a) or (b) above or enter into any
transaction (including a transaction involving derivatives) having an
economic effect similar to that of an issue or offer or deposit of Equity
Shares in any depositary receipt facility or publicly announce any
intention to enter into any transaction falling within (a) or (b) above.
Risk factors Please see section titled "Risk Factors" for a discussion of risks you
should consider before investing in the Securities.
Security Codes:
(A) Equity Shares-
ISIN
INE008I01026
29
BSE Code
NSE Code
(B) GDR (Luxembourg
Stock Exchange)
ISIN
533144
COX&KINGS
COXKINGSGDR
US2238991051
Outstanding GDRs The GDRs issued in August, 2010 by the Company are listed on the
Luxembourg Stock Exchange since then. Outstanding GDRs as of September
30, 2014 are 571,008 and represent an equivalent number of equity shares
constituting 0.42% of the then paid-up Equity Share Capital of the Company.
30
SUMMARY OF THE BUSINESS
Overview
We are an international leisure and educational travel company with operations in 23 countries across four
continents. We have market leading brands in the leisure travel and education travel segments. Historically, our
core business has been the sale of packaged holidays for leisure travel, with a particular focus on cultural and
adventure tourism. We have also grown into other complementary business segments in recent times. We are a
market leader in providing residential outdoor activity trips for primary students in the UK and organize study
visits and tours for secondary and high school students from the UK and Germany to various global destinations.
We also operate a hotel chain that offers budget accommodation in Germany, Austria and the UK targeting
student groups and young urban travellers.
Our “Cox & Kings” brand has evolved over a period of more than 250 years, and was ranked first in a survey of
“Top Brands in India” (2008), conducted by research agency, TNS and co-funded by Media magazine. We have
won numerous awards, including the award for the "Favourite Outbound Tour Operator" (2014) by Outlook
Traveller, and "Favourite Specialist Tour Operator" (2013) by Condé Nast Traveller Readers.
We operate our leisure travel business in India and across 17 international locations. In India, we distribute our
products and services through 241 points of presence covering 149 cities comprising 12 branch sales offices, 143
franchisee sales shops, and 86 agents as of September 30, 2014. Outside India, we operate through subsidiaries in
the UK, Japan, Australia, New Zealand, United Arab Emirates, the United States, the Netherlands, Singapore and
Canada. We maintain branch offices in Taiwan, Moscow, Maldives and Tahiti, and representative offices in
Russia, Brazil, Germany and South Africa.
We have operations pertaining to our education travel business in the UK, Germany, Austria, France, Spain,
Australia, Netherlands, Belgium and Ireland. We operate our education travel business under several leading
European brands, including PGL, NST and Meininger.
As of September 30, 2014, we had more than 3,500 permanent employees and 1,700 contract employees,
comprising approximately 2,000 employees in India and the remaining located in the UK, Netherlands, Germany
Australia, Japan, Dubai, the United States, New Zealand and France. Most of our contract employees are in the
educational travel market segment.
Our consolidated revenues in the years ended March 31, 2012, 2013 and 2014, and in the six months ended
September 30, 2014 were `8,735.1 million, `18,675.2 million, `23,506.6 million and `16,328.6 million,
respectively, while consolidated net profit in the years ended March 31, 2012, 2013 and 2014, and in the six
months ended September 30, 2014 was `416.1 million, `2,484.2 million, `3,831.7 million and `338.68 million,
respectively.
Our Competitive Strengths
One of the largest Travel and Tour Companies in India with strong brand recognition
We believe we are one of the largest travel and tour companies in India. Our brand “Cox & Kings”, which has
evolved over a period of more than 250 years, is one of the oldest, and we believe, one of the most recognized,
names in the travel and tourism industry. “Cox & Kings” was ranked first in a survey of “Top Brands in India”
(2008), conducted by research agency TNS and co-funded by Media magazine. We also have won several
prestigious awards for our services, including “Favourite Outbound Tour Operator” and “Favourite Inbound Tour
Operator” awarded by The Outlook Traveller (2014), “Favourite Specialist Tour Operator - 1st Runner-Up”
awarded by Condé Nast Traveller Readers (2013), “Best Outbound Tour Operator” awarded by ITCTA (2013),
“India's Leading Tour Operator” and “India's Leading Travel Agency” awarded by World Travel (2013), “Best
Outbound Tour Operator” awarded by Hospitality India & Explore the World Annual International Awards
(2013), “Best Inbound Tour Operator” awarded by TAAI (2013), “Best Company providing Foreign Exchange in
31
India” awarded by CNBC Awaaz (2013) and “Award for Contribution to the Promotion of Taiwan Tourism in
2013” awarded by Taiwan Tourism (2013). We have created several strong brands in India. Our Duniya Dekho
brand caters to overseas group tours, our Bharat Dekho brand caters to our domestic group tours in India, the
Gaurav Yatra brand caters specifically to the Jain and Gujarati communities, our Anand Yatra brand caters to the
Marathi community in India, and our Luxury Escapades brand is tailored to premium overseas individual
travellers.
We believe that providing a superior service experience to customers is among the most important success
factors in the travel and tourism industry. Our long track record of providing high-quality travel and tour
services, as evidenced by our strong brand name recognition and the numerous awards we have received, have
enabled us to become a leader in the Indian travel and tour industry.
Bouquet of market leading brands across various geographies
We have several market leading brands across the UK, the Netherlands, India and the United States in each of
our market segments. In the UK, the Cox & Kings brand is a specialist brand for premium leisure tours, our PGL
brand is the market leader for residential outdoor activity trips for primary students, our NST brand is a leading
brand for study visits and tours for secondary students and our Explore brand is one the leading brands in the UK
for soft adventure travel tours. We believe in offering complete travel solutions for our holiday packages,
including visa, insurance and foreign exchange.
The products and services that we offer through our brands have won several awards, in India and
internationally. Some of the recent awards include the Indian National Tourism Awards 2013 awarding Cox &
Kings Ltd. with ‘Best Overseas Tour Operator to India from the UK’ award, SPAA 2013 awarding Superbreak
with ‘Best U.K. Holiday Company’, British Travel Awards 2013 awarding Explore with ‘Best Medium Holiday
Company for Safari, Wildlife and Nature’ award, Travel+Leisure World’s Best Awards 2012 ranking C&K U.S.
as ‘One of the Best Tour Operators for Africa’. Our PGL brand is the market leader for residential outdoor
activity trips for primary students and has won several awards, including “Winner - For our outstanding
contribution towards supporting young people through the power of PE and sport”, Youth Sport Trust Business
Awards, 2012, and “Best Youth Operator to France, 2012”, Atout France, the Tourism Development Agency of
France. Our NST brand is the market leader for study visits and tours for secondary students, Explore is one the
leading brands in the UK for soft adventure travel tours and has won the awards for “Best Adventure and
Activity Specialist” by Travel Bulletin Star Awards (2013). Our Superbreak brand has won awards for "Best
Hotel Booking Company” by SPAA Travel Awards (2013) and “Best Operator UK Holidays” by Travel Weekly
Globes (2014). We believe the awards we have won are a reflection of the strength of our market leading brands
across various geographies.
Expansive Distribution Network across Our Worldwide Operations
We believe that a strong distribution network is essential to expand our customer base in the travel and tours
industry, and we therefore have constantly focused on strengthening our reach. We have a strong distribution
network with a mix of retail distribution through shops, franchise outlets, direct distribution through call centre
agents and the Internet, and through our channel partners. In India, we distribute our products and services
through 241 points of presence covering 131 cities across 24 states, comprising 12 branch sales offices, over 143
franchisee sales shops, and 86 agents. In the UK, we sell our leisure packages through several high street agents
including TUI, Thomas Cook and Countrywide. In Australia, we distribute our products through the leading
travel retail agent chains. We also generate significant revenues for all our international geographies from our
direct marketing channels, including bookings made through call centre agents or the Internet.
We operate branch offices in Taiwan, Moscow, Maldives and Tahiti, and representative offices in Russia, Brazil,
Germany and South Africa to strengthen our global sales and service network. In the education travel segment,
our direct sales teams of PGL and NST reach out directly to our key clients. In the case of Meininger, we sell
through a mix of online bookings agent and direct marketing (website, call centre and walks-ins). We are a
32
shareholder member of Radius Inc, a consortium of leading business travel agents present in more than 3,600
locations across approximately 80 countries.
Strong Technology Platform
Technology is critical for our business. We have developed and implemented a comprehensive central
reservation technological platform for our travel products and services. Our business partners and clients can
make reservations for flights, excursions, transfers, hotels and other services online and design packages
dynamically. Our platform enables us to rapidly expand our franchisee network and is supported by CRM
software that improves our business efficiencies in terms of reduced turn-around time (TAT) and increased
business handled per employee. Our technology also enables us to provide white label/co-branded offerings for
clients such as Jet Escapes. We have also built-in online payment gateways, which are well integrated to our
existing technology platform. We use data-management software, including ERP, and have integrated our
computer reservation systems (CRS) with our mid and back office. We have a dedicated call centre with
appropriate technology infrastructure and staffed with well informed and efficient executives. We believe that
the technologies we use in our operations give us a significant competitive edge by enabling us to manage our
unified access to hotel reservations and airline tickets in an effective manner to minimize costs.
Experienced management team
We are led by an experienced management group that has worked and has been associated with the travel
industry for many years and developed the skill, expertise and vision to continue to expand our business in new
markets. Our operations are overseen by a professional management team, under the guidance of the Chairman,
Mr. A. B. M. Good and Directors, Mr. Ajay Ajit Peter Kerkar and Ms. Urrshila Kerkar.
We believe that the strategic leadership and direction provided by our management team enables us to explore
new opportunities while strengthening our current operations. For further information on our management team,
please see "Board of Directors and Senior Management".
Our Business Strategy
Continue to consolidate product sourcing operations globally
We have rapidly grown our business operations in recent years, organically and through acquisitions. Since 2008,
we have increasingly leveraged the size of our global operations to consolidate buying efforts. We believe that
this initiative has enhanced our bargaining power with our vendors, thereby generating significant cost savings
by consolidating buying for air travel, hotel accommodations, car rentals and ground handling services. We
believe that this has also enabled us to offer competitive travel packages to our leisure customers and business
clients, thereby increasing our customer base and revenues. We intend to leverage increased business volumes in
Europe and other international destinations to continue consolidating our product sourcing operations globally,
particularly hotel aggregation and adventure aspects of the leisure segment of our business, to generate cost
savings and improve our profitability. Further, we also intend to continue to consolidate our various other
expenditures like capital expenditure on information technology systems and marketing costs to benefit from
economies of scale.
Capitalize on our global platform to enhance and cross sell our product and service offerings
We intend to capitalize on our global platform to enhance and cross sell our products across each of our market
segments in the geographic regions where we operate. For instance, we intend our global platform to provide
ground handling services in destinations used by our outbound customers, thereby maximising profits and
ensuring quality control for our services. Similarly, we also intend to use our product expertise to introduce
similar products in new geographies tailored to suit local requirements and sensibilities. For instance, we are
exploring the possibility of introducing our educational tour products into markets such as India. We also intend
to expand our hotel aggregation business to include non-European hotels, particularly hotels in Australia, India,
33
the Middle East and the Far East. We also intend to market our Meininger properties to our current customer
base in India and other geographies.
Consolidate our presence in the leisure travel segment in India
We intend to leverage our significant presence in the leisure travel market in India to capitalize on India’s
resilient economy. The rise in disposable income and aspiration levels of Indian consumers make them a key
target segment for our future growth. With international travel becoming progressively more affordable, we
believe that this trend will accelerate, and that there will be an increase in the number of people choosing to
travel outside India for leisure. We also believe that the fragmented travel market in India presents an
opportunity for large organized travel and tour operators, such as us, to capture a greater share of the market. We
continue to expand our ground handling activities in certain overseas locations which cater to our outbound
customers, thus enabling cost reduction and better-personalised services for Indian outbound clients. We believe
that travel tours are increasingly being used by corporates in India to incentivize their employees or their
suppliers and distributors, and we intend to continue leveraging our market position and product offerings to
capitalize on the opportunities presented by this rapidly growing segment of leisure travel.
Further expand our global distribution network
We intend to further expand our distribution network infrastructure across all markets. In India, we seek to
improve market penetration by adding franchised shops that exclusively offer our products and services. In our
franchisee model, the franchisee is permitted to operate a travel outlet based on our business concept with the use
of our brand name. In our international markets, we will continue to focus on boosting our agent network and
call centre sales support. We will also evaluate new jurisdictions in which a local distribution presence (through
branches or representative offices) will contribute to our growth and profitability. We also have made
investments into growing our online channels for conducting travel business. Our websites in various countries
offer comprehensive travel solutions to our online customers, who can purchase airline tickets, make hotel
reservations, obtain logistic support, or purchase tour packages. Our websites also enable users to purchase any
combination of the above and customize their holiday. We believe that our online initiatives allow us to
capitalize on the rise in the number of internet users in these markets and thereby reach a wider customer base.
We intend to grow our PGL and Meininger product offerings in new markets
We believe the education travel segment offers significant growth opportunities, and that we are well positioned
to consolidate our market share in this segment in the UK and Europe. We are also well placed to leverage our
product expertise in this segment to grow our presence in Australia where we have recently introduced PGL and
in other newer markets including India in order to benefit from a first mover advantage. Further, we also intend
to expand our budget accommodation offering targeted at student tour groups and young urban travellers through
our Meininger brand by adding new properties in Europe, where we have signed four new hotel leases that we
expect to be operational within the next two to three years.
34
SUMMARY OF FINANCIAL INFORMATION
The following tables present summary financial information regarding our business and should be read together
with “Management's Discussion and Analysis of Financial Condition and Results of Operations” and our
financial statements for the fiscal years ended 31 March 2012, 2013, 2014 included elsewhere in this Placement
Document. The summary financial information, income statement and balance sheet information for fiscal years
ended 31 March 2012, 2013 and 2014 are derived from our audited consolidated financial statements for the
respective fiscal years.
CONSOLIDATED BALANCE SHEET (Rupees in Million)
As of March 31,
Particulars 2014 2013 2012
EQUITY AND LIABILITIES
Shareholder's Funds
Share Capital 682.64 682.64 682.64
Reserves and Surplus 16,865.51 12,575.98 11,240.32
Minority Interest 8,205.40 5,421.86 -
25,753.55 18,680.48 11,922.96
Non-Current Liabilities
Long-term borrowings 47,394.55 39,181.61 34,511.75
Deferred tax liabilities (Net) 699.90 746.37 766.31
Long term provisions 244.80 101.50 265.70
48,339.25 40,029.49 35,543.76
Current Liabilities
Short-term borrowings 3,463.38 2,563.64 2,549.96
Trade payables 5,427.69 4,699.74 4,249.17
Other current liabilities 21,179.45 17,169.03 21,718.11
Short-term provisions 643.33 375.62 514.68
30,713.85 24,808.03 29,031.92
Total 1,04,806.65 83,518.00 76,498.64
ASSETS
Non-current assets
Fixed assets
Tangible assets 22,882.20 18,776.80 18,460.80
Intangible assets 1,051.70 839.30 686.40
Capital work-in-progress 470.70 115.10 486.40
Intangible assets under development 1,717.30 1,319.30 751.10
Goodwill on Consolidation 40,532.05 27,332.90 26,628.90
66,653.95 48,383.40 47,013.60
Non-current investments 321.00 4,383.09 2,761.00
Deferred tax Assets (Net) 1.08 66.65 17.20
Long term loans and advances 150.74 151.30 341.61
Other non-current assets - - -
472.82 4,601.04 3,119.81
Current assets
Current investments 280.83 280.92 280.70
35
Inventories 199.09 185.95 172.59
Trade receivables 11,355.84 9,054.02 7,150.69
Cash and Cash Equivalents 13,786.25 12,692.47 10,532.84
Short-term loans and advances 12,041.32 8,287.09 8,211.91
Other current assets 16.55 33.10 16.50
37,679.88 30,533.55 26,365.23
Total 1,04,806.65 83,518.00 76,498.64
2.44 0.02
CONSOLIDATED STATEMENT OF PROFIT AND LOSS ACCOUNT (Rupees in Million)
Particulars For the year ended March 31,
2014 2013 2012
INCOME : -
Revenue from operations 23,075.92 18,087.40 8,379.37
Other Income 430.67 587.85 355.64
Total Revenue 23,506.59 18,675.25 8,735.01
EXPENDITURE : -
Employee benefit expenses 8,747.87 6,957.55 3,852.54
Finance costs 3,235.76 3,704.50 1,841.95
Depreciation and amortization expense 1,711.30 1,473.60 491.30
Other expenses 3,222.09 3,949.13 1,550.15
Total Expenses 16,917.01 16,084.78 7,735.94
Profit before exceptional items and tax 6,589.57 2,590.47 999.07
Less: Exceptional Items 456.17 620.80 311.80
Add: Profit / (Loss) on Disposal of Subsidiary - 77.10 -
Profit before tax 6,133.40 2,046.77 687.27
Tax Expenses:
Current tax 1,685.72 603.00 376.60
Deferred tax (102.70) (27.20) 19.80
Current tax expenses relating to prior years 59.80 (54.80) 21.20
1,642.83 521.00 417.60
Profit after tax for the year 4,490.57 1,526.77 269.67
Add : Share of Income/(Loss) from Investment in
Associates (15.42) 403.50 146.20
Profit for the year 4,475.15 1,930.27 415.87
Share of Minority Interest 643.42 (555.80) -
Profit after Minority Interest 3,831.73 2,486.07 415.87
Earnings each per equity share (Face Value per share Rs. 5 each):
36
Basic (In Rs.) 28.07 18.21 3.05
Diluted (In Rs.) 28.07 18.21 3.05
CASH FLOW STATEMENT
(Rupees in Million)
Particulars
For the year ended March 31.
2014 2013 2012
Cash Flow from Operating Activities
Profit before Tax
6,133.40 1,968.60 6,87.40 Adjustment for:
Depreciation
1,711.30 1,473.60 4,91.30
Profit on sale of Investment
(0.17) - (81.89) Dividend on Investment
(1.20) (7.82) (53.55)
Interest Income
(275.24) (358.42) (58.80)
Interest Expense
3,235.76 3,705.40 1,734.04
Bad Debts
4.89 2.76 5.27
Foreign Exchange Gain / Loss on Translation
(1,164.88) (442.71) (300.30) Profit on Sale of Fixed Assets (Net)
(77.79) (80.28) (0.88)
Operating profit before working capital changes
9,566.07 6,261.13 2,422.58
Adjustment for:
(Increase)/Decrease in Inventories
1.91 (13.30) 42.30 (Increase)/Decrease in Trade Receivable
(2,034.36) (1,906.20) (600.90)
(Increase)/Decrease in Loans and Advances
(1,657.84) (1,466.70) (4,994.00)
Increase/(Decrease) in Current Liabilities
3,510.82 (30.90) 2,023.60
Cash Generated from Operations
9,386.59 2,844.03 (1,106.42)
Income Taxes Paid (1,293.85) (806.00) (259.40)
Net cash flow from operating activities 8,092.74 2,038.03 (1,365.82)
Cash Flow from Investing Activities
Purchase of Fixed Assets & Capital Work In Progress (2,840.58) (1,694.90) (1,433.70)
Acquisition of Subsidiaries - - (27,707.40)
Advances (given)/ Refund - - 284.95 Sale of Fixed Assets 178.05 - 126.50
Interest Received 275.24 358.42 58.80
Dividend Received 1.20 351.20 53.60 Purchase of Investment - - 250.40
Additional Investment in Meininger
(Refer Schedule 12) (2,568.23) (1,719.00) -
Intercorporate Deposits given (1,351.97) (310.60) -
Sale of Subsidiary 68.50 908.30 -
Sale of Investments - - 1,763.00
Net cash used in investing activities (6,237.80) (2,106.59) (26,603.85)
Cash Flow from Financing Activities
Proceeds of Long Term Borrowing 14,467.54 13,564.10 24,991.80
Repayment of Long Term Borrowing (14,063.90) (13,433.30) (1,000.00)
Movements of Short Term Borrowing 899.74 13.70 2,550.00
Proceed from Issue of Preference Shares in Subsidiary 1,091.16 6,499.00 -
Expenses for Issue of Shares (56.46) - (176.60)
Dividend Paid (158.68) (158.80) (79.50)
Interest Paid (3,365.25) (3,917.00) (1,449.20)
Net cash flow from financing activities C (1,185.85) 2,567.70 24,836.50
Net Increase in cash and Cash equivalents (A+B+C) 669.09 2,499.14 (3,133.16)
Cash and Cash equivalents
at the beginning of the period 12,644.72 10,144.10 9,608.00
as part of acquired subsidiary 390.00 - 3,669.20
Effect of Unrealised gain/(loss) on revaluation 40.41 1.61 -
at the end of the period 13,744.25 12,644.80 10,144.00
Net Increase in cash and Cash equivalents 669.12 2,499.09 (3,133.20)
37
RISK FACTORS
An investment in the Securities involves risk. Prospective investors should carefully consider the following
risk factors as well as other information included in this Placement Document prior to making any decision as to
whether or not to invest in the Equity Shares. The risks described below and any additional risks and
uncertainties not presently known to our Company or that are currently deemed immaterial could adversely
affect our business, financial condition, liquidity or results of operations. As a result, the trading price of the
Equity Shares could decline and investors may lose part or all of their investment. Prospective investors should
pay particular attention to the fact that we are an Indian company and are subject to a legal and regulatory
environment which may differ in certain respects from that of other countries.
Any potential investor in, and purchaser of, the Equity Shares should pay particular attention to the fact that
we are governed in India by a legal and regulatory environment which in some material respects may be
different from that which prevails in other countries. Prior to making an investment decision, prospective
investors and purchasers should carefully consider all of the information contained in this Placement Document
(including the consolidated Financial Statements).
Risks Related to Our Company and Our Business
We operate in a highly competitive and fragmented market.
We operate in a highly competitive market. We face stiff competition from other players operating in this
sector and also from the un-organized sectors. Pricing is one of the factors that play an important role in our
customers’ selection of our products. There are several strategies adopted by our competitors to increase their
market share through advertising, pricing, service, new product introductions and distribution reach among
others. This increased competition may affect our margins. In order to protect our existing market share or
capture market share, we may be required to increase expenditure for advertising and promotions and to
introduce and establish new products. Due to inherent risks in the marketplace associated with advertising and
new product introductions, including uncertainties about consumer response, increased expenditure may not
prove successful in maintaining or enhancing our market share and could result in lower profitability.
Stiff competition from a variety of competitors in the organized and un-organised sectors adversely impacts
our operations and profitability. Increased competition could result in reduced margins, loss of segment share
and damage to our brand. There can be no assurance that we will be able to compete successfully against current
and future competitors or that competition will not have a material adverse effect on our business, financial
condition and results of operations. A portion of the tourism business is now increasingly being cornered by
companies offering holidays on a ‘time share’ basis, which increases competition.
Our growth will depend on our ability to sustain our brands and failure to do so will have a negative impact
on our ability to compete in this industry.
We believe that our brands are well respected and recognised in the market today. Continuing efforts towards
building and sustaining our brands will be critical for the recognition of our services. Promoting and positioning
our brands will depend largely on the success of our marketing efforts and our ability to back that with high
quality services. Brand promotion activities may /may not result in incremental revenue, and even if they do, any
incremental revenue may not offset the expenses we incur in building our brand. If we fail to promote and
maintain our brand, our business, financial condition and results of operations could be adversely affected.
The international nature of our business exposes us to several risks, many of which are beyond our control.
We have operations in India and in 23 other countries across the globe including, the United Kingdom. Japan,
Australia, New Zealand, United Arab Emirates, the United States, Germany, Ireland, the Netherlands, Singapore
and Canada. We conduct tours across the globe and service clients from respective regions. As a result, we are
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exposed to risks typically associated with conducting business internationally, many of which are beyond our
control. These risks include:
• significant currency fluctuations between the Euro, Japanese Yen, U.S. dollar and the Pound Sterling
and the Indian rupee (in which a significant portion of our costs are denominated);
• social, political or regulatory developments that may result in an economic slowdown in any of these
regions;
• legal uncertainty owing to the overlap of different legal regimes, and problems in asserting contractual
or other rights across international borders;
• potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in
the countries in which we operate;
• changes in regulatory requirements;
• the burden and expense of complying with the laws and regulations of various jurisdictions; and
• terrorist attacks and other acts of violence or war.
Through our international operations, we also have exposure to different economic climates, political arenas,
tax systems and regulations that could negatively affect foreign exchange rates. Because we transact in foreign
currency, changes in exchange rates could have a negative effect on our results of operations. Our exchange rate
risk will increase as we increase our operations in international markets.
The occurrence of any of these events could have a material adverse effect on our business, results of
operations and financial condition.
Our inability to manage our growth could disrupt our business and reduce our profitability.
We have experienced rapid growth in recent years and expect to expand the size and geographical scope of
our business in India and internationally. Although we plan to continue to expand our scale of operations through
organic growth and investments in other entities, we may not grow at a rate comparable to our growth rate in the
past, either in terms of income or profit.
Moreover, we continuously evaluate ideas that strategically fit our existing business and expand the products
and services that we offer to our customers. We have in the past made several acquisitions that expose us to
geographies and overseas markets which are new to us. For example, in 2011 we acquired Holidaybreak, which
now forms a significant part of our business, and offers products and services that we traditionally have not
provided and in markets that we are not familiar with. Similarly, in 2008, we acquired Tempo Holidays Pty Ltd.
based in Australia with its wholly-owned subsidiary Tempo Holidays NZ Ltd. in New Zealand. And in 2009, we
completed the acquisition of East India Travel Company Inc., which is in the business of selling upmarket tour
and travel packages in the United States.
We believe that our growth strategy will place significant demands on our management, financial and other
resources. It will require us to continuously develop and improve our operational, financial and internal controls.
Continuous expansion increases the challenges involved in financial management, recruitment, training and
retaining high quality human resources, preserving our culture, values and entrepreneurial environment, and
developing and improving our internal administrative infrastructure and more importantly adhering to quality
and high standards that meet customer expectations. Any inability on our part to manage such growth could
disrupt our business prospects, impact our financial condition and adversely affect our results of operations.
39
Some segments of our business are seasonal in nature.
Revenues and cash flows in the travel and tourism industry are affected by seasonality and depend on various
factors such as school holidays, public holidays, conducive weather conditions and political conditions in the
destination for travel. Our revenues are generally higher for inbound tourism during the second half of each fiscal
year as compared to the first half of the fiscal year. The first half of our fiscal year includes India’s summer and
monsoon seasons hence international leisure travellers to, and domestic leisure travellers in, India are
substantially fewer than in the second half of the year but revenues for outbound tourism are higher in the first
half of the fiscal year. Any disruptions of our operations or adverse external factors affecting business during
these key seasons may lead to a reduction in our revenues and may have a material adverse impact on our results
of operations.
On the other hand, our subsidiary, Holidaybreak, has traditionally reported an operating loss in the six month
period ending March 31 in each financial year due to the seasonal nature of the Camping division business,
which focus exclusively on outdoor activities and therefore do not generate any significant revenues during the
winter months in Europe while continuing to incur operational expenses during those months. For this reason,
our consolidated results of operations during the six month period ending March 31 in each financial year
performs at a significantly lower level than for the six month periods ending September 30 in each financial year.
For further information on seasonality, please see "Management's Discussion and Analysis of Financial
Condition and Results of operations—Seasonality".
The pro forma financial information contained herein may not accurately reflect our historical financial
position, results of operations and cash flows
We have prepared and presented our pro forma financial information based on our historical consolidated
financial statements for the year ended March 31, 2014 and for six months ended September 30, 2014. Our
historical results for any prior periods are not necessarily indicative of results to be expected for any future
period and our pro forma results have been compiled, on the basis of assumptions, for illustrative purposes only.
The pro forma consolidated statements of financial performance are prepared for illustrative purposes only, after
making relevant adjustments to give effect to the disposal of our camping business as having been effected on
April 1, 2013.
As the pro forma financial information is prepared for illustrative purposes only, such information may not
give a true picture of the financial position, results of operations or cash flows of our Group had the transactions
or events actually occurred on the stated date of such pro forma financial information. Furthermore, the pro
forma information does not purport to predict our future financial condition, results of operations, prospects or
cash flows. As a result, your ability to understand our financial condition and results of operations or cash flows
based on our historical combined financial statements or pro forma financial information may be limited.
We may be subject to liabilities in connection with the disposal of our camping business.
In our agreement to dispose our camping business in May 2014, we have agreed to indemnify the buyer of our
camping business for losses arising (i) under the (U.K.) Pensions Act 2004; (ii) any civil, criminal, arbitration or
other proceedings which may be initiated either prior to or following completion or which are pending,
threatened or outstanding in respect of the road traffic accident and related death of Mr. Wayne Doyle which
occurred on April 11, 2003 in France; and (iii) any breach of law in connection with the employment, work or
engagement of any persons who provide services to or on behalf of the disposed of entities who mainly or wholly
carry out their duties in France, including for these purposes any breaches occurring up to November 30, 2014 to
the extent arising out of such existing arrangements. Our liability under (ii) above is capped at GBP 250,000.
This indemnity requires us to make a Pound by Pound or Euro by Euro payment to cover losses incurred by the
buyer in respect of the indemnified matters, which could have an adverse effect on our results of operations.
40
Our failure to attract and retain customers in a cost-effective manner could adversely affect our business,
financial condition and results of operations.
Our long-term success depends on our continued ability to increase the overall number of customer
transactions in a cost-effective manner. In order to increase the number of customer transactions, we must retain
business from existing customers and also attract new customers through our distribution and sales channels. In
order to attract and retain customers, we may also need to increase expenditures for offline and online advertising
and marketing initiatives. No assurances can be provided that we will be successful in acquiring and retaining
customers in a cost-effective manner.
Our failure to accurately anticipate demand for our products could adversely affect our business, financial
condition and results of operations.
We need to determine travel appetite for our markets well in advance in order to obtain better costs and efficient
partner tie-ups to facilitate our products. If we are unable to anticipate high demand it may lead to higher costs
and loss of opportunity and customers to competitors and if we overestimate the demand and are not able to meet
the projected targets, it may have an adverse effect on our relationship with our partners and agencies. This is a
major and persistent risk in our line of business. In recent years, customers have been increasingly booking
holidays nearer the time of travel than has traditionally been the case. This type of booking behaviour makes it
considerably more difficult for tourism companies to engage in seasonal planning and has the potential of
making us more vulnerable to short-term changes in customer demand.
Our business is in part dependent on our continuing relationship with our suppliers and any adverse changes
in these relationships could adversely affect our business, financial condition and results of operations.
In the normal course of business, we enter into arrangements with other standalone service providers, which
play an important role in helping us provide an integrated services package to our customers. These strategic
alliances not only provide us an advantage in the key services segment, but further strengthen and consolidate the
“Cox & Kings” brand. Our business and results of operations could be adversely affected if we are unable to
maintain a beneficial relationship with these strategic partners and alliances.
Travel suppliers may seek to lower their travel distribution costs by promoting direct bookings, such as
through their own websites. In some cases, supplier direct channels offer advantages to consumers, such as
loyalty programs and/or lower transaction fees. In addition, travel suppliers may choose not to make their travel
products and services available through our distribution channels. To the extent that consumers continue to
increase the percentage of their travel purchases through supplier direct websites and/or if travel suppliers choose
not to make their products and services available to us, our business may suffer.
If any third party services which we depend on become unavailable, this could have a material adverse effect
on our business, financial condition and results of operations, including through a deterioration in customers’
confidence in our ability to offer our services in a reliable manner. The termination or expiration of any of our
contracts with suppliers and our inability to negotiate replacement contracts with other suppliers at comparable
rates or to enter into such contracts in any new may also bring about these adverse effects. In addition, the
efficiency, timeliness and quality of contract performance by third party providers will be largely beyond our
direct control.
Our inability to maintain our relationships with our distribution partners and ensure adherence to standard
operating procedures by our distribution partners may affect our sales operations.
The travel industry operates largely through global associate networks. We sell our tour and travel packages in
our markets through various channels including franchisee shops, sales agents and direct marketing agents. If any
of these agents terminate or do not renew their agreements with us, our distribution network may be reduced,
which may affect our sales operations. Appropriate service delivery by these associates is critical for the success
of our business. Our Company currently has longstanding healthy business relations with its associates and does
41
not foresee any major problem on service delivery from their side. However, while we have certain minimum
standards required to be maintained by any of our agents, absence of adequate monitoring of these sales agents
by us or inability to maintain effective relationships in future may also affect our sales operations and results of
operations.
We may fail to attract and retain enough sufficiently trained employees needed to support our operations and
growth.
The tour and travel industry is highly labour-intensive and our business success, to a significant extent,
depends on our ability to attract, hire, train and retain qualified employees. The industry, including our
Company, experiences employee turnover. There is significant need for professionals with skills necessary to
perform the services we offer to our clients. It is possible that we may lose our skilled and trained staff to our
competitors. High attrition rates, in particular, could result in a loss of domain and process knowledge, which
could result in poor service quality and lead to breaches by us of our contractual obligations. This would also
increase our recruiting and training costs and decrease our operating efficiency, productivity and profit margins
and could lead to a decline in demand for our services. We may also be required to increase compensation to
retain employees and remain competitive in the job market. This could increase our costs and affect our
profitability.
Lack of sufficiently qualified personnel could also limit our growth and our ability to establish operations in
new markets and our efforts to expand geographically. Our failure to attract, train and retain personnel with the
qualifications necessary to fulfil the needs of our existing and future clients, or to assimilate new employees
successfully, could have a material adverse effect on our business, results of operations, financial condition and
cash flows.
Our success depends significantly upon our management team. Any inability on our part to attract and retain
talented professionals or key managerial personnel may adversely affect our business and results of
operations.
We are highly dependent on our whole-time Directors, our senior management, and our other key managerial
personnel for our business. Attracting and retaining talented professionals is key to our business growth. Our
business model is reliant on the efforts and initiatives of our senior level management and our key managerial
personnel, few of whom have been with us for a significant number of years. If one or more members of our
senior management team were to leave their present positions, it may be difficult to find adequate replacements
and our business could be adversely affected. In this regard, we cannot assure you that we will be able to retain
our skilled senior management or managerial personnel or continue to attract new talents in the future.
We are vulnerable to failure of our information technology systems, which could adversely affect our
business. We also rely on external information technology infrastructure for our business, any failure of such
infrastructure would adversely affect us.
Our information technology systems are a critical part of our business and help us manage client details,
bookings, schedules and inventory. Any technical failures associated with our information technology systems,
including those caused by power failures and computer viruses and other unauthorized tampering, may cause
interruptions in our ability to provide services to our clients. Corruption of certain information could also lead to
delayed or inaccurate scheduling in our tour. All of this could affect our quality of services and may damage our
reputation. In addition, we may be subject to liability as a result of any theft or misuse of personal information
stored on our systems or any problems arisen due to wrong scheduling of the tour or any part of the tour. Further,
we have entered into an agreement with global distribution system providers and use their information
technology systems for our business. Any technical failure of their systems or interruption in their services due to
any reason may hamper our business and would adversely affect us.
We may also be vulnerable to rapid changes in technology standards. Technology changes rapidly, especially
in the consumer-oriented tourism business, and our business may suffer if we are unable to keep up with the
42
latest information technology developments. In addition, we may be required to incur expenditure on information
technology in order to keep up with the technological developments of its competitors.
Exchange rate fluctuations may adversely affect our results of operations.
We conduct business in a number of currencies, which subjects us to significant foreign exchange fluctuations
that could adversely impact our results and operations. Revenues of Cox & Kings (UK) Ltd. and Holidaybreak
are in Pounds, revenues of Cox & Kings (Japan) Limited are in Yen, revenues of East India Travel Company, Inc
are in US$, revenues of Tempo Holidays Pty Ltd. are in AUD and India Inbound revenues are in US$, Euro and
GBP. Generally, all outbound tours sold by us in India are charged to the client in the currency that is paid to the
contractors. In other international operations, although we charge the tours to the client in the currency of the
resident country, we manage the foreign exchange risk by entering into derivative contracts. Our profitability
may be adversely impacted by fluctuations in these currencies if we are unable to fully hedge against these
fluctuations. However, our foreign exchange business is affected by exchange fluctuation to the extent of
proprietary trading in this area of business.
We do not have escalation clauses in our contract with our customers.
We do not have escalation clauses in the contract with our customers and consequently during period of rising
prices or any adverse change in tariffs by our business associates/intermediaries, we may not be able to pass
price increases to our customers, which could harm our operational results and financial condition.
We face claims, liabilities and suits from our customers should they perceive any deficiency in service or in
the event of bodily harm or injury to them while on tours organized by us.
We may face financial liabilities or loss of reputation, in the event of accidents and mishaps on our tours. We
attempt to mitigate the associated risks, which may happen due to factors beyond our control, through
appropriate insurance cover. However, our insurance may not be able to cover all such risks. Any mishap,
accident during the tour, which may or may not lead to personal injuries, may take place due to factors which are
beyond our control. Occurrence of such events may have an adverse implication on our business.
Our indebtedness and the conditions and restrictions imposed by our financing and other agreements could
adversely affect our ability to conduct our business and operations.
We have incurred a substantial amount of indebtedness which could adversely affect our financial condition.
As of September 30, 2014, we had total debt (on a consolidated basis) of approximately `48.6 billion. In
addition, we may incur additional indebtedness in the future. Our indebtedness could have several significant
consequences, including but not limited to the following:
• we may be required to dedicate a portion of our cash flow towards repayment of our existing debt which
will reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions
and other general corporate requirements;
• fluctuations in market interest rates may affect the cost of our borrowings since a majority of our
indebtedness is payable at variable rates.
The financing agreements with our lenders contain restrictive covenants that require us to maintain certain
financial ratios and seek the prior permission of these banks and financial institutions for various activities. One
such restrictive covenant gives our lenders the affirmative right to appoint or remove nominee Directors from the
Board of Directors. These restrictive covenants may also affect some of the rights of our shareholders, including
in relation to the declaration of dividends. There could be a material adverse effect on our business, financial
condition and results of operations if we are unable to service our indebtedness or otherwise comply with the
financial covenants of such indebtedness.
43
Some of our fixed assets, movable and immovable properties, and current assets (both present and future)
have been mortgaged and/or charged, including by way of second charge. These charges include a charge over
the escrow of our credit card receivables, personal guarantees by our Promoters, and corporate guarantees by our
Company, our Subsidiaries and Associate companies, as well as counter guarantees issued by us in favor of
lenders pursuant to the financing agreements. The aggregate value of the guarantees issued by our Company for
loans taken by our subsidiaries was US$ 375 million as of September 30, 2014.
Our inability to repay our loans or obtain a discharge of our security may result in enforcement or foreclosure
proceedings against us, which may adversely affect our ability to conduct our business. Failure of our
Subsidiaries to repay credit facilities may lead to the exercise of the guarantees given by our Company which
will be a considerable financial liability for us, and materially adversely affect our financial condition and results
of operations. We believe that our relationships with our lenders are good; we have in the past obtained consents
from them to undertake various actions and have informed them of our activities from time to time. Compliance
with the various terms in our financing agreements is, however, subject to interpretation and there can be no
assurance that we have requested or received all consents from our lenders that are required by our financing
documents. There can also be no assurance that we will receive any required consents on time or at all. If we fail
to obtain such consents, it may adversely affect our ability to conduct our business, profitability, financial
condition and results of operations.
We cannot assure you that we will be able to secure adequate financing in the future on acceptable terms, in
time, or at all.
We may require additional funds in connection with our future business expansion and development
initiatives. In addition to the net proceeds of this Issue and our internally generated cash flow, we may need
additional sources of funding to meet these requirements, which may include entering into new debt facilities
with lending institutions or raising additional debt in the capital markets. If we decide to raise additional funds
through the incurrence of debt, our interest obligations will increase, and we may be subject to additional
covenants. Such financing could cause our debt-to-equity ratio to increase or require us to create charges or liens
on our assets in favor of lenders. If we decide to raise additional funds through the issuance of equity (other than
through a rights issue to existing shareholders), the ownership interest of our existing shareholders will be
diluted. We cannot assure you that we will be able to secure adequate financing in the future on acceptable terms,
in time, or at all. Our failure to obtain sufficient financing could result in the delay or abandonment of any
business development plans we may have, which may affect our business and future results of operations.
We have, in the past, relied on our promoters to provide guarantees and pledges of their securities and other
assets to our lenders to assist us in funding our expansion, which arrangements may not be available in
future.
We have historically depended on guarantees provided to our lenders by our Promoters and our Promoter
Group in order to help fund our expansion plans and other business requirements. As of September 30, 2014, our
Promoters and Promoter Group have provided guarantees for an aggregate amount of `5.06 billion. The
Promoters and other members of the Promoter Group have not committed to provide such forms of credit support
on an ongoing basis. In future, we may be unable to obtain future funding from lenders on favorable terms or at
all without such support, which may curtail our expansion plans and have an adverse effect on our business and
operations.
The Promoters' shareholding in our Company may be diluted and result in a change of control.
As of September 30, 2014, our Promoters and Promoter Group held 81,244,281 Equity Shares of our
Company constituting 59.51% of our total pre-Issue paid-up share capital. Out of the above, the Promoters and
Promoter Group have collectively pledged 38,768,693 Equity Shares constituting 28.40% of our pre-Issue paid-
up share capital as security for their personal loans. Any enforcement of the pledge created on the Equity Shares
held by the Promoters will dilute the shareholding of the Promoters and may affect the management and control
of our Company.
44
Our Company was unable to trace certain secretarial records and have relied on a search report of the RoC
records conducted by an independent practicing company secretary.
We were unable to trace secretarial records of RoC filings in respect of allotment of 100,000 Equity Shares in the
years 1982, 1983 and 1985. In the absence of complete records, we have disclosed the built up of our Share
Capital during this period on the basis of our audited financial statements of these relevant years, search report
and as corroborated with entries in the Register of Members maintained by us.
Our contingent liabilities could adversely affect our financial condition.
As of September 30, 2014, our consolidated contingent liabilities, which are not provided for and which could
adversely affect our financial condition, amounted to `4896.69 million, comprising the following:
• Guarantees given by banks of `3,425.1 million
• Claims against the Company not acknowledged as debts estimated at `136.99 million
• Disputed income tax demand of `43.82 million against which the Company has made advance payment
of `17.14 million.
• Disputed service tax demand of `1,290.78 million.
If any of these liabilities becomes due and payable, it could have an adverse impact on our financial condition.
Our Company has had negative cash flows from operations in a recent fiscal year
We had negative cash flow in the year ended March 31, 2012. For further details, please refer to
“Management’s Discussion on Financial Condition and Results of Operations”. There can be no assurance that
we will not experience negative cash flow from operations in future. Any decrease in cash flows could materially
and adversely affect our financial condition and operations by reducing the cash flow available to fund capital
expenditures, meet working capital requirements, pay dividends, pay outstanding indebtedness and service
interest and use funds for other general corporate purposes
This Placement Document contains certain financial data that have not been audited by our independent
accountants.
As a company whose shares are listed on the BSE and the NSE, we are required to prepare and make publicly
available abridged quarterly standalone income statement information. We announced this standalone income
statement for the six months ended September 30, 2014. This information has been reviewed by our independent
auditors, but has not been audited. In connection with this announcement, we also announced abridged
consolidated income statement information for the six months ended September 30, 2014. This abridged
consolidated income statement information has not been reviewed by our independent auditors and is based
solely on our Company’s internal management reports. As a result, the abridged consolidated income statement
information disclosed in the Placement Document for the six months ended September 30, 2014 may be different
if it were subjected to audit procedures. Therefore, you should not place undue reliance on this information.
We have has made capital investments in our Subsidiaries, and any failure in the performance, financial or
otherwise, of our Subsidiaries could have a material adverse effect on our reputation, business, prospects,
financial condition and results of operations.
We have made and continue to make capital investments in and other commitments to expand the business of
our Subsidiaries. As of September 30, 2014, our Company's total investment in subsidiaries was `1,321.86
45
million. These investments and commitments include capital contributions to enhance the financial condition or
liquidity position of these Subsidiaries. We may also make capital investments in the future, which may be
financed through additional debt, including through debt of our Subsidiaries. If the business and operations of
these Subsidiaries deteriorate, our investments may be required to be written down or written off. Additionally,
certain advances may not be repaid or may need to be restructured or we may be required to make further capital
outlays to support such companies.
The complexity of transfer pricing regulations across countries may result in substantial tax liabilities.
Each country’s transfer pricing regulations require that international transactions involving associated
enterprises be at an arm’s-length price. Transactions between our Company and our Subsidiaries in other
countries fall into this classification, at least for purposes of Indian tax laws and regulations. Accordingly, we
will determine the pricing among our associated enterprises on the basis of detailed functional and economic
analysis involving benchmarking against transactions with entities that are not under common control. If the
applicable income tax authorities, on review of our tax returns, determine that the transfer price we applied was
not appropriate, we may incur increased tax liability, including accrued interest and penalties. These penalties
could be substantial and have an adverse effect on our business. Moreover, tax authorities around the world are
being increasingly rigorous in their scrutiny of transactions and in the pursuit of tax recoveries which may lead to
an increased overall tax rate for us.
Our insurance coverage may not adequately protect us against certain operating hazards and this may have
an adverse effect on our business.
Travel and tourism services involve many risks that may adversely affect our operations, and the availability
of insurance is therefore fundamental to our operations. While we believe that our insurance coverage is
adequate for the travel and tourism business, there can be no assurance that any claim under the insurance
policies maintained by us will be honoured fully, in part or on time. We maintain insurance policies for our
material assets and business related risks. However, certain losses may arise due to assets being not economically
insurable. To the extent that we suffer any loss or damage that is not covered by insurance or exceeds our
insurance coverage or if insurance premiums significantly increase, our results of operations and cash flow could
be adversely affected. For details of our insurance cover, please refer to “Business — Insurance”.
Our Company is involved in a number of legal and regulatory proceedings that, if determined against the
Company, could have a material adverse impact on our Company.
Our Company and one of our associates are party to various legal proceedings. These legal proceedings are
pending at different levels of adjudication before various courts, tribunals, statutory and regulatory authorities,
and other judicial authorities, and if determined against us, could have an adverse impact on our business,
financial condition and results of operations. No assurance can be given as to whether these legal proceedings
will be decided in our favor or have an adverse outcome, nor can any assurance be given that no further liability
will arise out of these claims. Any adverse decision may have a significant impact on our business and
reputation, financial condition and results of operations.
There have been instances, in the past, wherein district courts in India have found us guilty of providing
deficient service and we have been made to pay damages for providing such deficient service. Damages awarded
by Indian Courts may vary and are unpredictable. If any of the current pending consumer disputes are resolved
against us and we are made liable to pay damages to the consumer, we may be required to restrict or modify our
operations. Since these proceedings allege deficiency in providing service, any adverse decision could affect our
reputation in the market.
Our joint venture with IRCTC has ceased operations and is the subject of legal proceedings.
Our Company received a notice from IRCTC in August 2011 for termination of the joint venture under the
name of "Royale Indian Rail Tours Limited" which was formed by the Company with IRCTC in December 2008
46
to operate a luxury train in India. The matter is currently pending before the Hon’ble Supreme Court of India for
adjudication. For further details please see the section titled "Outstanding Litigation". In case the dispute is not
adjudicated in favor of the Company it may lead to termination of the joint venture, loss of the investment made
the Company in the joint venture and loss of future earnings and profit. Our Company may also not be able to
recover the legal costs associated with the dispute.
Our business is subject to significant regulation and we may be adversely affected by changes to existing
regulation, the introduction new regulations and/or a failure to comply with any such regulation.
We are subject to significant regulation, which may limit our operational flexibility and/or involve material
cost. Non-compliance with the applicable regulations could lead to legal or regulatory sanctions, as well as
reputational damage. Our business, financial condition and results of operations could be adversely affected by
unfavorable changes in or interpretations of existing, or the promulgation of new laws, rules and regulations
applicable to us and our businesses, could decrease demand for products and services, increase costs and/or
subject us to additional liabilities.
Our success depends on our trademarks and proprietary rights and any failure to protect our intellectual
property rights may adversely affect our competitive position.
Our Company’s business might be affected due to our inability to protect our existing and future intellectual
property rights. We own various intellectual property rights, in particular, trademarks, which are fundamental to
our brand, which gives us a competitive advantage. We use our intellectual property rights to promote and
protect the goodwill of our brand, enhance our competitiveness and otherwise support our business goals and
objectives.
As of the date of the Placement Document, several of our marks are pending registration and renewals under
various classes of the Trademarks Act, 1999. Further, opposition cases have been filed with the Trademark
Registry against registering our mark as a trademark. Any delay or refusal to register these trademarks could
adversely affect our business. We cannot guarantee that all the pending applications will be decided in the favour
of our Company. If any of our trademarks are not registered it can allow any person to use a deceptively similar
mark and market its product which could be similar to the products offered by us. Such infringement will hamper
our business as prospective clients may go to such user of mark and our revenues may decrease.
Our key brands are registered in our name in most of markets in which we operate. However, our inability to
register any existing or new intellectual property can allow any person to use a deceptively similar mark and
market its product which could be similar to the products offered by us. Such infringement will hamper our
business as prospective clients may go to such user of the trademark and our revenues may decrease. Our
Company's business might be affected due to our inability to protect our existing and future intellectual property
rights.
We currently require several regulatory approvals or licenses in the ordinary course of business and the
failure to obtain them in a timely manner or at all may adversely affect our operations.
We currently require several approvals, licenses, registrations and permissions for operating our business,
some of which are due to expire and for which we have either made or are in the process of making an
application for obtaining the approval or its renewal. If we fail to obtain some or all of these approvals or
licenses, or renewals thereof, in a timely manner or at all, our operations could be affected. Furthermore, the
success of our strategy to expand our existing business and operations or acquire new business is contingent
upon, inter alia, receipt of all required licenses, permits and authorizations, including local permits. In the future,
we will be required to renew such permits and approvals and obtain new permits and approvals for our proposed
operations. While we believe that we will be able to renew or obtain such permits and approvals as and when
required, there can be no assurance that the relevant authorities will issue any of such permits or approvals in the
time-frame anticipated by us or at all. Failure to renew, maintain or obtain the required permits or approvals may
47
result in the interruption of our operations or delay in or prevent our expansion plans and may have a material
adverse effect on our business, financial condition and results of operations.
We operate on leased and licensed premises, and if we are unable to renew the leases and licenses, our
operations may be adversely affected, or there may be a disruption in our business activities, which may result
in a loss of profitability.
All the offices through which we operate our business in India are taken by us on lease through lease and
license agreements with third parties. We may in the future enter into further such arrangements with third
parties. Any adverse impact on the title, ownership rights and/or development rights of our landlords from whose
premises we operate, or breaches of the contractual terms of such leave and license agreements, may impede our
operations. In the event such leases or licenses are not renewed, or there is any disruption in our business
activities due to deficiency of title, our operations and in turn profitability will be adversely impacted.
Certain material agreements relating to our operations do not have provisions for arbitration.
Certain material agreements relating to our operations, including our services arrangements with strategic
partners, do not have provisions for arbitration. Thus enforcement of these agreements can be done only in a
court of law. Any delay in the enforcement of these agreements may result in disruption of our business activities
and operations and in turn may adversely impact our profitability.
Our Promoters and our Promoter Group entities have equity interests in affiliated companies that offer
services that are related to our Business, which may create conflicts of interest.
Our promoters and our promoter group entities have equity interests in other companies that offer services that
are related to our business, such as Ezeego One Travels & Tour Limited (Ezeego), Forever Travel Distribution
Private Limited (Forever) and Far Pavilions Tours and Travels Private Limited (Far Pavilions). Ezeego and
Forever are in the business of online ticketing and selling travel products and Far Pavilions is in charter business.
There may be conflicts of interest in addressing business opportunities and strategies in circumstances where
our interests differ from other companies in which one or more of our promoters or our promoter group has an
interest. None of our promoters or our promoter group has undertaken to refrain from competing with our
business or obligated to direct any opportunities in the tour and travel industry to us. There could be possibilities
where new business opportunities which could be available to us may be directed to these affiliated companies
instead. Our promoters and our promoter group may also confine us from entering into certain businesses related
to our own, which may be important for our growth in the future, as they may already have interests in other
similar businesses.
We have in the past entered into related party transactions and may continue to do so in the future.
We have, in the course of our business entered into transactions with related parties that include entities
forming part of our Promoter Group. For details, please see “Related Party Transactions” in Schedule 13 of our
financial statements.
While we believe that all such transactions have been conducted on an arms-length basis and under normal
commercial terms, there can be no assurance that we could not have achieved more favorable terms had such
transactions not been entered into with related parties. Furthermore, it is likely that we will continue to enter into
related party transactions in the future. There can be no assurance that such transactions, individually or in the
aggregate, will not have an adverse effect on our financial condition and results of operations.
The Promoters, Promoter Group and key investors will hold a majority or significant equity stake of our
equity shares after the issue and can therefore determine the outcome of shareholder voting and influence our
operations.
48
As of September 30, 2014, our Promoters and Promoter Group held 8,12,44,281 Equity Shares of our
Company constituting 59.51% of the total pre-Issue paid-up share capital of our Company. After the completion
of this Issue, our Promoters and Promoter Group will collectively hold significant portion of the Company.
Furthermore, members of our Promoter Group may subscribe to a preferential issue of warrant to prevent their
shareholding from being significantly diluted as a result of this offering. Our Promoters and Promoter Group will
therefore will be able to exercise a significant degree of influence over us and will be able to control the outcome
of any proposal that can be passed with a majority shareholder vote. In addition, the Promoters have the ability to
block any resolution by our shareholders, including amendments of the Articles of Association, issuance of
additional shares of capital stock, commencement of any new line of business, and similar significant matters.
The Promoters will be able to control or influence most matters affecting us, including the appointment and
removal of officers, our business strategies and policies, dividend payouts, capital structure and financing, and
delay or prevent a change in control, impede a merger, consolidation, takeover or other business combination
involving us, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain
control of us even if such action were in the best interests of the shareholders as a whole. In addition, The
Rohatyn Group has made a significant investment in our subsidiary (i.e. Prometheon Holding (UK) Limited, the
holding company of Holidaybreak) that provides them with a degree of control over its operations.
The Promoters and key investors, such as The Rohatyn Group, may also continue to have the ability to cause
us to take actions that are not in, or may conflict with, our interests and or the interests of our minority
shareholders, and there can be no assurance that such actions will not have an adverse effect on our future
financial performance and the price of our equity shares.
We are subject to operating risks applicable to the travel and tourism industry.
We are exposed to many types of operational risk, including increases in operating expenses, such as salaries
and staff costs, insurance and taxes, increases in hotel room rates and air fares, transportation and fuel costs for
sustained periods in India and internationally. Our inability to manage costs could adversely impact our operating
margins. Increases in transportation and fuel costs for sustained periods in India and internationally (affecting
inbound travel from abroad) could also unfavorably impact future results. Similarly, we are dependent on our IT
information systems and electronic reservation system. Any disruption in these systems could result in the loss of
important data, increasing our expenses and generally harm our business.
The travel and tours industry is cyclical and sensitive to changes in the economy and this could have a
significant impact on our operations and financial results.
The travel and tours industry is cyclical and sensitive to changes in the economy in general. The sector may be
unfavorably affected by such factors as changes in the global and domestic economies, changes in local market
conditions. If the economic growth of India or other countries that we operate in slows down there may be a
gradual decline in the willingness for people to travel.
A global or domestic recession may severely impact the tour and travel industry and consequently our
business. Such adverse developments in the tour and travel industry in India or in the countries where our
subsidiaries are located or where we have our agents, branches and representative offices, will have a negative
impact on our profitability and financial condition.
Our business may be severely impacted by continued market volatility. Further and/or sustained deterioration
in the global economy could result in a significant decrease in demand for holidays and/or air travel as customers
may be inclined to adopt cost-saving measures.
Disruptions in the travel industry, such as those caused by terrorism, war, inclement weather, health
concerns, bankruptcies and/or general economic downturns, could adversely affect our business, financial
condition and results of operations.
49
Our business, financial condition and results of operations are affected by the health of the worldwide travel
industry. Accordingly, downturns or weaknesses in the travel industry could adversely affect our business.
Travel expenditures are sensitive to business and personal discretionary spending levels and tend to decline
during general economic downturns. Events or weakness in the travel industry that could negatively affect our
business include price escalation in the airline industry or other travel-related industries, airline or other travel-
related strikes, airline bankruptcies, liquidations or consolidations and fuel price escalation. Additionally, our
business is sensitive to safety concerns, and thus our business may decline after incidents of terrorism, during
periods of political instability or geopolitical conflict in which travelers become concerned about safety issues, as
a result of inclement weather such as hurricanes or when travel might involve health-related risks, such as avian
flu. Such concerns could result in a protracted decrease in demand for our travel services.
The occurrence of swine flu, SARS disease, bird flu epidemic and mad cow disease saw a drop in the number
of tourist arrivals in the affected countries. The suspension of flights as a precautionary measure also impacts the
numbers of tourists coming into the country. We have experienced cancellations of the tour bookings in light of
such epidemics. Though we have in the past managed to control the losses by directing the tours to other
countries, we may in the future not be able to control the losses due to cancellations on account of such
epidemics. Also we may have to adopt low- price promotion policies, which may affect our profitability.
Moreover, the travel and tourism industry has been affected by the closure of much of Northern Europe’s
airspace in April 2010 caused by volcanic dust in the atmosphere. Any similar prolonged closure of European
airspace could have a material adverse impact on our operations, resulting increased costs, consisting largely of
stranded passengers’ accommodation and repatriation, as well as the impact of holiday cancellations.
Airlines and package holiday providers are also exposed to the risk of losses from political instability,
accidents, terrorist attacks, acts of sabotage and natural catastrophes, climate change, outbreaks of diseases,
epidemics, social unrest, civil war, international conflicts and failing governments, which could be of a
magnitude that would threaten their economic viability. We operate in 23 markets, where our operations will be
at risk of both domestic and international geopolitical events impacting business performance as such events
could directly affect customers’ propensity to travel. This may lead to a reduction in consumer spending on
holidays and leisure travel products, which could adversely impact on our financial performance. In addition, the
disruption of the existing travel plans of a significant number of travelers upon the occurrence of certain events,
such as terrorist activity or war, could result in the incurrence of significant additional costs if we provide relief
to affected travelers by not charging cancellation fees or by refunding the price of airline tickets, hotel
reservations and other travel products and services.
This decrease in demand, depending on its scope and duration, together with any future issues affecting travel
safety, could significantly and adversely affect our business, results of operations and financial condition over
the short and long-term.
Regional conflicts in the Indian sub-continent could adversely affect the Indian economy and cause our
business to suffer.
The Indian sub-continent has from time to time experienced instances of civil unrest and hostilities among
neighbouring countries. Events of this nature in the future, as well as social and civil unrest within other
countries, could influence the Indian economy and could have a material adverse effect on the inbound and
outbound tourism and on our business.
Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could
adversely affect the financial markets and our business.
Terrorist attacks and other acts of violence or war may cause a drop in the number of arrivals into the country.
Countries have been known to regulate the number of arrivals after such attacks. After the September 11, 2001
attacks, the US government has passed stringent regulations governing the inflow of arrivals in the United States.
50
Such attacks affect the tour and travel industry directly including people becoming averse to travelling to
locations where such terrorist attacks are prevalent. A material portion of our revenues are generated from
ground handling. If the number of tourist arrivals were to decrease as a result of terrorist attacks in India, it will
negatively impact our revenues. Terrorist attacks and civil unrest may also have an adverse effect on Indian stock
markets on which our equity shares will be traded. These acts may also result in a loss of business confidence,
make travel and other services more difficult and may ultimately adversely affect our business.
India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as
other adverse social, economic and political events in India could have a negative impact on us. Such incidents
could also create a greater perception that investment in Indian companies involves a higher degree of risk and
could have an adverse impact on our business and the price of our equity shares.
Any downgrading of India’s sovereign rating by an international rating agency could have a negative impact
on our business.
Any adverse revisions to India’s sovereign credit ratings for domestic and international debt by international
rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other
commercial terms at which such additional financing is available. This could have a material adverse effect on
our business and financial performance, our ability to obtain financing for capital expenditures and the price of
our Equity Shares.
We may be exposed to risks associated with the limitation of greenhouse gas emissions and related trading
schemes for allowances.
Under the United Nations Framework Convention on Climate Change, 1992 and the Kyoto Protocol, 1998,
certain contracting states entered into obligations to control and reduce emission of greenhouse gases. To comply
with its obligations under public international law, the European Union introduced a scheme in 2003 (the "2003
Scheme") for greenhouse gas emission allowance trading for the cost-effective reduction of such emissions. The
2003 Scheme enables the European Union and its member states to meet the commitments to reduce greenhouse
gas emissions made in the context of the Kyoto Protocol, 1998. The aviation industry has been included in the
2003 Scheme from January 1, 2012. Consequently companies operating aircraft routes within, to or from the
European Union are required to curb their carbon dioxide emissions and account for those emissions by
surrendering allowances. This move has triggered opposition from various airline operators and many countries,
including India.
The long-term effects of this trading scheme for us are not foreseeable with any degree of certainty but it may
lead to a decrease in demand for air travel and/or reduce our profit margin on airline tickets. Moreover, further
regulations on greenhouse gas emissions might be enacted in one or more of our markets. All of these factors
may limit operational flexibility, increase costs and therefore may have a material adverse effect on our financial
position.
Investors may have difficulty enforcing judgements against us or our management
We are a limited liability company incorporated under the laws of India. Most of our Directors and executive
officers are residents of India. As a result, it may not be possible for investors to effect service of process upon us
or such persons in jurisdictions outside India or to enforce judgements obtained against us or such persons
outside India. For more information please see the section titled "Enforcement of Civil Liabilities".
Indian dividend taxes or surcharges could negatively affect our tax liability.
Under current Indian laws, no tax is payable by the recipients of dividends on shares of an Indian company.
However, if we declare/distribute a dividend, we are required to pay a dividend distribution tax at a rate of
16.2225% (including a surcharge of 5% and education cess and higher education cess of 3% on tax and
surcharge) on the dividend so declared or distributed. The Finance Act (No 2), 2014 has with effect from October
51
1, 2014 amended the provisions of Section 115-O of the Income Tax Act to provide that tax on dividends to be
distributed by domestic companies is to be computed on the grossed up amount of dividend by the rate of tax on
such dividend, instead of the net amount paid. The Government may in the future increase the surcharges and
dividend distribution taxes it imposes. Any future increase in dividend distribution taxes or surcharges could
adversely affect our tax liability.
Significant differences exist between Indian GAAP and other accounting principles with which investors may
be more familiar.
Our financial statements are prepared in conformity with Indian GAAP, consistently applied during the
periods stated and no attempt has been made to reconcile any of the information given in this Placement
Document to any other principles or to base it on any other standards. Indian GAAP and Indian auditing
standards may differ from accounting principles and auditing standards with which prospective investors may be
familiar in other countries. Significant differences exist between Indian GAAP and IFRS which may be material
to the financial information contained in this Placement Document. We have made no attempt to quantify the
effect of any of these differences and Indian GAAP does not require such quantification. In making an
investment decision, investors must rely upon their own examination of us, the terms of the Issue and the
financial information contained in this Placement Document.
Risks associated with investing in an Indian company
Public companies in India, including our Company, may be required to prepare financial statements under
new Indian Accounting Standards and any failure by if Company to adopt the new Accounting Standards in
the preparation of our financial statements may have a material adverse effect on our results of operations or
financial condition.
The Ministry of Corporate Affairs has notified the Indian Accounting Standards (Ind AS) which are a set of
new accounting standards which converge with the IFRS. The implementation of Ind AS will be done in a
phased manner and the roadmap for implementation will be notified by the Ministry of Corporate Affairs,
Government of India. Public companies in India, including our Company, may be required to prepare annual and
interim financial statements under Ind AS. It is unclear at present to what extent Ind AS will impact the financial
statements of the Indian companies and when Indian companies will be required to prepare their financial
statements on such basis.
If we are required to make a transition from the current accounting practices to new accounting standards,
such as Ind AS, we may encounter difficulties in the on-going process of implementing and enhancing our
management information systems. There can be no assurance that our adoption of any new accounting standards
will not adversely affect our business, profitability, financial conditions and the results of our operations.
Central and State Governments in India have introduced various schemes and initiatives to boost tourism.
Any withdrawal or adverse changes to such schemes and initiatives may adversely affect our business.
The Central and State Governments in India are actively promoting India as a tourist destination through their
campaign called "Incredible India". This has provided a major boost to the Indian tourism sector. Any decision
by the Government to withdraw these promotional activities and campaigns can have an adverse impact on the
growth of the sector.
Our business and activities will be regulated by the Competition Act, 2002.
The Parliament has enacted the Competition Act, 2002 (the "Competition Act") for the purpose of preventing
practices that have or are likely to have an adverse effect on competition in India. Under the Competition Act,
any arrangement, understanding or action whether formal or informal which causes or is likely to cause an
appreciable adverse effect on competition is void and attracts substantial penalties. Any agreement, which,
among other things, directly or indirectly determines purchase or sale prices, limits or controls production,
52
supply or distribution of goods and services, shares the market or source of production by way of geographical
area or number of customers in the market or where parties indulge in bid rigging is presumed to have an
appreciable adverse effect on competition. The Competition Act also regulates combinations (i.e. acquisitions,
acquiring of control, mergers or amalgamations). Provisions of the Competition Act relating to acquisitions,
mergers or amalgamations of enterprises that meet certain asset or turnover thresholds and regulations issued by
the Competition Commission of India with respect to notification requirements for such combinations became
effective in June 2011. Further acquisitions, mergers or amalgamations by us in India may require the prior
approval of the Competition Commission of India, which may not be obtained in a timely manner or at all.
The Competition Commission of India has been already acted to restrain the abuse of dominant position in a
few industries. However it is as yet unclear at present as to how the Competition Act will affect the travel and
tourism industry in India. If we are affected, directly or indirectly, by any provision of the Competition Act, or its
application or interpretation, including any enforcement proceedings initiated by the Competition Commission of
India and any adverse publicity that may be generated due to scrutiny or prosecution by the Competition
Commission of India, it may have a material adverse effect on our business, profitability, financial conditions
and the results of our operations.
The ability of Indian companies to invest in companies located outside India depends on the approval of the
RBI.
Foreign exchange laws in India presently permit Indian companies to acquire or invest in foreign companies
without any prior governmental approval up to an aggregate amount not exceeding 400% of the net worth of the
Indian company as of the date of its most recent audited balance sheet. Acquisitions in excess of the 400% net
worth threshold require prior RBI approval. The requirement to obtain approvals for acquisitions of companies
located outside India in the future from the RBI may restrict our international growth, which could adversely
affect our business, profitability, financial conditions and the results of our operations.
Foreign investors are subject to foreign investment restrictions under Indian law that limit our ability to
attract foreign investors, which may adversely impact the market price of the Equity Shares.
Under the foreign exchange regulations currently in force in India, transfer of shares between non-residents
and residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines and
reporting requirements specified by the RBI. If the transfer of shares is not in compliance with such pricing
guidelines or reporting requirements or fall under any of the exceptions referred to above, then the prior approval
of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of
shares in India into foreign currency and repatriate that foreign currency from India will require a no objection/
tax clearance certificate from the income tax authority. There can be no assurance that any approval required
from the RBI or any other government agency can be obtained on any particular terms or at all.
The ability of Indian companies to raise foreign capital may be constrained by Indian law.
Our Company is subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory
restrictions limit our financing sources for our Company’s projects under development and hence could constrain
our ability to obtain financings on competitive terms and refinance existing indebtedness. In addition, our
Company cannot assure you that the required approvals will be granted to our Company without any conditions,
or at all. Any limitations on our Company’s ability to raise foreign debt may have an adverse impact on our
business, profitability, financial conditions and the results of our operations.
Risks associated with the Equity Shares
There may not be an active or liquid market for the Equity Shares, which may cause the price of the Equity
Shares to fall and may limit investors’ ability to sell the Equity Shares.
53
The price at which the Equity Shares will trade after this Issue will be determined by the stock market and
may be influenced by many factors, including:
our Company’s financial results and the financial results of the companies in the businesses its operates in;
the history of, and the prospects for, our Company’s business and the sectors and industries in which it
competes;
the valuation of publicly traded companies that are engaged in business activities similar to our Company’s;
and
significant developments in India’s economic liberalisation and deregulation policies.
In addition, the Indian stock market has from time to time experienced significant price and volume
fluctuations that have affected the market prices for the securities of Indian companies. As a result, investors in
the Securities may experience a decrease in the value of the Securities regardless of the Company’s operating
performance or prospects.
Future issues or sales of Equity Shares by our Company may significantly affect the trading price of the
Equity Shares.
A future issue of Equity Shares by our Company or a sale by any of its significant shareholders, or the
perception that such issues or sales may occur, may significantly affect the trading price of the Equity Shares of
our Company. Investors in the Securities will experience dilution upon the issue and allotment of additional
Equity Shares. Other than (i) the agreements which our Company’s shareholders will execute restricting their
ability to offer, pledge, sell, contract to sell, purchase any option or contract to sell, grant or sell any option, right,
contract or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of any Equity Shares
for a certain period of time as a result of this Issue, or (ii) any regulatory consent that may be required under
applicable law, there are no restrictions on our Company’s ability to issue further Equity Shares, including any
securities to the Promoters, and there can be no assurance that our Company will not issue further Equity Shares
in the future. The issue or sale of a large number of our Company’s Equity Shares by it or any of its significant
shareholders, or the perception that such issues or sales may occur, could adversely affect the market price of the
Securities.
The Securities are subject to transfer restrictions.
The Securities are being offered under transactions not required to be registered under the Securities Act.
Therefore, the Securities may be transferred or resold only in a transaction registered under or exempted from the
registration requirements of the Securities Act and in compliance with all other applicable securities laws in the
jurisdictions where the Securities are being sold.
Pursuant to the SEBI Regulations, for a period of 12 months from the date of the issue of the Securities, QIBs
purchasing the Securities may only sell them on the Stock Exchanges and may not enter into any off-market
trading in respect of these Securities. This may affect the liquidity of the Securities purchased by investors and it
is uncertain whether these restrictions will adversely impact the market price of the Securities purchased by
Investors.
Investors may be subject to Indian taxes arising out of capital gains.
Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian
company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange
held for more than 12 months will not be subject to capital gains tax in India if securities transaction tax (STT)
has been paid on the transaction. STT will be levied on and collected by the Stock Exchanges on which the
Equity Shares are sold. Any gain realised on the sale of Equity Shares in an Indian company held for more than
12 months which are sold other than on a recognised stock exchange and on which no STT has been paid, will be
subject to long term capital gains tax in India. Any gain realised on the sale of listed equity shares held for a
period of twelve (12) months or less will be subject to short term capital gains tax in India. Further, Indian tax on
54
capital gains may be relieved under certain tax treaties. For further information, please refer to the section titled
"Taxation".
There is no guarantee that the Securities proposed to be issued will be listed on the BSE and the NSE in a
timely manner or at all.
In accordance with Indian law and practice, final approval for the listing of the Securities in the Issue will not
be granted until after the Securities have been issued and allotted. Approval will require all other relevant
documents authorising the issuing of Securities to be submitted to the Stock Exchanges. There could be a failure
or a delay in listing the Securities on the BSE and the NSE. Any failure or delay in obtaining the approval would
restrict investors’ ability to trade in Securities on the Stock Exchanges.
Any trading closures at the Stock Exchanges may adversely affect the trading price of the Securities.
The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other
participants differ, in some cases significantly, from those in certain other securities markets. The Stock
Exchanges have in the past experienced problems, including temporary exchange closures, broker defaults,
settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the
market price and liquidity of the securities of Indian companies, including the Securities, in both domestic and
international markets. A closure of, or trading stoppage on, any of the Stock Exchanges could adversely affect
the trading price of the Securities.
Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.
Our Company’s corporate affairs are governed by its constitutional documents, regulation by its Board of
Directors and provisions of Indian law govern our Company’s corporate affairs. Legal principles relating to these
matters and the validity of corporate procedures, Directors’ fiduciary duties and liabilities and shareholders’
rights may differ from those that would apply to a company in another jurisdiction. Shareholders’ rights under
Indian law may not be as extensive as shareholders’ rights under the laws of other countries or jurisdictions.
Investors may have more difficulty in asserting their rights as a shareholder than as a shareholder of a
corporation in another jurisdiction.
There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a
shareholder's ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
We are subject to a daily circuit breaker imposed by all stock exchanges in India which does not allow
transactions beyond certain volatility in the price of the Equity Shares. This circuit breaker operates
independently of the index-based market-wide circuit breakers generally imposed by the SEBI on Indian stock
exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical
volatility in the price and trading volume of the Equity Shares.
The stock exchanges do not inform us of the percentage limit of the circuit breaker from time to time, and may
change it without our knowledge. This circuit breaker effectively limits the upward and downward movements in
the price of the Equity Shares. As a result of this circuit breaker, there can be no assurance regarding the ability
of shareholders to sell the Equity Shares or the price at which shareholders may be able to sell their Equity
Shares.
There may be less information available about companies listed on Indian securities markets as compared to
the information available about companies listed on securities markets in other countries.
There is a difference between the level of regulation, disclosure and monitoring of the Indian securities
markets and the activities of investors, brokers and other participants and that of markets in the United States and
55
other more developed economies. For example, we are not required to and do not publish consolidated financial
information other than on an annual basis at the end of each fiscal year. The SEBI is responsible for ensuring and
improving disclosure and other regulatory standards for the Indian securities markets. Under the terms of the
listing agreement which every listed company enters into with the relevant stock exchange, certain information
needs to be disclosed to the stock exchange which is then made available to the general public. Though, the SEBI
has issued regulations and guidelines on disclosure requirements, insider trading and other matters, there may be
less publicly available information about Indian public companies, including us, than is regularly disclosed by
public companies in other countries with more mature securities markets. As a result you may have access to less
information about our business, results of operations and financial conditions, and those of our competitors that
are listed on the Indian Stock Exchanges and other stock exchanges in India, on an on-going basis than you may
have in the case of companies subject to reporting requirements of other countries.
56
USE OF PROCEEDS
The net proceeds from the issue and sale of up to 32,787,000 Equity Shares by our Company as described in this
Placement Document are estimated to be up to approximately ` 9,809.58 million (Net Proceeds).
Subject to compliance with applicable laws and regulations, we intend to use the Net Proceeds for pre-payment /
repayment of debt general corporate purposes and for or such other purpose as the Board may decide.
In accordance with the policies approved by the Board and as permissible under applicable laws and government
policies, our management will have flexibility in deploying the Net Proceeds. Pending utilization for the
purposes described above, we intend to temporarily invest funds in creditworthy instruments, including money
market Mutual Funds and deposits with banks and any corporate deposits. Such investments would be in
accordance with the investment policies as approved by the Board from time to time and all applicable laws and
regulations.
57
CAPITALISATION AND INDEBTEDNESS
The following table shows, as of March 31, 2014:
our Company's actual capitalisation and indebtedness on a consolidated basis; and
our Company's capitalisation on a consolidated basis as adjusted for the Issue.
As of March 31, 2014 (in ` million)
Actual As adjusted for the Issue (1)
Shareholder's funds
Share Capital 682.6 846.6
Securities Premium 7,382.4 17,028.0 (2)
Minority interest 8,205.4 8,205.4
Reserve and Surplus (excluding Securities Premium) 9,484.1 9,484.1
Total Shareholder's funds 25,754.5 35,564.1
Loan funds
Secured loans 53,659.3 53,659.3
Unsecured loans 2,176.6 2,176.6
Total debt 55,835.9 55,835.9
Total Capitalisation 81,590.4 91,400.0
(1)
As adjusted for the number of Equity Shares issued. (2)
The Securities Premium is net of the estimated Issue expenses of ₹ 190.46 million
This table should be read in conjunction with our financial statements and the related notes, "Management
Discussion and Analysis of Financial Conditions and Results of Operations" and other financial information
contained in "Financial Information" in this Placement Document.
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CAPITAL STRUCTURE
i) The authorised, issued, subscribed and paid up capital (number of securities, description and aggregate
nominal value):
Particulars ` in million
Authorised Capital
(220,000,000 Equity Shares of `5 each)
1,100.0
Issued Capital before the Issue
(136,527,890 Equity Shares of `5 each)
682.6
Subscribed and Paid Up Capital before the Issue
(136,527,890 Equity Shares of `5 each)
682.6
Present Issue in terms of this Placement Document
( 32,787,000 Equity Shares of ` 5 each)
163.9
Subscribed and Paid-Up Capital after the Issue
(169,314,890 Equity Shares of ` 5 each)
846.6
Securities Premium Account
Before the Issue
After the Issue(1)
7,382.4
17028.0
(1) The Securities Premium is net of the estimated Issue expenses of ₹ 190.46 million
ii) The history of the Equity Share capital of our Company is provided in the following table:
S.
No
.
Date of Allotment
of fully Paid-up
Shares
Number
of
Equity
Shares
Allotted
Face
Value
(`)
Issue
Price
(`)
Nature
of Allot-
ment
Nature of
Conside-
ration
Cumulative
Number of
Shares Allotted
Cumulative
Paid Up Share
Capital (`)
1 June 9, 1939 1,000 10 10 Fresh Cash 1,000 10,000
2 July 27, 1939 500 10 10 Fresh Cash 1,500 15,000
3 October 27, 1980 98,500 10 10 Fresh Cash and
consideration
other than
cash
100,000 1,000,000
59
4 December 28, 1982 5,000 10 10 Fresh Cash 105,000 1,050,000
5 May 31, 1983 5,000 10 10 Fresh Cash 110,000 1,100,000
6 July 1, 1983 15,000 10 10 Fresh Cash 125,000 1,250,000
7 August 10, 1983 5,000 10 10 Fresh Cash 130,000 1,300,000
8 November 26, 1983 20,000 10 10 Fresh Cash 150,000 1,500,000
9 May 2, 1985 50,000 10 10 Fresh Cash 200,000 2,000,000
10 March 31, 1990 200,000 10 10 Right
Issuei
Cash 400,000 4,000,000
11 August 1, 1996 194,750 10 50 Right
Issueii
Cash 594,750 5,947,500
12 March 31, 1997 5,250 10 50 Right
Issueii
Cash 600,000 6,000,000
13 November 5, 1998 200,000 10 60 Right
Issueiii
Cash 800,000 8,000,000
14 September 19, 2000 40,000 10 10 Fresh
Issue
Cash 840,000 8,400,000
15 June 20, 2003 60,000 10 200 Fresh
Issue
Consideratio
n other than
cash
900,000 9,000,000
16 June 2, 2005 4,540,00
0
10 50 Right
Issueiv
Cash 5,440,000 54,400,000
17 September 1, 2007 1,041,31
5
10 394 Fresh
Issue
Consideratio
n other than
cash
6,481,315 64,813,150
18 October 15, 2007 19,443,9
45
10 Nil Bonus
Issue #
Nil 25,925,260 259,252,600
19 October 15, 2007 2,000,00
0
10 10 Fresh
Issue
Cash 27,925,260 279,252,600
20 July 23, 2009 19,547,6
82
10 10 Right
Issuev
Cash 47,472,942 474,729,420
21. December 3,
2009
15,450,0
00
10 530 Initial
Public
Offering
Cash 62,922,942 629,229,420
22 August 16,
2010
53,41,00
3
10 569.1
7
Global
Deposito
ry
Receipt
Cash 68,263,945 682,639,450
60
23 June 7, 2011 - - - Stock
Split##
- 136,527,890 682,639,450
Notes:
# The Company, on October 15, 2007, issued bonus shares to its eligible members as per the Companies Act,
1956, in the ratio of Three Equity Share for every One Equity Shares held by members and such new shares were
fully paid and ranked pari passu with the existing equity shares. A total of 19,443,945 Equity Shares were issued.
## The shareholders of the Company by a resolution of June 7, 2011 through postal ballot approved the sub-
division of the nominal value of the equity share capital from `10 each paid per equity shares into two equity
shares of `5 each paid up.
i. The Company, on March 31, 1990, issued shares for cash at par on right basis to its eligible members as per
the Companies Act,1956, in the ratio of One Equity Share for every One Equity Shares held by members and
such new shares were fully paid and ranked pari passu with the existing equity shares. A total of 200,000 Equity
Shares were issued.
ii. The Company, on August 1, 1996, issued shares for cash at par on right basis to its eligible members as per
the Companies Act,1956, in the ratio of One Equity Share for every Two Equity Shares held by members and
such new shares were fully paid and ranked pari passu with the existing equity shares. A total of 200,000 Equity
Shares were issued.
iii. The Company, on November 5, 1998, issued shares for cash at par on right basis to its eligible members as
per the Companies Act,1956, in the ratio of One Equity Share for every Three Equity Shares held by members
and such new shares were fully paid and ranked pari passu with the existing equity shares. A total of 200,000
Equity Shares were issued.
iv. The Company, on June 2, 2005, issued shares for cash at par on right basis to its eligible members as per the
Companies Act,1956, in the ratio of Six Equity Share for every One Equity Shares held by members and such
new shares were fully paid and ranked pari passu with the existing equity shares. A total of 4,540,000 Equity
Shares were issued.
v. The Company, on July 23, 2009, issued shares for cash at par on right basis to its eligible members as per the
Companies Act, 1956, in the ratio of Seven Equity Share for every Ten Equity Shares held by members and such
new shares were fully paid and ranked pari passu with the existing equity shares. A total of 19,547,682 Equity
Shares were issued.
Preferential issue
The Board has pursuant to its resolution dated November 20, 2014, subject to the approval of the shareholders of
our Company, approved issuance of up to 72,50,000 warrants convertible into 72,50,000 Equity Shares to
Standford Trading Private Limited, a promoter group entity of our Company, at a price to be determined in
accordance with Chapter VII of the SEBI Regulations. The price of such warrants shall not be less than the Issue
Price.
61
MARKET PRICE INFORMATION
The Equity Shares are listed on the BSE and NSE. The closing price of the Equity Shares on the BSE as of
November 24, 2014 was ` 307.60 and on the NSE as of November 24, 2014 was ` 307.55.
The tables set forth below provide certain stock market data for the BSE and the NSE and is for the periods that
indicate the high and low closing prices of the Equity Shares and also the volume of trading activity.
1. The high, low and average market prices of the Equity Shares during the preceding three calendar year
periods:
BSE
Period High
(`)
Date of
High
No. of
Equity
Shares
Traded
on Date
of High
Total
Volume
of Equity
Shares
Traded
on Date
of High
(` in
million)
Low
(`)
Date
of
Low
No. of
Equity
Shares
Traded
on Date
of Low
Total
Volume
of Equity
Shares
Traded
on Date
of Low
(` in
million)
Average
Price for
the
Period*
(`)
Equity Shares Traded
in the Periods
Volume Value (`
in
million)
2011# 277 04-Jan-
11
25,266 6.93 152.65 30-
Dec-
11
18,647 2.91 204.65 262,77,151 5,533.80
2012 207.10 13-Jan-
12
7,18,675 143.34 119.00 15-
Jun-
12
2,06,193 25.51 148.07 292,24,641 4,537.95
2013 147.05 12-Mar-
13
2,54,138 35.95 84.50 30-
Aug-
13
77,071 6.96 113.29 217,80,860 2,499.11
____ (Source: www.bseindia.com)
Note: In the event the high or low price of the Equity Shares are the same on more than one day, the day on which there has been higher
volume of trading has been considered for the purposes of this section. * Average of the daily closing prices. # The prices of the shares have been adjusted for a 1:2 split done during the year.
NSE
Period High
(`)
Date
of
High
No. of
Equity
Shares
Traded
on Date
of High
Total
Volume
of
Equity
Shares
Traded
on Date
of High
(` in
million)
Low
(`)
Date of
Low
No. of
Equity
Shares
Traded
on Date
of Low
Total
Volume
of
Equity
Shares
Traded
on Date
of Low
(` in
million)
Average
Price
for the
Period *(`)
Equity Shares traded in
the Periods
Volume Value (`
in
million)
2011# 277.5 05-
Jan-11
43,364 11.85 152.60 29-
Dec-11
63,527 9.89 204.55 769,71,705 16,117.96
2012 207.30 13-
Jan-12
15,83,846 315.03 119.05 14-Jun-
12
3,90,565 47.58 148.03 866,98,022 13,397.91
2013 146.40 12-
Mar-
13
4,60,317 64.87 84.65 29-Oct-
13
3,59,810 31.46 113.26 692,69,991 7,832.40
____
(Source: www.nseindia.com)
62
Note: In the event the high or low price of the Equity Shares are the same on more than one day, the day on which there has been higher
volume of trading has been considered for the purposes of this section. * Average of the daily closing prices # The prices of the shares have been adjusted for a 1:2 split done during the year.
2. Monthly high and low prices of the Equity Shares for the six months preceding the date of filing of the
Placement Document:
BSE
Months High (`) Date of
High
No. of
Equity
Shares
Traded
on Date of
High
Total
Volume of
Equity
Shares
Traded on
Date of
High (` in
million)
Low (`) Date of
Low
No. of
Equity
Shares
Traded on
Date of
Low
Total
Volume of
Equity
Shares
Traded on
Date of
Low (` in
million)
Average
Price
for the
Month*
(`)
Equity Shares traded
in the Month
Volume Value (`
in
million)
May-14 184.35
30-
May-
14
1,84,640
32.23 145.25
07-
May-
14
32,017
4.71 160.96
29,89,773
496.66
Jun-14 222.65
12-
Jun-
14
2,63,628
57.36 159.25
02-
Jun-
14
12,29,149
223.94 203.73
41,94,176
827.40
Jul-14 278.35
31-
Jul-14
86,957
23.60 213.15
01-
Jul-
14
3,82,074
83.04 251.73
44,00,736
1,105.99
Aug-14 310.05
28-
Aug-
14
1,50,304
45.70 254.35
13-
Aug-
14
49,693
13.08 278.36
28,29,842
805.76
Sep-14 366.30
16-
Sep-
14
8,09,352
275.70 263.30
25-
Sep-
14
99,192
27.42 306.00
28,92,422
921.84
Oct-14 331.00
9-
Oct-
14 191,089 62.11 277.05
30-
Oct-
14 189,104 53.16 294.92 1,883,416 563.13
_____
(Source: www.bseindia.com)
Note: In the event the high or low price of the Equity Shares are the same on more than one day, the day on which there has been higher volume of trading has been considered for the purposes of this section.
* Average of the daily closing prices.
NSE
Months High (`) Date of
High
No. of
Equity
Shares
Traded on
Date of
High
Total
Volume
of Equity
Shares
Traded
on Date
of High
(` in
million)
Low (`) Date of
Low
No. of
Equity
Shares
Traded on
Date of
Low
Total
Volume
of Equity
Shares
Traded
on Date
of Low (`
in
million)
Average
Price
for the
Month*
(`)
Equity Shares traded in
the Month
Volume Value (`
in
million)
May-14 184.30
30-
May-14
8,32,632
145.01 145.00
07-May-
14
2,40,954
35.31 161.01
122,82,176
2,044.71
Jun-14 222.60
12-Jun-
14
9,30,577
202.85 158.15
02-Jun-
14
38,32,344
700.89 203.50
152,14,479
3,012.13
Jul-14 278.40
31-Jul-
14
6,13,368
166.17 213.40
01-Jul-
14
10,60,707
231.43 251.75
174,90,824
4,382.89
Aug-14 309.80
28-Aug-
14
7,94,562
241.23 254.25
08-Aug-
14
4,45,555
114.85 278.61
125,29,305
3,579.81
63
Months High (`) Date of
High
No. of
Equity
Shares
Traded on
Date of
High
Total
Volume
of Equity
Shares
Traded
on Date
of High
(` in
million)
Low (`) Date of
Low
No. of
Equity
Shares
Traded on
Date of
Low
Total
Volume
of Equity
Shares
Traded
on Date
of Low (`
in
million)
Average
Price
for the
Month*
(`)
Equity Shares traded in
the Month
Volume Value (`
in
million)
Sep-14 367.95
16-Sep-
14
40,11,158
1,365.29 262.80
25-Sep-
14
7,96,784
220.55 306.19
160,98,362
5,093.67
Oct-14 331.40
9-Oct-
14 993,968 323.28 276.10
30-Oct-
14 607,095 169.58 294.58 8,783,741 2,637.75
____ (Source: www.nseindia.com) Note: In the event the high or low price of the Equity Shares are the same on more than one day, the day on which there has been higher
volume of trading has been considered for the purposes of this section.
* Average of the daily closing prices.
3. Market Price on the first working day following the Board meeting approving the Issue, i.e., on October
10, 2014:
BSE
Date
Open High Low Close Traded Volume (No.
of Equity Shares)
Total Value of Equity
Shares traded
(` in million)
October 10, 2014 319.00 319.00 301.80 303.00 78,422 24.27
_____ (Source: www.bseindia.com)
NSE
Date
Open High Low Close Traded Volume (No.
of Equity Shares)
Total Value of Equity
Shares traded
(` in million)
October 10, 2014 318.70 318.70 301.25 302.20 4,58,935 141.54
____ (Source: www.nseindia.com)
64
DIVIDEND POLICY
The declaration and payment of dividends on the Equity Shares will be recommended by our Board of Directors
and approved by our shareholders, at their discretion and will depend on a number of factors, including but not
limited to our profits, capital expenditure, capital requirements and overall financial conditions. The amounts
paid as dividends in the past are not necessarily indicative of our dividend policy or dividend amounts, if any, in
the future. The dividend and dividend tax paid by our Company during the last three fiscal years is presented
below:
Fiscal
Year
Number of Equity
Shares
Rate of dividend Dividend per share
2014 136,527,890 20% (` 1/- per equity share of ` 5/- each)
2013 136,527,890 20% (` 1/- per equity share of ` 5/- each)
2012 136,527,890 20% (` 1/- per equity share of ` 5/- each)
65
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion is intended to assist you in understanding our financial position at March 31, 2014
September 30, 2014, and our results of operations for the years ended March 31, 2012, 2013 and 2014 and for
the six months ended September 30, 2014. You should read the following discussion of our financial condition
and results of operations together with our audited consolidated financial statements as of and for the years
ended March 31, 2012, 2013 and 2014, including the notes thereto and reports thereon, included elsewhere in
this Placement Document. You should also read the sections entitled “Risk Factors” and “Forward Looking
Statements” included in this Offering Circular which discuss a number of other factors and contingencies that
could affect our financial condition and results of operations.
Overview
We are an international leisure and educational travel company with operations in 23 countries across four
continents. We have market leading brands in the leisure travel and education travel segments. Historically, our
core business has been the sale of packaged holidays for leisure travel, with a particular focus on cultural and
adventure tourism. We have also grown into other complementary business segments in recent times. We are a
market leader in providing residential outdoor activity trips for primary students in the UK and organize study
visits and tours for secondary and high school students from the UK and Germany to various global destinations.
We also operate a hotel chain that offers budget accommodation in Germany, Austria and the UK targeting
student groups and young urban travellers.
We operate our leisure travel business in India and across 17 international locations. In India, we distribute our
products and services through 241 points of presence covering 149 cities comprising 12 branch sales offices, 143
franchisee sales shops, and 86 agents as of September 30, 2014. Outside India, we operate through subsidiaries in
the UK, Japan, Australia, New Zealand, United Arab Emirates, the United States, the Netherlands, Singapore and
Canada. We maintain branch offices in Taiwan, Moscow, Maldives and Tahiti, and representative offices in
Russia, Brazil, Germany and South Africa.
We have operations pertaining to our education travel business in the UK, Germany, Austria, France, Spain,
Australia, Netherlands, Belgium and Ireland. We operate our education travel business under several leading
European brands, including PGL, NST and Meininger.
As of September 30, 2014, we had more than 3,500 permanent employees and 1,700 contract employees,
comprising approximately 2,000 employees in India and the remaining located in the UK, Netherlands, Germany
Australia, Japan, Dubai, the United States, New Zealand and France. Most of our contract employees are in the
educational travel market segment.
Our consolidated revenues in the years ended March 31, 2012, 2013 and 2014, and in the six months ended
September 30, 2014 were `8,735.1 million, `18,675.2 million, `23,506.6 million and `16,328.6 million,
respectively, while consolidated net profit in the years ended March 31, 2012, 2013 and 2014, and in the six
months ended September 30, 2014 was `416.1 million, `2,484.2 million, `3,831.7 million and `338.6 million,
respectively.
Factors Affecting Our Results of Operations
Our financial condition and results are affected by numerous factors including the following:
Ability to grow our product portfolio and add new destinations
Our results of operations are significantly dependent on our ability to grow our product portfolio and add new
destinations to our leisure packages. We have entered into strategic partnerships with various travel partners to
achieve this in the past. We also have partnered with various tourism boards, such as those of the United
Kingdom, New Zealand, Switzerland and Singapore to market these destinations to Indian travelers. These
strategic partnerships have expanded our product offerings and added new destinations to our portfolio, all of
66
which positively impacted our results of operations even during the recent global economic slowdown. Our
ability to continue growing our product and destination portfolio in the future is a significant factor affecting our
results of operations.
Negotiation of favorable rates with travel suppliers through consolidated buying efforts
An important component of our business success depends on our ability to maintain and expand relationships
with travel suppliers and GDS partners. In 2008, we commenced our consolidated buying efforts for our global
operations. We believe that this initiative has enhanced our bargaining power with our vendors, thereby
generating significant cost savings by making bulk bookings for air travel, hotel accommodations, car rentals and
ground handling services. Our ability to negotiate favorable rates with travel suppliers and GDS partners in the
future will affect our profitability as well as our ability to grow our market share by offering cost competitive
travel and tours products.
Our ability to grow and sustain our educational travel business
In recent years, our educational travel business has become a significant contributor to our results of operations.
We provide tour packages to students of primary and secondary schools in the U.K. through market leading
brands PGL and NST, respectively. Students who buy packages from our PGL brand participate in residential
outdoor trips to activity centres owned by PGL, located in France, Spain and the U.K. We also own Meininger
Holding GmbH which operates budget hotels for student tour groups and young urban travellers under the brand
Meininger, spread across Austria, Germany, Netherlands, Belgium and the U.K. Our brands EST and Travelplus
cater to students seeking higher education in the United Kingdom and German students seeking gap-year
placements, respectively. The growth of our future results of operations is therefore dependent on our ability to
increase the number of students participating in our educational tour packages and programs in Europe. We also
intend to grow this business in Australia and India, and our future results of operations will depend on our ability
to successfully replicate this business in new markets. If we are able to do so, we will improve our results of
operations whereas our failure to effectively grow our educational travel business will materially adversely affect
our results of operations and prospects.
Maintaining and enhancing awareness of our brands
We believe continued investment in our brand is critical to retaining and expanding our traveler, supplier and
advertiser bases. We have spent and expect to continue having to spend more to maintain our brand’s value due
to a variety of factors. These include increased spending from our competitors, the increasing costs of supporting
multiple brands, expansion into geographies and products where our brands are less well known, and inflation in
media pricing. We have spent considerable financial and human resources to date on the establishment and
maintenance of our brands, and we will continue to invest in, and devote resources to, advertising and marketing,
as well as other brand building efforts to enhance consumer awareness of our brands. We believe that heightened
brand awareness will enable us to expand our distribution network by significantly reducing entry barriers in new
markets.
Capitalizing on India’s increasing discretionary spending capacity
India is one of the most important markets for our growth strategy. This is as much a result of our strong historic
presence as the large business opportunities that the Indian travel and tourism industry presents for the future.
Travel expenditures are sensitive to personal and business discretionary spending levels and tend to decline or
grow more slowly during economic downturns, particularly in 2013 when India experienced a slowdown. This
has resulted in increased unemployment and uncertain business conditions and reduced financial capacity of both
corporate and leisure travellers, thereby slowing spending on the services we provide. In the event discretionary
spending in India increases in the near to medium term, our results of operations would benefit significantly if
we are able to capitalize on the increased business opportunity in India.
Declines or disruptions in the travel industry
Our business and financial performance are affected by the health of the worldwide travel industry, including by
changes in hotel occupancy rates or hotel average daily rates, changes in airline capacity or periodically rising
airline ticket prices. Events or weakness specific to the air travel industry that could negatively affect our
business also include fare increases, travel-related strikes or labor unrest, bankruptcies or liquidations and fuel
price volatility. Additionally, our business is sensitive to safety concerns, and thus our business has in the past
67
and may in the future decline after incidents of actual or threatened terrorism, during periods of political
instability or geopolitical conflict in which travelers become concerned about safety issues, as a result of natural
disasters such as hurricanes or earthquakes or when travel might involve health-related risks.
Ability to attract, retain and motivate our employees
In our business, our human resources are the largest driver of our profitability. Personnel costs form our highest
single expense item, and therefore is a key factor affecting our results of operations. In order to be successful, we
must attract, train, motivate and retain highly skilled personnel. Hiring and retaining qualified sales
representatives are critical to our future results of operations, and competition for experienced employees in the
tours and travel industry can be intense.
Competition
The market for the tour operator services we offer is increasingly and intensely competitive. We compete with
both established and emerging sellers of travel-related services, including traditional tour operators and travel
agencies, online travel agencies, travel suppliers and large online portals. We believe that our significant
presence in India, the strength of our brand and our global operations offer us significant competitive advantages
in the markets in which we operate. However, some of our competitors, particularly travel suppliers such as
airlines and hotels, may offer products and services on more favorable terms, including lower prices, no fees or
unique access to proprietary loyalty programs, such as points and miles. Many of these competitors, such as
airlines and hotel companies, have been steadily focusing on increasing online demand on their own websites.
We also compete with other travel agencies for both travelers and the acquisition and retention of supply.
Increased levels of competition from current and emerging competitors may force us to make changes to our
business model, which could affect our financial performance and liquidity.
Critical Accounting Policies
Our consolidated financial statements have been prepared in accordance with the Accounting Standard-21
“Consolidated Financial Statement” and Accounting Standard-27-”Financial reporting of Interest in Joint
Ventures” issued by the ICAI/Companies (Accounting Standards) Rules, 2006.
The preparation of our financial statements in conformity with Indian GAAP requires our management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent
liabilities at the date of such financial statements and the results of operations during the reporting period. By
their nature, these judgments and estimates are subject to a degree of uncertainty. These judgments are based on
our historical experience, terms of existing contracts, and our observance of trends in the industry, information
provided by our clients and information available from other third party sources, as appropriate. There can be no
assurance that our judgments will prove correct or that actual results reported in future periods will not differ
from our expectations reflected in our accounting treatment of certain items. Any revision to accounting
estimates is recognized prospectively in current and future periods.
While all aspects of our financial statements should be read and understood in assessing our current and expected
financial condition and results of operations, we believe that the following critical accounting policies warrant
particular attention.
Revenue
In line with generally accepted accounting practices, revenue comprises net commissions earned on travel
management, service agency charges including margins in respect of tour and tour related services and
commissions/margins earned on foreign exchange transactions in the normal course of our business as an
authorised dealer. The income arising from the buying and selling of foreign currencies has been included on the
basis of margins achieved.
Revenue Recognition
In accordance with our accounting policy, commissions and/or income arising from tours and related services is
recorded after netting off all direct expenditures relating thereto.
68
Expenditure
All general business expenditure is recorded in the year in which it is incurred. All direct tour related expenses
including advertisement expenses for specific tours are recorded in the year in which the tours are undertaken.
Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation. Costs include all costs relating to acquisition and
installation of fixed assets. Intangible assets include “customer data base and contacts”, which are stated at the
valued amounts and software, which is stated at cost.
Investments
Long-term investments are valued at cost. Provision for diminution in value of investments is made if the
diminution is of a nature other than temporary. Current investments are valued at the lower of cost and market
value.
Inventory
Inventory represents stock of foreign currencies, which we value at the lower of cost and realizable value as of
the year-end.
Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at spot rates / average rates. Monetary items
denominated in foreign currencies at the year-end are restated at year end rates. Non-monetary foreign currency
items are carried at cost.
• In respect of branches, which are integral foreign operations, all transactions are translated at rates
prevailing on the date of transaction or that approximate the actual rate on the date of transaction.
Branch monetary assets and liabilities are restated at the year-end rates.
• Any income or expense on account of exchange difference either on settlement or on translation is
recognised in the profit and loss account.
Accounting for Taxes on Income
Provision for current tax is made based on the tax payable under the relevant statute. Deferred tax on timing
differences between taxable income and accounting income is accounted for using the tax rates and the tax laws
enacted or substantially enacted as of the balance sheet date. Deferred tax assets are recognized only to the extent
that there is a reasonable certainty of its realisation.
Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed
in the financial statements.
Disposal of our Camping Division
Our camping division provided outdoor family holidays at over 170 third party owned campsites across 12
European countries. We had acquired the camping division as part of our acquisition of Holidaybreak in 2011. In
May 2014, we completed the sale of the camping division to Homair Vacances, a major French group that
specialises in outdoor holidays, for a consideration of `8,920.0 million (GBP89.20 Million). GBP85.5 million
of this was paid to us in cash on completion and the remaining £3.7 million relating to a tax refund was deferred.
The disposal of our camping division has had a material impact on our financial condition and results of
operations. While our unaudited consolidated balance sheet as of September 30, 2014 gives effect to the disposal
69
of our camping division, our historical consolidated income statements do not meaningfully reflect the impact of
the disposal of our camping business on our results of our operations. Accordingly, we have prepared pro forma
consolidated income statements for the year ended March 31, 2014 and for the six months ended September 30,
2014 to give effect to the disposal of our camping division as if such disposal had occurred on April 1, 2013. The
pro forma financial statements for the year ended March 31, 2014 and the six months ended September 30, 2014,
and the auditors' report thereon are included elsewhere in this Placement Document.
Selected pro forma consolidated financial data
We have prepared and presented our pro forma consolidated financial information based on our historical
consolidated financial statements for the year ended March 31, 2014 and the six months ended September 30,
2014. The objective of pro forma financial information is to illustrate how a proposed or completed transaction
(or event) might have affected the financial information presented in the Placement Document had the
transaction occurred at an earlier date. Pro forma financial information does not represent an entity's actual
financial position or results. It addresses a hypothetical situation and is prepared for illustrative purposes only.
The selected pro forma consolidated financial data is set out in pages F-59 to F-62 of this Placement Document.
Income and Expenditure Overview
Income
Commission and Other Operating Income
Our principal source of income is the fees we earn from selling travel services, which are primarily commission
based. Our commission and other operating income consists mainly of net commission (gross sales less direct
expenses like air tickets, hotels, ground services and distribution commissions) earned from providing leisure and
educational tour and travel services as well as providing ticketing and foreign exchange services to our corporate
travellers. We also derive revenues from various travel related services, including visa processing fees and travel
insurance commissions.
The following table sets forth the breakdown of our revenue by geographic segment, for the years ended
March 31, 2012, 2013 and 2014.
(` in million) Year Ended March 31,
2012 2013 2014
Revenues India .............................
2,989.5
3,773.1 4,247.6
Rest of the world .......... 5,389.8 14,314.3 18,828.4
Other Income
Other income includes interest earned from fully convertible debentures, interest or dividend earned from short
term investments, interest earned from bank deposits and miscellaneous income.
Expenditure
Personnel Expenses
Personnel expenses are the largest component of our expense. Our payment to, and provision for, employees
consists of salaries, allowances, bonuses, retrenchment benefits, incentives paid to staff other than contribution to
staff provident funds and other staff welfare expenses like gratuity and leave encashment.
Other Expenses
Other expenses include rent, electricity expense, insurance, communication and courier expenses, printing and
stationery, legal and professional fees, travelling and conveyance, advertisement, publicity and business
promotion, computer expenses, security expenses, foreign exchange gains or losses from the revaluation of
borrowings, and other miscellaneous expenses.
70
Interest and Finance Charges
We incur interest and finance charges on our indebtedness.
Depreciation
Depreciation includes depreciation on computers and printers, electrical installations and fittings, office
equipment, furniture and fixtures, leasehold improvements, land & building, vehicles, database and software.
RESULTS OF OPERATIONS
Year Ended March 31, 2014 Compared to Year Ended March 31, 2013
Total Income
Our total income increased by 25.87% to `23,506.6 million in the year ended March 31, 2014 from `18,675.2
million in the year ended March 31, 2013.
Revenue from Operations
Our revenue from operations for the year ended March 31, 2014 increased by 27.58% to `23,075.9 million from
`18,087.4 million in the year ended March 31, 2013. The increase in income from operations was attributable
principally to an increase in net revenues from India operations which grew from ` 3,722.7 million to ` 4.186.0
million an increase of 12.44% and increase in education travel business from `4,733.6 million to `8,679.2
million, an increase of 83.35%. This increase was because we did not consolidate revenues from Meininger prior
to April 30, 2013. Subsequent to April 30, 2013, we acquired a 100% interest in Meininger and our revenues in
the year ended March 31, 2014 therefore includes revenues from the operations of Meininger unlike in the
previous year.
Other Income
Other income decreased by 26.74% to `430.7 million in the year ended March 31, 2014 from `587.9 million in
the year ended March 31, 2013. This decrease was attributable primarily to a decrease in the interest on short
term investments.
Expenditure
Our expenditure increased by 5.17% to `16,917.0 million in the year ended March 31, 2014 from `16,085.8
million in the year ended March 31, 2013. However excluding the profit/loss on account of foreign exchange
fluctuation, the total expenditure increased by 19.20% to `2,204.5 million in the year ended March 31, 2014
from `442 million in the year ended March 31, 2013.
Employee Benefit Expenses
Employee benefit expenses in the fiscal year ended March 31, 2014 increased by 25.73% to `8,747.9 million
from `6,957.6 million in the fiscal year ended March 31, 2013. This increase was in line with the increase in the
income from operations.
Finance Costs
Finance costs in the fiscal year ended March 31, 2014 decreased by 12.67% to `3,235.8 million from `3,705.4
million in the fiscal year ended March 31, 2013. This decrease was attributable primarily to the reduction in
gross debt from the infusion of equity capital amounting to US$143.69 million by private equity participation in
November 2012 and June 2013.
Depreciation and Amortization Expense
71
Depreciation and amortization expense in the fiscal year ended March 31, 2014 increased by 16.11% to `1,711.3
million from `1,473.8 million in the fiscal year ended March 31, 2013. This increase was attributable primarily
to leasehold improvements in new offices in India as well as mobile homes and furniture in Camping and
education division.
Other Expenses
Other expenses decreased by 18.41% to `3,222.1 million in the fiscal year ended March 31, 2014 from `3,949.1
million in the year ended March 31, 2013. However excluding the profit/loss on account of foreign exchange
fluctuation, the other expenses increased by 38.97% to `5,426.6 million in the year ended March 31, 2014 from
`3,904.9 million in the year ended March 31, 2013. This increase is attributable primarily to the increase in the
rent, electricity and miscellaneous expenses from `1,117 million to `2,873.9 million due to the consolidation of
Meininger in the financials for FY2014. The exchange fluctuation lead to a gain of `2,204.5 million in FY2014
against a loss of `44.2 million in FY2013. The exchange fluctuation gain was recorded primarily on account of
the mark to market position for the US$ dollar held in the sterling balance sheet of some of the subsidiaries.
Profit Before Tax
Profit before tax in the year ended March 31, 2014 increased by 154.47% to `6,589.6 million from `2,589.5
million in the year ended March 31, 2013. The profit includes an exceptional loss and a gain on disposal of
subsidiaries. The profit adjusted for this exceptional item increased by 199.80% to `6,133.4 million for the year
ended March 31, 2014 as compared to `2,045.8 million for the year ended March 31, 2013. Excluding the
profit/loss from the foreign exchange fluctuation, the profit before tax but after exceptional items increased by
316.54% to `6,133.4 million from `2,045.8 million.
Provision for taxation
Provision for taxation increased by 215.32% to `1,642.8 million in the fiscal year ended March 31, 2014 from
`521.0 million in the fiscal year ended March 31, 2013. The increase was attributable mainly to an increase in
current tax of `1,082.7 million and a decrease in deferred tax of `75.5 million, in each case in the year ended
March 31, 2014 compared to the year ended March 31, 2013. The increase was in line with the growth in our
profit before tax for the year ended March 31, 2014.
Profit after Tax for the Year
Our consolidated profit after tax for the year ended March 31, 2014 increased by 194.48% to `4,490.6 million
from `1,524.9 million in the fiscal year ended March 31, 2013.
Year Ended March 31, 2013 Compared to Year Ended March 31, 2012
Income
Our income increased 113.79% to `18,675.2 million in the year ended March 31, 2013 from `8,735.1 million in
the year ended March 31, 2012.
Revenue from Operations
Our operating income in the year ended March 31, 2013 increased 115.85% to `18,087.4 million in the year
ended March 31, 2013 from `8,379.5 million in the year ended March 31, 2012. The increase in our operating
income was attributable principally to revenues from a full year of consolidating our acquisition of 100% of
Holidaybreak on September 27, 2011. Prior to our acquisition of Holidaybreak we did not have an educational
travel business and camping holidays business offering. Furthermore, because of the seasonality of our
educational travel and camping holidays business, the six months of consolidation of Holidaybreak in the year
ended March 31, 2012 represented a period when revenues are significantly lower for education travel business
and NIL for camping holidays business because of the winter months. Our higher revenues in the year ended
March 31, 2014 reflect this seasonal trend.
Other Income
72
Other income increased 65.32% to `587.9 million in the year ended March 31, 2013 from `355.6 million in the
year ended March 31, 2012. This increase was attributable primarily to the increase in interest from short term
investments.
Expenditure
Our expenditure increased 107.94% to `16,085.7 million in the year ended March 31, 2013 from
`7,735.8 million in the year ended March 31, 2012.
Employee Benefit Expenses
Employee benefit expenses in the fiscal year ended March 31, 2013 increased by 80.64% to `6,957.6 million
from `3,851.6 million in the fiscal year ended March 31, 2012. This increase was attributable primarily to a full
year of consolidating our acquisition of 100% of Holidaybreak on September 27, 2011.
Finance Costs
Finance costs in the fiscal year ended March 31, 2013 increased by 101.06% to `3,705.4 million from `1,842.9
million in the fiscal year ended March 31, 2012. This increase was attributable primarily to the increase in
indebtedness position on account of our acquisition of 100% of Holidaybreak on September 27, 2011.
Depreciation and Amortization Expense
Depreciation and amortization expense in the fiscal year ended March 31, 2013 increased by 199.94% to
`1,473.6 million from `491.3 million in the fiscal year ended March 31, 2012. This increase was attributable
primarily to a full year of consolidating our acquisition of 100% of Holidaybreak on September 27, 2011.
Other Expenses
Other expenses increased 154.78% to `3,949.1 million in the year ended March 31, 2013 from `1,550.0 million
in the year ended March 31, 2012. This increase was attributable primarily to a full year of consolidating our
acquisition of 100% of Holidaybreak on September 27, 2011.
Profit Before Tax
For the reasons discussed above, profit before tax in the year ended March 31, 2013 increased 197.57% to
`2,045.8 million from `687.5 million in the year ended March 31, 2012.
Provision for Taxation
Provision for taxation increased 24.76% to `521 million in the year ended March 31, 2013 from `417.6 million
in the year ended March 31, 2012. The increase was attributable mainly to an increase in current tax of
`226.4 million and a decrease in deferred tax of `47.1 million, in each case in the year ended March 31, 2013
compared to the year ended March 31, 2012. The increase was in line our growth in consolidated income in the
year ended March 31, 2013.
Profit after Tax for the Year
Profit after tax for the year ended March 31, 2013 increased 464.99% to `1,524.9 million from `269.9 million in
the year ended March 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
We finance our working capital requirements primarily through funds generated from operations as well as from
secured and unsecured debt financing from banks and financial institutions to meet our capital requirements.
Cash Flows
73
The following table sets forth certain our cash flows for the periods indicated:
Year Ended March 31,
2012 2013 2014
(` in million)
Net cash from (used in) operating activities ............... (1,365.8) 2,038.0 8,092.7
Net cash from (used in) investing activities ................ (26,603.8) (2,106.6) (6,237.8)
Net cash from financing activities ............................... 24,836.5 2,567.7 (1.185.9)
Net increase (decrease) in cash and cash equivalents .. (3,133.2) 2,499.1 669.1
Cash Flows from Operating Activities
Year ended March 31, 2014
Net cash generated from operating activities was `8,092.7 million for the year ended March 31, 2014 and
consisted of net profit before tax of `9,386.6 million, a net upward adjustment of `3,432.7 million relating to
various items, and a net downward working capital adjustment of `179.5 million, less income taxes paid of
`1,293.9 million.
Working capital adjustments were attributable principally to an increase in inventories of `1.9 million, a decrease
in trade receivables of `2,034.4 million, a decrease in loans and advances of `1,657.8 million and an increase in
current liabilities of `3,510.8 million. The increase in current liabilities in the fiscal year ended March 31, 2014
was because of increase in advances received from customers for travel dates in the subsequent fiscal year due to
a variance in the Easter dates.
Year Ended March 31, 2013
Net cash generated from operating activities of `2,038 million for the year ended March 31, 2013 consisted of
net profit before tax of `2,844 million, a net upward adjustment of `4,292.5 million relating to various items, and
a net downward working capital adjustment of `3,417.1 million, less income taxes paid of `806.0 million.
Working capital adjustments were attributable principally to a decrease in inventories of `133 million, a decrease
in trade receivables of `1,906.2 million, an increase in loans and advances of `1,466.7 million and a decrease in
current liabilities of `30.9 million. The increase in loans and advances in the year ended March 31, 2013 was
because of increase in advances for hotels and other services for upcoming tours..
Year Ended March 31, 2012
Net cash used in operating activities of `1,365.8 million for the year ended March 31, 2012 consisted of net
profit before tax of `687.4 million, a net upward adjustment of `1,735.2 million relating to various items, and a
net downward working capital adjustment of `3,529.0 million, less taxes paid of `259.4 million.
Working capital adjustments were attributable primarily to increase in advances for hotels and other services as
well as the seasonal change in working capital for Holidaybreak Limited which was acquired during the year on
September 27, 2011.
Cash Flows from Investing Activities
Year ended March 31, 2014
Net cash used in investing activities for the year ended March 31, 2014 was ` (6,237.8) million, comprising
primarily of `2,840.6 million attributable to Purchase of Fixed Assets & Capital Work In Progress and `2,568.2
million attributable to purchase of the residual 26% stake of Meininger..
Year Ended March 31, 2013
Net cash used in investing activities for the year ended March 31, 2013 was ` (2,106.6) million, comprising
primarily of `1,694.9 million attributable to Purchase of Fixed Assets & Capital Work In Progress and `1,719.0
million attributable to purchase of the additional 24% stake of Meininger.
74
Year Ended March 31, 2012
Net cash used in investing activities for the year ended March 31, 2012 was `(26,603.8) million, comprising
primarily of `1,433.7 million attributable to Purchase of Fixed Assets & Capital Work In Progress and `
27,707.4 million attributable to purchase of 100% shares of Holidaybreak Limited on September 27, 2011.
Cash Flows from Financing Activities
Year ended March 31, 2014
Net cash used in financing activities in the year ended March 31, 2014 was `1,185.9 million, comprising
primarily of `3,365.3 million attributable to Interest paid and `1,091.2 million attributable to proceeds from issue
of preference shares in subsidiary – Prometheon Holdings UK Ltd.
Year Ended March 31, 2013
Net cash generated from financing activities in the year ended March 31, 2013 was `2,567.7 million, comprising
primarily of `3,917.0 million attributable to Interest paid and `6,499.0 million attributable to proceeds from issue
of preference shares in subsidiary – Prometheon Holdings UK Ltd.
Year Ended March 31, 2012
Net cash generated from financing activities in the year ended March 31, 2012 was `24,836.5 million, consisting
principally of `23,991.8 million attributable to Net Long term borrowings to finance the acquisition of 100%
shares of Holidaybreak Limited.
Contractual Obligations
Indebtedness
As of September 30, 2014, we had total outstanding indebtedness of `48,604.0 million, comprising
`46,854.0 million in secured loans, and `1,750.0 million in unsecured loans. Our secured loans consists of term
loans from banks and other financial institutions of ` 42,904.0 million and non-convertible debentures of `
3,950.0 million. Our unsecured loans included loans from banks of ` 500.0 million, and non-convertible
debentures of ` 1,250.0 million.
Our loans comprise a mixture of floating and fixed rate obligations, and have been incurred at market interest
rates. The following table sets forth certain information relating to contractual commitments as of September 30,
2014, aggregated by type of contractual obligation:
Outstanding Payment due by March 31,
as of
Particulars September 30, 2014 2015 2016 2017 2018 Onwards
(` in million)
Secured Loans ............ 46,854.0 5,046.7 3,371.6 9,624.6 28,811.1
Unsecured Loans ........ 1,750.0 250.0 1,500.0 -
Total .......................... 48,604.0 5,296.7 4,871.6 9,624.6 28,811.1
Interest Coverage Ratios
Set forth below are our interest coverage ratios for the years ended March 31, 2012, 2013 and 2014.
Year Ended March 31,
2012 2013 2014
Interest coverage ratio
2.54 1.95 4.05
75
Contingent Liabilities
Contingent liabilities as of September 30, 2014 included the following:
Particulars Amount
(` in million)
Guarantees provided by banks ............................................ 3,425.1 Bonds given by insurance companies 1,476.9
Others 16.0
Claims against Company not acknowledged as debts ..............................................................................
137.0
Disputed income Tax ......................................................... 43.8
Disputed Service Tax 1,291.0
Related Party Transactions
We have entered into transactions with a number of related parties. We have not granted any loans to members of
the board or our management or provided any guarantees for their benefit. Moreover, we do not believe that any
of our related party transactions is unusual in its nature or conditions. However, please see Note 26(b) of our
audited consolidated financial statements included in this Placement Document for information regarding our
related party transactions as of and for the years ended March 31, 2012, 2013 and 2014.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with
unconsolidated entities that would have been established for the purpose of facilitating off-balance sheet
arrangements
Seasonality
Holidaybreak has traditionally reported an operating loss in the six month period ending March 31 in each
financial year due to the seasonal nature of the Education Travel and more so for the Camping Holidays
businesses, which focus exclusively on outdoor activities and therefore do not generate any significant revenues
during the winter months in Europe while continuing to incur operational expenses during those months. For this
reason our consolidated results of operations during the six month period ending March 31 in each financial year
perform at a significantly lower level than for the six month periods ending September 30 in each financial year.
Quantitative and Qualitative Disclosure about Market Risk
Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk and foreign
exchange risk and inflation. We are exposed to different degrees of these risks in the normal course of our
business. We are specifically exposed to market risk from changes in interest rates and foreign exchange
fluctuation.
Interest Rate Risk
Our financial results are subject to changes in interest rates, which may affect our debt service obligations. We
currently have floating rate indebtedness and also maintain deposits of cash and cash equivalents with banks and
other financial institutions and thus are exposed to market risk as a result of changes in interest rates. Moreover,
the interest rates on a significant portion of our indebtedness are subject to floating rates of interest. Upward
fluctuations in interest rates would increase the cost of both existing and new debts. We have entered into interest
rate swaps for GBP 90 million and US$ 216 million and interest rate caps for GBP 50 million to manage our
interest rate risk.
Foreign Exchange Risk
Fluctuations in exchange rates have direct impact on our business. Strengthening of the rupee may increase the
number of outbound tourists from India as foreign tours will become relatively cheaper. However, at the same
time it may affect inbound tourism as travelling to India would become relatively expensive and vice-versa. We
76
also have significant levels of indebtedness denominated in US$ and GBP, comprising ` 39,297 million as of
September 30, 2014. The revenues of our overseas subsidiaries are in Pound Sterling, in Japanese Yen, and in
Australian Dollars, while our India in-bound revenues are denominated in U.S. dollars, Euro and Pound Sterling.
Whilst a large portion of the outbound tours in India are charged to the client in the currency that is paid to the
contractors, there may be an effect on the profitability as the Company earns profits in Pounds, Yen and Rupees
depending on prevalent exchange rates.
We report our financial results in Indian rupees, while portions of our total income and expenses are
denominated, generated or incurred in currencies other than Indian rupees, such as U.S. dollars. To the extent
that our income and expenditures are not denominated in Indian rupees, exchange rate fluctuations could affect
the amount of income and expenditure we record. Any depreciation of the rupee against the currency in which
we have an exposure will increase the rupee costs to us of servicing and repaying our expenditure and
indebtedness.
Interim Announced Results
As a public listed company with shares listed on the BSE and the NSE, we are required to prepare and make
publicly available certain financial information on a quarterly basis. The standalone quarterly financial
statements are subject to a limited review by our auditors in compliance with the requirements of Clause 41 of
the listing agreement entered into with the Stock Exchanges. We announced this financial information as of and
for the six months ended September 30, 2014 on November 14, 2014. In connection with our November 14, 2014
announcement, we also announced consolidated unaudited financial statements as of and for the six months
ended September 30, 2013 and 2014. These consolidated financial statements as of and for the six months ended
September 30, 2013 and 2014 are reproduced below.
Unaudited Consolidated Income Statement for the Six Months Ended September 30, 2013 and 2014
` Million
Six months ended September 30,
Particulars 2014 2013
Unaudited
1. Income from operations
(a) Net Sales / income from operations 16,061.98 14,050.02
(b) Other operating income - -
Total Income from operations (net) 16,061.98 1,405.00
2. Expenses
a) Employee benefit expense 5,133.00 443.96
b) Advertisement Cost 701.55 596.58
c) Exchange Fluctuation Loss/(Gain) 582.71 (1,834.48)
d) Depreciation and amortisation expense 1,422.11 1,139.94
e) Other expenses 2,176.41 1,710.70
Total expenses ( a to e) 100,158.85 6,052.35
3. Profit/ (Loss) from operations before other income,
finance costs and exceptional items (1-2) 6,046.09 7,997.67
4. Other income
266.66 148.01
5. Profit/ (Loss) from ordinary activities before finance costs and exceptional items (3+4) 6,312.75 8,145.67
6. Finance costs 18,18.32 1,586.57
7.
Profit/ (Loss) from ordinary activities after finance costs but before exceptional items
(5-6) 4,494.43 6,559.10
8. Exceptional items
77
a) Profit on sale of Subsidiary (3,498.91) -
b) Cancellation of forward contracts on prepayment of loans 1,024.41 -
c) Goodwill amortisation for subsidiary sold (refer note 9) 5,518.59 -
d) Others 14.14 101.16
9. Profit / (Loss) from ordinary activities before tax (7+8) 14,36.20 6,457.94
10. Tax expense 1,159.34 1,550.99
11. Net Profit / (Loss) from ordinary activities after tax (9-10) 276.85 4,906.95
12. Extraordinary items (net of tax expense `Nil) - -
13. Net Profit / (Loss) for the period (11-12) 276.85 4,906.95
14. Share of profit/ (loss) of associates (5.72) 31.89
15. Minority Interest (67.55) 953.78
16.
Net profit/ (loss) after taxes, minority interest and share of profit/ (loss) of
associates(13+14+15) 338.68 3,985.06
17. Paid-up equity share capital (Face Value - `.5/- per share) 682.64 682.64
18. Reserves excluding Revaluation Reserve as per Balance Sheet
19(i) Earnings per share (EPS) ( before and after extraordinary items)
(of `5/- each) (not annualised)
(a) Basic 0.25 2.92
(b) Diluted 0.25 2.92
Unaudited Consolidated Balance Sheet as of September 30, 2013 and 2014
`Million
As of September 30,
Particulars 2014 2013
A EQUITY AND LIABILITIES
1 Shareholders Funds :
a) Share Capital 682.6
682.6
b) Reserves and Surplus
17,365.9
16,866.5
c) Minority Interest
8,198.0
8,205.4
Sub-Total of Shareholders Funds :
26,246.5
25,754.5
2 Non-Current Liabilities :
a) Long-term borrowings 42,355.0
47,394.5
b) Deferred tax liability (Net)
619.0
699.9
c) Long term provisions
88.6
244.8
Sub-Total of Non-Current Liabilities : 43,062.6
48,339.2
3 Current Liabilities :
a) Short-term borrowings 3,583.0
3,463.4
b) Trade payables
5,831.5
5,427.7
c) Other current liabilities
14,007.7
21,179.4
d) Short-term provisions 842.7
643.3
78
Sub-Total of Current Liabilities :
24,264.9
30,713.9
TOTAL EQUITY AND LIABILITIES
93,574.0
104,807.5
B ASSETS
1 Non-current assets :
a) Fixed Assests
21,166.0
26,122.0
b) Goodwill on Consolidation 35,148.7
40,532.0
c) Non-current investments
399.9
321.0
d) Deferred Tax Assets
8.2
1.1
e) Long term loans and advances -
150.7
Sub-Total of Non-current assets :
56,722.8
67,126.8
2 Current Assets :
a) Current investments
280.1
280.8
b) Inventories
226.7
199.1
c) Trade receivables 10,724.9
11,355.8
d) Cash and Cash Equivalents
13,846.4
13,786.3
e) Short-term loans and advances
11,756.6
12,042.2
f) Misc. Expenditure 16.5
16.5
Sub-Total of Current Assets :
36,851.2
37,680.7
TOTAL ASSETS
93,574.0
104,807.5
Significant Developments after September 30, 2014 that may Affect Our Future Results of Operations
To our knowledge, no circumstances have arisen since the date of the last financial statements as disclosed in this
Placement Document which materially and adversely affect or are likely to affect, our operations or profitability,
or the value of our assets or our ability to pay our material liabilities within the next 12 months, except as
disclosed elsewhere in this Placement Document.
79
INDUSTRY OVERVIEW
The information contained in this section is derived from various reports, publications and information in other
forms, available to the public on the websites of various international bodies including the World Tourism
Organisation (UNWTO), the World Travel & Tourism Council (WTTC), and that of Ministry of Tourism,
Government of India. Neither we nor any other person connected with this Issue has independently verified this
information. Industry sources and publications generally state that the information contained therein has been
obtained from sources believed to be reliable, but that their accuracy, completeness and underlying assumptions
are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be
based on such information.
Overview of the global travel and tourism industry
Travel and tourism is one of the world’s leading economic sectors, representing a major source of gross domestic
product (GDP), employment, exports and taxes. In 2013, as per the World Travel & Tourism Council (WTTC)
the travel and tourism industry contributed almost U.S. $7 trillion to the global economy, or 9.5% of the global
GDP (Source: WTTC Travel & Tourism Economic Impact 2014). It is the leading industry in many countries, as well
as the fastest growing sector in terms of job creation, supporting nearly 266 million jobs worldwide (Source:
WTTC Global Travel and Tourism Industry 2014). While the last 10 years have seen strong global growth helped by
the fast growth of high-tech industry, as well as rapid growth in service sectors such as banking and global
finance, the next 10 years are expected to see a slower performance from these sectors. Continued growth in
travel and tourism sector will therefore result in an increase in the sector’s relative share of GDP. In short, travel
and tourism sector is expected to become even more important to the global economy over the next 10 years with
predicted growth rates of over 4% annually that continue to be higher than growth rates in other sectors (Source:
WTTC Global Travel and Tourism Industry 2014).The economic significance and potential of the travel and tourism
industry is particularly prominent in the developing world, where the sector is an important driver of growth and
prosperity and especially with regard to poverty reduction.
Source: WTTC Global Travel and Tourism Industry 2014
80
The United Nations classified three forms of tourism in 1994, in its 'Recommendations on Tourism Statistics',
which are as follows:
(i) domestic tourism, which refers to residents of the given country travelling only within that country;
(ii) inbound tourism, which refers to non-residents travelling in the given country; and
(iii) outbound tourism, which refers to residents of one country travelling in another country.
International tourism shows continued strength
More people are travelling to more places more frequently for business, leisure, education and other personal
reasons. In 2012, for the first time ever, the number of people crossing borders globally exceeded 1 billion. These
levels are expected to nearly double by 2030. (Source: Tourism for Tomorrow: The WTTC Perspective).
Between January and August 2014, international tourists reached 781 million, up 36 million (4.8%) when
compared to the same period in 2013. By region, the strongest growth was registered in the Americas (+8%),
followed by Asia and the Pacific (+5%) and Europe (+4%) (Source: UNWTO Press Release October 2014).
In 2013, international tourists arrivals grew by 5% worldwide, reaching a record 1087 million, up from 1035
million in 2012, when the 1 billion mark was exceeded for the first time ever. Despite a global economy in 'low
gear', demand for international tourism exceeded expectations, with an additional 52 million international tourist
travelling internationally in 2013 (Source: UNWTO Tourism Highlights – 2014 edition).
International Tourist Arrivals
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Region-wise increase in world tourism in 2013
In 2013, Europe saw the largest increase in international tourist arrivals, followed by Asia and the Americas.
International tourism receipts also experienced growth reaching U.S. $1,159 billion worldwide in 2013, up from
U.S. $1,078 billion in 2012. With a 5% increase in real terms, the growth in international tourism receipts
equalled the growth in arrivals (Source: UNWTO Tourism Highlights – 2014 edition).
In 2013, only two changes took place in the top 10 rankings by international tourist arrivals and tourism receipts.
In the ranking by arrivals, Spain (with 61 million arrivals) regained third position. Thailand also entered the top
10 arrivals ranking at number 10, climbing up five positions, whilst it moved up two places to 7th in the ranking
by tourism receipts (Source: UNWTO Tourism Highlights – 2014 edition).
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International tourist arrivals grew by 4.6% in the first half of 2014 according to the latest UNWTO World
Tourism Barometer. Destinations worldwide received some 517 million international tourists between January
and June 2014, 22 million more than in the same period of 2013. Growth was strongest in the Americas (+6%)
followed by Asia and the Pacific and Europe (both at +5%). By sub-region, South Asia and Northern Europe
(both +8%) were the best performers, together with North-East Asia and Southern Mediterranean Europe (both
+7%). (Source: WTTC - Monthly News Summary – September 2014).
Prospects and emerging trends in the travel and tourism industry
The world tourism industry contributes to over 6% of the global exports, is directly responsible for 9.5% of the
world's GDP and provides employment to one out of every 11 people in the world, and its contribution is all set
to keep on increasing. The growth trend seen in the travel and tourism industry over the last couple of years
continued in 2014. For the full year 2014, UNWTO predicts international tourist arrivals to increase by 4% to
4.5%, slightly above UNWTO's long-term forecast of 3.8% per year for the period 2010 to 2020 (Source: UNWTO
Press Release October 2014).
Emerging destinations especially Asia and Pacific and the Middle-East, are expected to continue leading the
growth, taking advantage of a far from exhausted demand from neighbouring countries.
In 2013, worldwide leisure travel spending (both inbound and domestic) generated U.S. $3,412.8 billion, which
is 75.6% of the total travel expenditure. Out of this, business travel accounts for a relatively modest 24.4%, or
U.S. $1,103.7 billion. According to WTTC. leisure travel spending is expected to grow by 4.3% in 2014 to U.S.
$3,558 billion and rise by 4.4% p.a. to U.S. $5,451.2 billion in 2024. Similarly, business travel spending is
expected to grow by 4.7% in 2014 to U.S. $1,155.5 billion and rise by 3.7% p.a. to U.S. $1,661.1 billion in 2024
(Source: WTTC Global Travel and Tourism Industry 2013).
WTTC’s research suggests that around 70% of Travel & Tourism’s direct global GDP contribution is generated
by domestic travellers, a clear majority over the 30% share made by foreign visitors. Worldwide, domestic
spending is projected to reach U.S. $3,354.5 billion in 2014, with foreign trips generating U.S. $1,358.6 billion.
The dominance of domestic Travel & Tourism over the international market, in terms of spending and GDP, may
seem surprising, however, foreign travel, particularly for leisure purposes, is a very different proposition in
different parts of the world, and for simple geographical reasons is much less costly in Central/Eastern Europe or
Southeast Asia than in places like the U.S.A., China and Australia (Source: WTTC Global Travel and Tourism
Industry 2013).
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International Tourist Arrivals, World
(Source: 2013 International Tourism Results and Prospects for 2014, UNWTO.)
Emerging Trends
With travel becoming more accessible in terms of destination and product choice as well as price, the 10 years
between 2000 and 2010 spurred a rapid increase in travel frequency, with the growth in short breaks not
surprisingly outpacing that of longer leisure trips. Not only did this boost domestic travel but, at the market’s
peak in 2008-2009, a significant share of Europeans – especially those suffering time constraints – were taking
upwards of four to five foreign short breaks a year, often at the expense of longer annual holidays. And the trend
has spread to Asia, where the rising new middle classes have also been quick to take advantage of the new
opportunities to travel abroad (Source: WTTC Global Travel and Tourism Industry 2013).
Fast-growing emerging markets, such as Brazil, Russia, India and China (the BRIC nations), have also been a
game changer, forcing the Travel & Tourism industry to focus greater attention in terms of marketing and
product development on new travel source regions, especially Asia (Source: WTTC Global Travel and Tourism
Industry 2013).
Furthermore, the rise in ‘green consumerism’ – increased environmental awareness and concern about issues
such as climate change – has led to a greater focus among consumers on authenticity in destinations, products
and travel experiences (Source: WTTC Global Travel and Tourism Industry 2013).
Estimates and forecasts
International tourism is expected to continue reaching over 1 billion tourists in 2014. Its role as one of the most
important global industries will be further cemented. Below is a table that indicates the kind of growth that will
be experienced in the next decade.
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WORLD 2013 US$
billion1
2013
% of total2
2014
Growth3
US$
billion1
2024
% of total
Growth3
Direct contribution to GDP 2,155.40 2.90 4.30 3,379.30 3.10 4.20
Total contribution to GDP 6,990.30 9.50 4.30 10,965.10 10.30 4.20
Direct contribution to
employment4
100,894 3.40 2.20 126,257 3.70 2.00
Total contribution to
employment4
265,855 8.90 2.50 346,901 10.20 2.40
Visitor exports 1,295.90 5.40 4.80 2,052.40 5.20 4.20
Domestic spending 3,220.60 4.40 4.20 5,057.10 3.60 4.20
Leisure spending 3,412.80 2.20 4.30 5,451.20 2.40 4.40
Business spending 1,103.70 0.70 4.70 1,661.10 0.70 3.70
Capital investment 754.60 4.40 5.80 1,310.90 4.90 5.10
Note: 12013 constant prices & exchange rates, 22014 real growth adjusted for inflation (%); 32014-2024 annualised real growth adjusted for inflation (%) 4'000 jobs. All employment figures are in thousands.
(Source: WTTC Global Travel and Tourism Industry 2014).
The overall scenario surrounding world travel and tourism in the long run is bright. Estimates peg international
tourist arrivals at 1.8 billion by 2030:
(Source: 2013 International Tourism Results and Prospects for 2014, UNWTO)
Ten Year Outlook and New World Order: 2014-2024
Both total and direct Travel & Tourism GDP are set to grow on average by 4.2% per year and growth in
the sector is expected to continue to exceed that in the wider economy as well as other industries in the
long-run.
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In the next decade, Travel & Tourism is expected to provide a total of 74.5 million new jobs, 23.2
million of which will be provided directly within the sector.
The contribution of Travel & Tourism to the wider economy is expected to rise from 9.5% in 2013 to
10.3% in 2024. Key to this increased contribution are expected growth in demand from emerging
markets and a rising importance of Travel & Tourism in overall consumer spending.
Asia remains the fastest growing Travel & Tourism region in the long-run, while Russia and Turkey
will be integral to boosting long-run European growth. In the longer run, the expanding middle class in
emerging markets will keep average prices stable as tourism becomes much more of a mass market
activity. Luxury travel will still continue to grow, but not as fast as overall demand.
(Source: Economic Impact of Travel & Tourism 2014 Annual Update: Summary)
Education Travel
Learning initiatives outside the classroom are one of the most highly emphasised parts of any educational
curriculum in the United Kingdom, as well as the rest of Europe. It has been found to supplement learning and
broaden children's minds, and teachers also benefit tremendously from such initiatives. Education travel trips
have therefore become a huge industry in itself. The Children, Schools and Families Committee of the House of
Commons debated and formally decided in 2010 to make such trips mandatorily part of the curriculum and
evaluation of a student. As a result, students from diverse age groups in the United Kingdom now travel to all
parts of Europe in order to supplement what they learn from textbooks with real and related experiences. Many
of these educational travel trips are funded by the government and the industry is estimated to be worth at least
GBP 100 million, thereby ensuring profitability and continuity of this market. (Source: Transforming Education
Outside the Classroom, 2010, Report of the House of Commons – Children, Schools and Families Committee)
Births in England have been broadly rising since 2002, leading to increases in primary-aged pupils from 2010.
The full-time equivalent number of pupils of all ages in state-funded primary schools peaked in 1999 at 4.30
million and began to fall in 2000, reaching a low of 3.95 million in 2009, due to the downward trend in birth
rates during the late 1990s.
Growth in primary pupils continuing until at least 2023: In 2010, the number of pupils in primary schools began
to increase. By 2018, there are projected to be 4.58 million pupils in state-funded primary schools, an increase of
7% from 2014. By 2023, the number is projected to increase to 4.66 million, 9% higher than in 2014.
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All regions of the countries are expected to see some increase in the secondary-aged population from 2017.
However, London will see growth in this age-range earlier, from 2015 onwards.
Overview of the travel and tourism industry in India
Tourism in India is a multi-sector activity characterised by multiple services provided by a range of suppliers. It
is the largest service industry in the country, and provides employment to over 50 million people making it the
country's largest provider of employment in the service sector. It is also the third largest foreign exchange
earning industry in the country, and its importance lies in being an instrument for economic development and
employment generation, particularly in remote and backward areas. It is contributing towards overall socio-
economic improvement and accelerated growth in the economy. The economic benefits flow into the economy
through growth of tourism in the share of increased national and state revenues, business income, employment,
wages and salary income. Tourism is overwhelming an industry of private sector providers while public sector
has a significant role to play in infrastructure areas either directly or through public private partnership mode.
The travel and tourism industry spending in India as a percentage of the GDP is amongst the lowest in the world.
According to WTTC, India is ranked eighth on both, growth in travel and tourism industry GDP from 2014-2024
as also percentage annual growth in the travel and tourism industry’s contribution to total capital investment over
the period 2014-2024. The contribution of the Indian tourism industry to the GDP was 6.2%, while contribution
to employment was directly 4.9% and indirectly 7.7% of the total employment. (Source: WTTC Global Travel and
Tourism Industry 2014)
In the year 2013, the tourism sector received nearly seven million foreign tourists, marking an improvement of
5.9% when compared to the previous year. Across the globe, whilst the majority of countries reduced their
marketing spend during recession, the Ministry of Tourism, Government of India continues to aggressively
promote India as an attractive tourist destination through its "Incredible India" brand campaign and promotional
programme such as "Visit India". As a measure to attract more foreign tourists to India, particularly during
sluggish economic conditions, the Indian government launched a scheme of Visa on Arrival in January 2010.
Currently, the scheme applies to the citizens of eleven (11) countries who visit India for tourism purposes and
reports have indicated that this number is likely to be increased substantially in the near future. (Sources: Bureau of
Immigration, India; Performance of the Tourism Sector during 2013, Ministry of Tourism, Government of India)
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India 2013 2024
Amount
(in ` billion)
% of total Growth Amount
(in `. billion)
% of total Growth
Direct contribution to GDP 2,178.10 2.00 7.50 4,346.40 2.10 6.40
Total contribution to GDP 6,631.60 6.20 7.30 13,983.00 6.80 7.70
Direct contribution to
employment
22,320 4.90 2.50 28,081 5.10 2.10
Total contribution to
employment
35,439 7.70 2.70 43,837 7.90 1.90
(Source: Travel and Tourism Economic Impact 2014 (India) – World Travel and Tourism Council)
Inbound tourism in India
After witnessing an increase of 10% during 2013 when compared to 2012, inbound tourism in India made a
strong increase of nearly 8.2% in 2011 and is expected to further increase at a good pace in the coming years.
With the strengthening of the rupee, incoming tourists receipts increased by 7.5% in current value terms in 2013.
As in the previous years, the U.S. and the United Kingdom remained the top two largest source countries in
India. In order to boost inbound tourism in India, the Indian government has instituted a host of initiatives under
the 'Atithi Devo Bhava' umbrella to encourage and attract foreign tourists. (Source: Website of the Ministry of
Tourism, Government of India)
Arrivals by Country of Origin: 2008 – 2015 (forecast)
‘000 trips
Country 2008 2009 2010 2011 2012f 2013f
U.K. 932 706 855 848 862 1,007
U.S. 790 642 737 796 860 942
Canada 201 180 205 223 238 258
France 255 188 210 237 234 251
Germany 232 147 203 252 257 291
Sri Lanka 180 187 206 226 242 259
Japan 127 84 116 109 119 127
Australia 162 143 165 164 183 228
Malaysia 129 126 142 153 161 173
South Korea 81 82 96 103 109 120
Note:
f = BMI Forecast
Source: UNWTO and Ministry of Tourism, Government of India, cited by Business Monitor International – India Tourism
Report 2012.
Outbound tourism
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According to the Pacific Asia Travel Association, India is one of the fastest growing countries for outbound
travel in the world. With the recovering economy, improved consumer confidence and attractive tour packages, a
higher number of tourists travelled overseas in 2013, registering 11.4% growth in Indian outbound tourists.
The number of Indian nationals' departures from India during 1991 was 1.9 million, which rose to 12.99 million
in 2010 with a compound annual growth rate (CAGR) of 10.5%. The number of Indian nationals' departures
from India during 2013 registered a growth of 11.4% over 2012. 'Euromonitor International' predicts that in the
period between 2010 and 2015, Indian outbound tourism is expected to increase by a CAGR of 12%. (Source:
India Tourism Statistics 2010, Ministry of Tourism Government of India).
In line with the historic trend, in 2010 the most outbound tourists visited Singapore, the United Arab Emirates
and Thailand. Although from a small base, Nepal and Sri Lanka were the fastest growing destinations in 2010.
Apart from the regular tourist destinations such as Singapore, Malaysia and Thailand, the desire to explore new
places is diverting tourists towards news destinations, such as the Middle East, Egypt, Indonesia and Italy.
(Source: India Tourism Statistics 2010, Ministry of Tourism, Government of India)
Departures by Destination: 2008-2015 (forecast)
‘000 trips
Country 2008 2009 2010 2011 2012f 2013f
Singapore 830 942 1,060 1,164 1,284 1,421
Bahrain 745 840 946 1,039 1,146 1,270
Kuwait 700 799 882 965 1,062 1,165
Saudi Arabia 561 605 654 697 746 803
USA 557 622 694 758 831 915
Thailand 547 615 691 758 834 923
China 527 596 672 740 817 907
Malaysia 409 466 529 586 649 723
UK 450 634 653 730 835 900
Hong Kong 203 209 217 223 231 239
Domestic Tourism
Domestic tourism is vital for the growth of Indian tourism. Despite economic downturn, domestic tourism
increased steadily in the country, and is expected to grow further. With increasing disposable income and surging
trend of short trips and weekend getaways, in 2010 the number of domestic tourists trips increased by 10.7%,
with the CAGR for domestic tourist visits to all states in India from 1991 to 2010 being 13.5%. In 2010,
domestic tourist expenditure saw growth of 15% in current value terms, and this growth trend is expected to
continue on account of the increasing willingness of travellers to spend money. Due to the growing trend of
holidaying amongst Indians, the 'Research and Markets' forecast for domestic tourism in India predicts an
increase by a CAGR of 12.29% in volume terms over the period from 2008-2015. (Source: Indian Tourism Statistics
2010, Ministry of Tourism, Government of India; India Tourism – Market Entry Report, Overseas Indian Felicitation Centre)
Key drivers for growth of travel and tourism market in India
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Robust economic growth
With the Indian economy consistently clocking high growth rates in recent years, business travel and the MICE
segment has seen an uptick opening up greater business opportunities for both Indian companies (within India
and abroad) and multinational companies (within India). Investments into tourism infrastructure is also receiving
fillip as better roads, new hotels and greater connectively to travel destinations encourages more people to travel.
High disposable income
Reflecting the country's economic prosperity, the disposable income of Indian middle class and their propensity
to spend has increased. More Indians are travelling to both overseas and domestic destinations. With India
emerging as a big spender on leisure travel, several foreign countries have begun promoting themselves as
attractive leisure destinations to Indian tourists, resulting in a further increase in Indians travelling abroad. With a
fast emerging middle class, the target audience for the travel and tourism industry is expected to grow at a CAGR
of 15% over 1985-2015.
Government initiatives
The Indian government has launched several marketing campaigns (for example "Incredible India" campaign
within India and abroad) has resulted in Indian destinations seeing more tourists from both abroad and within
India).Further, hosting international events such as Commonwealth Games and leveraging this platform to
highlight several travel destinations with the country has also resulted in attracting tourists. (Source: India Tourism
Statistics 2010 and website of the Ministry of Tourism, Government of India).
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OUR BUSINESS
The following information is qualified in its entirety, and should be read together with the more detailed
financial and other information included in this Placement Document, including the information contained in
“Risk Factors”. In this section, references to, the "Company", "Our Company", or the "Issuer" are to Cox &
Kings Limited on an unconsolidated basis, references to "we", "us", "our" are to Cox & Kings Limited and all its
Subsidiaries where relevant, on a consolidated basis.
Overview
We are an international leisure and educational travel company with operations in 23 countries across four
continents. We have market leading brands in the leisure travel and education travel segments. Historically, our
core business has been the sale of packaged holidays for leisure travel, with a particular focus on cultural and
adventure tourism. We have also grown into other complementary business segments in recent times. We are a
market leader in providing residential outdoor activity trips for primary students in the UK and organize study
visits and tours for secondary and high school students from the UK and Germany to various global destinations.
We also operate a hotel chain that offers budget accommodation in Germany, Austria and the UK targeting
student groups and young urban travellers.
Our “Cox & Kings” brand has evolved over a period of more than 250 years, and was ranked first in a survey of
“Top Brands in India” (2008), conducted by research agency, TNS and co-funded by Media magazine. We have
won numerous awards, including the award for the "Favourite Outbound Tour Operator" (2014) by Outlook
Traveller, and "Favourite Specialist Tour Operator" (2013) by Condé Nast Traveller Readers.
We operate our leisure travel business in India and across 17 international locations. In India, we distribute our
products and services through 241 points of presence covering 149 cities comprising 12 branch sales offices, 143
franchisee sales shops, and 86 agents as of September 30, 2014. Outside India, we operate through subsidiaries in
the UK, Japan, Australia, New Zealand, United Arab Emirates, the United States, the Netherlands, Singapore and
Canada. We maintain branch offices in Taiwan, Moscow, Maldives and Tahiti, and representative offices in
Russia, Brazil, Germany and South Africa.
We have operations pertaining to our education travel business in the UK, Germany, Austria, France, Spain,
Australia, Netherlands, Belgium and Ireland. We operate our education travel business under several leading
European brands, including PGL, NST and Meininger.
As of September 30, 2014, we had more than 3,500 permanent employees and 1,700 contract employees,
comprising approximately 2,000 employees in India and the remaining located in the UK, Netherlands, Germany
Australia, Japan, Dubai, the United States, New Zealand and France. Most of our contract employees are in the
educational travel market segment.
Our consolidated revenues in the years ended March 31, 2012, 2013 and 2014, and in the six months ended
September 30, 2014 were `8,735.1 million, `18,675.2 million, `23,506.6 million and `16,328.6 million,
respectively, while consolidated net profit in the years ended March 31, 2012, 2013 and 2014, and in the six
months ended September 30, 2014 was `416.1 million, `2,484.2 million, `3,831.7 million and `338.68 million,
respectively.
Our Competitive Strengths
One of the largest Travel and Tour Companies in India with a strong brand recognition
We believe we are one of the largest travel and tour companies in India. Our brand “Cox & Kings”, which has
evolved over a period of more than 250 years, is one of the oldest, and we believe, one of the most recognized,
names in the travel and tourism industry. “Cox & Kings” was ranked first in a survey of “Top Brands in India”
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(2008), conducted by research agency TNS and co-funded by Media magazine. We also have won several
prestigious awards for our services, including “Favourite Outbound Tour Operator” and “Favourite Inbound Tour
Operator” awarded by The Outlook Traveller (2014), “Favourite Specialist Tour Operator - 1st Runner-Up”
awarded by Condé Nast Traveller Readers (2013), “Best Outbound Tour Operator” awarded by ITCTA (2013),
“India's Leading Tour Operator” and “India's Leading Travel Agency” awarded by World Travel (2013), “Best
Outbound Tour Operator” awarded by Hospitality India & Explore the World Annual International Awards
(2013), “Best Inbound Tour Operator” awarded by TAAI (2013), “Best Company providing Foreign Exchange in
India” awarded by CNBC Awaaz (2013) and “Award for Contribution to the Promotion of Taiwan Tourism in
2013” awarded by Taiwan Tourism (2013). We have created several strong brands in India. Our Duniya Dekho
brand caters to overseas group tours, our Bharat Dekho brand caters to our domestic group tours in India, the
Gaurav Yatra brand caters specifically to the Jain and Gujarati communities, our Anand Yatra brand caters to the
Marathi community in India, and our Luxury Escapades brand is tailored to premium overseas individual
travellers.
We believe that providing a superior service experience to customers is among the most important success
factors in the travel and tourism industry. Our long track record of providing high-quality travel and tour
services, as evidenced by our strong brand name and recognition and the numerous awards we have received,
have enabled us to become a leader in the Indian travel and tour industry.
Bouquet of market leading brands across various geographies
We have several market leading brands across the UK, the Netherlands, India and the United States in each of
our market segments. In the UK, the Cox & Kings brand is a specialist brand for premium leisure tours, our PGL
brand is the market leader for residential outdoor activity trips for primary students, our NST brand is a leader for
study visits and tours for secondary students and our Explore brand is one the leading brands in the UK for soft
adventure travel tours. We believe in offering complete travel solutions for our holiday packages, including visa,
insurance and foreign exchange.
The products and services that we offer through our brands have won several awards, in India and
internationally. Some of the recent awards include the Indian National Tourism Awards 2013 awarding Cox &
Kings Ltd. with ‘Best Overseas Tour Operator to India from the UK’ award, SPAA 2013 awarding Superbreak
with ‘Best U.K. Holiday Company’, British Travel Awards 2013 awarding Explore with ‘Best Medium Holiday
Company for Safari, Wildlife and Nature’ award, Travel+Leisure World’s Best Awards 2012 ranking C&K US
as ‘One of the Best Tour Operators for Africa’. Our PGL brand is the market leader for residential outdoor
activity trips for primary students and has won several awards, including “Winner - For our outstanding
contribution towards supporting young people through the power of PE and sport”, Youth Sport Trust Business
Awards, 2012, and “Best Youth Operator to France, 2012”, Atout France, the Tourism Development Agency of
France. Our NST brand is the market leader for study visits and tours for secondary students, Explore is one the
leading brands in the UK for soft adventure travel tours and has won the awards for “Best Adventure and
Activity Specialist” by Travel Bulletin Star Awards (2013). Our Superbreak brand has won awards for "Best
Hotel Booking Company” by SPAA Travel Awards (2013) and “Best Operator UK Holidays” by Travel Weekly
Globes (2014). We believe the awards we have won are a reflection of the strength of our market leading brands
across various geographies.
Expansive Distribution Network across Our Worldwide Operations
We believe that a strong distribution network is essential to expand our customer base in the travel and tours
industry, and we therefore have constantly focused on strengthening our reach. We have a strong distribution
network with a mix of retail distribution through shops, franchise outlets, direct distribution through call centre
agents and the Internet and through our channel partners. In India, we distribute our products and services
through 241 points of presence covering 131 cities across 24 states, comprising 12 branch sales offices, over 143
franchisee sales shops, and 86 agents. In the UK, we sell our leisure packages through several high street agents
including TUI, Thomas Cook and Countrywide. In Australia, we distribute our products through the leading
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travel retail agent chains. We also generate significant revenues for all our international geographies from our
direct marketing channels, including bookings made through call centre agents or the Internet.
We operate branch offices in Taiwan, Moscow, Maldives and Tahiti, and representative offices in Russia, Brazil,
Germany and South Africa to strengthen our global sales and service network. In the education travel segment,
our direct sales teams of PGL and NST directly reach out to our key clients. In the case of Meininger, we sell
through a mix of online bookings agent and direct marketing (website, call centre and walks-ins). We are a
shareholder member of Radius Inc, a consortium of leading business travel agents present in more than 3,600
locations across approximately 80 countries.
Strong Technology Platform
Technology is critical for our business. We have developed and implemented a comprehensive central
reservation technological platform for our travel products and services. Our business partners and clients can
make reservations of flights, excursions, transfers, hotels and other services online and design packages
dynamically. Our platform enables us to rapidly exapnd our franchisee network and is supported by CRM
software that improves our business efficiencies in terms of reduced turn-around time (TAT) and increased
business handled per employee. Our technology also enables us to provide white label/co-branded offerings for
clients such as Jet Escapes. We have also built-in online payment gateways, which are well integrated to our
existing technology platform. We use data-management software, including ERP, and have integrated our
computer reservation systems (CRS) with our mid and back office. We have a dedicated call centre with
appropriate technology infrastructure and staffed with well informed and efficient executives. We believe that
the technologies we use in our operations give us a significant competitive edge by enabling us to manage our
unified access to hotel reservations and airline tickets in an effective manner to minimize costs.
Experienced management team
We are led by an experienced management group that has worked and has been associated with the travel
industry for many years and developed the skill, expertise and vision to continue to expand our business in new
markets. Our operations are overseen by a professional management team, under the guidance of the Chairman,
Mr. A. B. M. Good and Directors, Mr. Ajay Ajit Peter Kerkar and Ms. Urrshila Kerkar.
We believe that the strategic leadership and direction provided by our management team enables us to explore
new opportunities while strengthening our current operations. For further information on our management team,
please see "Board of Directors and Senior Management".
Our Business Strategy
Continue to consolidate product sourcing operations globally
We have rapidly grown our business operations in recent years, organically and through acquisitions. Since 2008,
we have increasingly leveraged the size of our global operations to consolidate buying efforts. We believe that
this initiative has enhanced our bargaining power with our vendors, thereby generating significant cost savings
by consolidating buying for air travel, hotel accommodations, car rentals and ground handling services. We
believe that this has also enabled us to offer competitive travel packages to our leisure customers and business
clients, thereby increasing our customer base and revenues. We intend to leverage increased business volumes in
Europe and other international destinations to continue consolidating our product sourcing operations globally,
particularly hotel aggregation and adventure aspects of the leisure segment of our business, to generate cost
savings and improve our profitability. Further, we also intend to continue to consolidate our various other
expenditures like capital expenditure on information technology systems and marketing costs to benefit from
economies of scale.
Capitalizer on our global platform to enhance and cross sell our product and service offerings
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We intend to capitalize on our global platform to enhance and cross sell our products across each of our market
segments in the geographic regions where we operate. For instance, we intend our global platform to provide
ground handling services in destinations used by our outbound customers, thereby maximising profits and
ensuring quality control for our services. Similarly, we also intend to use our product expertise to introduce
similar products in new geographies tailored to suit local requirements and sensibilities. For instance, we are
exploring the possibility of introducing our educational tour products into markets such as India. We also intend
to expand our hotel aggregation business to include non-European hotels, particularly hotels in Australia, India,
the Middle East and the Far East. We also intend to market our Meininger properties to our current customer
base in India and other geographies.
Consolidate our presence in the leisure travel segment in India
We intend to leverage our significant presence in the leisure travel market in India to capitalize on India’s
resilient economy. The rise in disposable income and aspiration levels of Indian consumers make them a key
target segment for our future growth. With international travel becoming progressively more affordable, we
believe that this trend will accelerate, and that there will be an increase in the number of people choosing to
travel outside India for leisure. We also believe that the fragmented travel market in India presents an
opportunity for large organized travel and tour operators, such as us, to capture a greater share of the market. We
continue to expand our ground handling activities in certain overseas locations which cater to our outbound
customers, thus enabling cost reduction and better-personalised services for Indian outbound clients. We believe
that travel tours are increasingly being used by corporates in India to incentivize their employees or their
suppliers and distributors, and we intend to continue leveraging our market position and product offerings to
capitalize on the opportunities presented by this rapidly growing segment of leisure travel.
Further expand our global distribution network
We intend to further expand our distribution network infrastructure across all markets. In India, we seek to
improve market penetration by adding franchised shops that exclusively offer our products and services. In our
franchisee model, the franchisee is permitted to operate a travel outlet based on our business concept with the use
of our brand name. In our international markets, we will continue to focus on boosting our agent network and
call centre sales support. We will also evaluate new jurisdictions in which a local distribution presence (through
branches or representative offices) will contribute to our growth and profitability. We also have made
investments into growing our online channels for conducting travel business. Our websites in various countries
offer comprehensive travel solutions to our online customers, who can purchase airline tickets, make hotel
reservations, obtain logistic support, or purchase tour packages. Our websites also enable users to purchase any
combination of the above and customize their holiday. We believe that our online initiatives allow us to
capitalize on the rise in the number of internet users in these markets and thereby reach a wider customer base.
We intend to grow our PGL and Meininger product offerings in new markets
We believe the education travel segment offers significant growth opportunities, and that we are well positioned
to consolidate our market share in this segment in the UK and Europe. We are also well placed to leverage our
product expertise in this segment to grow our presence in Australia where we have recently introduced PGL and
in other newer markets including India in order to benefit from a first mover advantage. Further, we also intend
to expand our budget accommodation offering targeted at student tour groups and young urban travellers through
our Meininger brand by adding new properties in Europe, where we have signed four new hotel leases that we
expect to be operational within the next two to three years.
Business Description
Our business primarily focuses on the following market segments: Leisure Travel and Education Travel.
Leisure Travel
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Leisure travel has historically been the largest business for us. We provide tour operator services, hotel
aggregation and destination management services under our leisure travel segment. Our tour operator services
principally involve providing outbound packaged tours to customers in Australia, Dubai, India, Japan, the U.K.
and the U.S. travelling on leisure packages to overseas destinations. We also provide packaged tours for
domestic travel to our Indian customers. Our hotel aggregation services focus on offering short break local
packaged tours to customers in the U.K. and the Netherlands. Our destination management services include
ground handling services which cover all aspects of ground tour arrangements, primarily for customers travelling
into Dubai, Europe and India.
Tour Operator Services
Our tour operator services constitute the largest component of our leisure travel business. We design our own
products, comprising customized holiday packages, under exclusive arrangements with direct suppliers and local
agents across the world to suit the travel requirements of group travellers and individuals. Our packages build in
various related services, including air tickets, visa, travel insurance, airport transfer, hotel accommodation and
sightseeing services. Our tour operator services are offered through our offices, franchised shops, our network of
preferred agents, our call centres and through our websites.
We have worldwide coverage in terms of travel destinations. For instance, we arrange leisure trips for our U.K.
customers to destinations in India, Africa, the Far East, the Middle East, Latin America, Australia and
Continental Europe. Likewise, we provide our Australian customers with travel packages to all major European
destinations and various tourist destinations in India, Sri Lanka and the Middle East. We also represent and retail
many international third party products including Star Cruises and Rail Europe that are bundled into our holiday
packages. In addition, we arrange leisure trips within India whether for business travel, holidays, religious
pilgrimages or family visits. We offer several packages ranging from religious pilgrimage tours, education tours,
weekend breaks, activity holidays, spa holidays, budget holidays and summer and beach retreats and touring
holidays.
Our target customer segments for our tour operator services vary from country to country. In India, we offer both
international and domestic tour operator services, across all client segments. In the U.K., U.S., and Japan, we
offer specialized outbound travel services to high-end customers, whereas in Australia and New Zealand, we
offer specialised outbound travel services to mid-market customers. In the UAE, we offer outbound travel across
all client segments.
Hotel Aggregation Services
We offer packaged short breaks into U.K. and Netherlands through our market leading brands Superbreak and
Bookit, respectively. Superbreak typically offers packages for short break holidays within the U.K. and a few
other European locations. The holiday packages offered by Superbreak typically include hotel, transport options
and in some instances theatre tickets, concert and/or event tickets. The brand has a dominant U.K. presence
offering approximately 3,000 U.K. hotels across 1,000 destinations Bookings are made through high street travel
agents, call centres, websites and other affiliate partner channels. Bookit is a leading independent online retailer
of short break holidays in the Netherlands, offering holiday packages which typically include a combination of
accommodation and transport options. Bookit has access to over 2,500 hotels and over 500 bungalow park
destinations in the Benelux, Germany and other European cities
Destination Management Services
We cover all aspects of ground management, including hotel reservations, air or rail ticketing, airport transfers,
landing arrangements, excursion planning, meet and greet services, event planning, meetings and appointments,
conference management and private air charter. We provide destination management services in India, Europe,
Singapore and the UAE under arrangement with various suppliers such as hotels, airlines, transporters, and
guides. In Europe, we provide destination management services under the CKDMS (Cox and Kings Destinations
Management Services) brand. We source significant inbound travel business through our global presence,
through our subsidiaries (India, U.K., Australia, New Zealand, Japan, the U.S. and UAE), branch offices
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(Moscow, Taiwan, Maldives and Tahiti) and representative offices (Spain, Germany, Italy, France, Brazil and
South Africa).
Product Categories under our Leisure Travel Segment
Group Tours. We operate group tours for outbound travel in all our countries of operation in addition to
which we also organise group tours for domestic travel in India. While each tour package is different from the
other in terms of the number of days and destinations, the dates of departure and arrival are fixed in advance.
Apart from selling destination focused packages in all our countries of operations, we also sell interest focused
packages. We organized theme based specialist travel plans for small groups, which brings together a team of
lecturers, all experts in their respective fields and add value to travel itineraries.
Flexible Individual Travellers. We provide customised holidays for flexible individual travellers ("FITs").
These packages which have flexibility and are designed to suit the customer needs unlike group tours which are
standard in nature. We believe this product though complex has good demand and requires better planning and
execution to meet individual needs. These tours are generally booked by people who prefer to travel alone. To
illustrate, the itinerary of a holiday taken by two individuals could be totally different from each other though the
destination may be same. We have experience in handling complex requests associated with FITs and have a
unique internet program that allows and facilitates complex itinerary planning and booking capability. We have
an intensive training program for our staff to enable them to sell complex holidays with efficiency.
Meetings, Incentives, Conferences and Exhibitions in India. We cater to all aspects of conference organising,
business meetings, event management, seminars, exhibitions, product launches and incentives for customers in
India. Every event is designed to meet specific requirements right from the pre-event preparations, during the
event itself and through to post-event settlements. We assist in selection of destinations, providing a choice of
airlines using the most economical route and complete logistic support on ground. Our expertise in this segment
with extensive planning and considerable research ensures our customers have the most comprehensive travel
experience. Leisure travel packages are increasingly being used as an incentive tool by many organisations for
their employees. We work closely with our clients in India to tailor-make a programs best suited to their needs
and budgets. These individual itineraries being created are unique in nature and normally provide us a client with
a long term relationship.
Trade Fairs Customers in India. We also organise group tours for customers in India to attend trade fairs in
countries outside India. Trade fairs for different industries are organised all around the year at different places
and we take participants in such trade fairs with a customised itinerary for their entire schedule. For group tours
organised for our customers to attend trade fairs, we arrange for accommodation, city tours and other add-on
options such as factory visits, buyer-seller meets and an array of value-added services handling the most complex
and exacting business trips anywhere in the world.
Our Brands
India
Brand Markets
Bharat Deko caters to group tours for domestic leisure travel in India and is targeted at
customers in India with families from both the mid-market and affluent segments.
Duniya Dekho caters to group tours for overseas leisure travel targeted at customers in India
with families from both the mid-market and affluent segments.
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Anand Yatra caters specifically to Maharashtrian customers organizing group tours for
domestic leisure travel in India.
Gaurav Yatra caters specifically to Gujarati customers organising group tours to several
European countries.
Flexihol offers customized holiday packages for individual travelers to destinations across
the world.
MICE caters to all aspects of conference organising, business meetings, event management,
seminars, exhibitions, product launches and incentives in India.
Europe
Brand Markets
The brand is known for specialist group leisure travel packages in the U.K.
targeted at customers in the affluent segment (typically in the age group of 50
years and more).
Explore offers specialized soft adventure group tours in the U.K. market
targeted at couples and affluent families (typically in the age group of around 40
years).
Regaldive offers specialist group tour scuba diving operator in the U.K. offering
holidays and diving courses primarily in the Red Sea.
Superbreak, is a leading online provider of packaged short break holidays in
U.K.
Bookit, is a leading online provider of packaged short breaks in Netherlands,
Belgium and Germany
Rest of the World
Brand Markets
Tempo Holidays specialises in fully independent holidays and organised group tours in Australia
targeting customers in the mid-market and affluent segments.
Bentours, specialises in group tours and FIT in Australia operating innovative tours and cruises and
is also considered a leading Scandinavian travel specialist targeting customers in the mid-market
and affluent segments.
Education Travel
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We provide tour packages to students of primary and secondary schools in the U.K. through market leading
brands PGL and NST, respectively. Students who buy packages from our PGL brand participate in residential
outdoor trips to activity centres owned by PGL, located in France, Spain and the U.K. Students buying tours
from our NST brand undertake study visits and tours to destinations across the world. We also own Meininger
Holding GmbH which operates budget hotels for student tour groups and young urban travellers under the brand
Meininger, spread across Austria, Germany, Netherlands, Belgium and the U.K. Our brands EST and Travelplus
cater to accommodations for students seeking higher education in the United Kingdom and German students
seeking gap-year placements, respectively.
PGL
PGL is a market leading brand in the U.K. providing residential outdoor trips to primary school students aged
between eight and 12 years, and operates 25 centres comprising 16 centres across the U.K., seven centres across
France, and one centre in each of Spain and Australia with an aggregate capacity of approximately 9,000 beds.
We own 20 of these centres and lease or hire the remaining five centres. The size of our PGL centres ranges from
40 acres to 250 acres. These centres are equipped with various facilities including student accommodations,
indoor classrooms, meeting rooms, conference halls, swimming pools, football pitches and activity areas. The
activities at the centres are curriculum-based, and personality development activities are conducted by
professional qualified staff at Government accredited centres. These trips are conducted during school terms
typically from February to October. The normal duration of our residential outdoor trips is between three and
five days. Scouts, guides and other youth groups use our PGL centers during the off-season periods (i.e.
weekends). In addition, we also operate residential English language courses for international students during the
off-season months (usually between October to February). The PGL brand currently reaches approximately
5,000 schools in U.K., mostly private schools.
NST
NST is a leading student travel tour operator in U.K., with secondary school students aged between 11 and 16
years, travelling to destinations across the world. We design specialized itineraries for such students to
encompass a broad range of related curriculum topics including drama, music, history, foreign language
immersion.
Meininger
We operate budget hotel properties under the Meininger brand, which caters to student tour groups (such as the
tour groups conducted by NST) and other budget conscious travellers. Each hotel has multiple room
configurations (single bed, twin bed, quad bed or dormitory style beds), and is therefore able to accommodate
different customer segments. Meininger is currently spread across 16 city-centre locations in Europe comprising
nine properties in Germany, four properties in Austria, one property each in Netherlands, Belgium and the U.K.]
with an aggregate capacity of more than 2,000 rooms and 6,000 beds . We intend on adding four new properties
in Berlin, Amsterdam and Paris respectively. All Meininger properties are fully fitted and typically taken on
long-lease from hotel developers.
Other Brands
In addition, to the above, we also have two other specialist brands in the education travel segment – EST and
Travelplus. EST provides customized tours for higher education students in U.K., focused on study visits and
student conferences and Travelplus provides customized tours to student who are planning gap-year travel in
Germany.
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Other Business Segments
In addition to our focus on the leisure and education travel segments, we also provide outsourced visa processing
support across some of our geographies and corporate travel services and foreign exchange services in the Indian
market.
Corporate Travel
We offer customized business travel solutions to our corporate clients through a team of dedicated corporate
relationship managers. Corporate or business travel has witnessed a change from the traditional travel agency
mode to the comprehensive travel management mode, which emphases minimizing the total travel budget for
corporates while maintaining high service standards.
Foreign Exchange
Our foreign exchange division has been licensed by the Reserve Bank of India as authorized dealer-category II.
Our products and services include, retail purchase and sale of foreign currency bank notes and travellers'
cheques, sale of international pre-paid cards, as well as outward remittance facility. Apart from providing service
to the leisure traveller as well as business traveller, the ability to transact in outward remittances provides us with
added revenues from a diverse customer base which include students pursuing studies abroad, persons
undergoing medical treatment overseas, migrant travellers as well as salary and wages to crews on cruise vessels
visiting India.
We are also one of the leading sellers of American Express travellers' cheques in India. Additionally, we are also
one of the leading sellers of foreign currency prepaid cards in India. For example, we sell cards issued by Axis
Bank (travel currency card) which is available in multiple foreign currency types and denomination.
Outsourced Visa Processing business
We provide visa processing services as an outsourced business solution to diplomatic missions in various
countries, performing administrative, logistical and technical tasks related to the processing of visas and
passports, thereby allowing diplomatic missions to focus exclusively on making determinations as to the
applicant’s eligibility. Our current contracts include the Indian embassy in Sweden, Israel, Kuwait, USA, and
operations in India for the Thailand embassy, Japan embassy, Norway embassy and Germany embassy.
We also provide visa services and Marhaba services in India, Russia and Dubai under contract with DNATA.
Distribution
We use different distribution channels for better visibility and sale of our products. In India, we distribute our
products and services through a network of 12 branch sales offices, 143 franchisee sales shops, and 86 sales
agents as of September 30, 2014. Outside India, we operate through our subsidiaries in the U.K. Australia, New
Zealand, Japan, the U.S., UAE, Singapore, Germany, Ireland, France, Spain, Netherlands, Switzerland,
Denmark, Austria, Croatia and Hong Kong. We maintain branch offices in Taiwan, Russia, Maldives and Tahiti,
and representative offices in Russia, Brazil, Germany and South Africa.
We directly retail our products to customer traveller in all our geographies of operations except in Japan, where
we sell premium overseas tour packages to the major wholesale tour operators. The following table sets forth
information relating to our distribution network for our global operations.
We are a shareholder member of Radius Inc, a consortium of leading travel agents present in more than 3,600
locations across approximately 80 countries. The unique strength of Radius lies in its ownership structure of
travel agencies. Most agencies are among the top players in their national markets, ensuring a powerful, expert
local presence hand-in-hand with extensive global coverage. Radius grants membership on an exclusive basis
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with reference to geographical territory. Through Radius, we have access to all businesses in India originating
through other Radius partners outside India through referrals.
We have launched websites in each of our markers for internet sales. These user friendly websites sell our
products real time. We believe that with the number of internet users increasing, the web platform will continue
to help the company to capture additional market of those travellers who prefer to do their travel purchase online.
The website serves as a complete travel solution offering a user the choice to purchase any item from an airline
ticket to a complete tour package. The website also offers a user the choice to purchase any combination of
product. We believe that application of such state of the art web technology allows us to capture a whole new
client base.
Competition
We operate in a highly competitive market. We face stiff competition from other players operating in this sector
and, in some markets like India, from the unorganized sectors which can adversely impact our operations and
profitability. There are several strategies adopted by our competitors to increase their market share through
advertising, pricing, service, new product introductions and distribution reach. Pricing is one of the factors that
plays an important role in our customers' selection of our products. We believe that our brands are well respected
and recognized in the market today. Continuing efforts towards building and sustaining our brands will be
critical for the recognition of our services.
Employees
As of September 30, 2014, we had more than 3,500 permanent employees, 1,700 contract employees,
particularly in our Education Travel segment, comprising approximately 2,000 employees in India and the
remaining located in the United Kingdom, Netherlands, Germany, Australia, Japan, Dubai, the United States,
New Zealand and France.
Insurance
We have a variety of insurance policies currently in effect, including group medi-claim, money insurance, office
asset insurance, directors’ and officers’ liability, commercial general liability and professional indemnity
policies.
Awards and Recognition
Cox and Kings, India
“Favourite Outbound Tour Operator”, The Outlook Traveller Awards, 2014
“Favourite Outbound Tour Operator”, The Outlook Traveller Awards, 2014
“Favourite Specialist Tour Operator – 1st Runner-Up”, Condé Nast Traveller Readers’ Travel Awards, 2013
“Best Outbound Tour Operator”, ITCTA, 2013
“India’s Leading Tour Operator”, The World Travel Awards, 2013
“India’s Leading Travel Agency”, The World Travel Awards, 2013
“Best Outbound Tour Operator”, Hospitality India & Explore the World Annual International Awards, 2013
“Best Inbound Tour Operator”, TAAI Travel Awards, 2013
“Best Company providing Foreign Exchange in India”, CNBC Awaaz Travel Awards, 2013
“Contribution to the Promotion of Taiwan Tourism in 2013”, Taiwan Tourism, 2013
Cox & Kings U.K.
“Best Luxury Operator”, Globe Travel Awards, 2012
“Best Specialist All Inclusive Tour Operator”, British Travel Awards, 2011
“Specialist Tour Operator-runners up”, Telegraph Travel Awards, 2011
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PGL
Quality Mark from the Hospitality Guild for the PGL Hospitality and Catering Foundation Programme
Explore
“Best Medium Holiday Company for Escorted Tours”, British Travel Awards, 2013
“Best Medium Holiday Company for Safari, Wildlife and Nature”, British Travel Awards, 2013
“Best Adventure/Activity Specialist”, Travel Bulletin Star Awards, 2013
Superbreak
“Best Operator UK Holidays”, Travel Weekly, January 2014
"Best UK Holiday Company", SPAA, 2013
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SUBSIDIARIES AND BRANCHES
Details of Subsidiaries (as of September 30, 2014)
S. No. Name of Subsidiary S. No. Name of Subsidiary
1. Cox & Kings (UK) Ltd. 28. Cox & Kings Asia Pacific Travel Ltd
2. C & K Investments Ltd. 29. Cox and Kings Global Services Private Ltd
3. Cox & Kings (Agents) Ltd. 30. Quoprro Global Services Pvt. Ltd.
4. Cox & Kings Finance (Mauritius) Ltd. 31. Cox and Kings Global Services (Singapore)
Pte. Ltd.
5. Cox & Kings Enterprises Ltd. 32. Cox & Kings Global Services Management
(Singapore) Pte. Ltd.
6. Cox & Kings Finance Ltd. 33. Cox & Kings Global Services LLC
7. Cox & Kings Holdings Ltd. 34. Cox and Kings Consulting Service (Beijing)
Co. Ltd.
8. Cox & Kings Shipping Ltd. 35. Quoprro Global Hellas
9. Cox & Kings Special Interest Holidays Ltd. 36. Cox and Kings Gmbh
10. Cox & Kings Tours Ltd. 37. Quoprro Global Services Pte. Ltd.
11. Cox & Kings Travel Ltd. 38. Quoprro Global Services Pvt. Ltd.
12. East India Travel Company Inc. 39. Cox & Kings Egypt
13. ETN Services Ltd. 40. Cox & Kings Global Services Lanka Pvt.
Limited
14. Grand Tours Ltd. 41. Cox and Kings Destinations Management
Services Pvt. Ltd.
15. Clearmine Ltd. 42. Prometheon Enterprise Ltd.
16. Cox & Kings Destination Management
Services Ltd.
43. Prometheon Holdings (UK) Ltd.
17. Cox and Kings (Australia) PTY Ltd. 44. Prometheon Limited
18. Cox and Kings Nordic PTY Ltd. 45. Holidaybreak Limited
19. Tempo Holidays NZ Ltd 46. SASu Le Chateau d’Ebblinghem
20. Tempo Holidays PTY Ltd 47. SARL Chateau d’Ebblinghem
21. Quoprro Global Ltd. 48. PGL Air Travel Ltd.
22. Cox & Kings Global Services Sweden AB 49. PGL Voyages Ltd.
23. Prometheon Holdings Private Ltd 50. PGL Travel Ltd.
24. Prometheon Holdings Ltd 51. PGL Adventure Ltd.
25. Cox & Kings Singapore Pvt. Ltd. 52. Freedom of France Ltd.
26. Cox & Kings Tours LLC 53. Noreya SL
27. Cox & Kings (Japan) Ltd. 54. PGL Adventure SAS
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55. Edge Adventures Limited (formerly known as
Keyline Continental Ltd.)
84. Travelworks UK Limited
56. Simpar Sasu 85. Hole In The Wall Management Limited
57. Chateau de Lamorlaye SCI 86. Holidaybreak Hotel Holdings Limited
58. SCI Domaine de Segries 87. Holidaybreak Hotel Holdings GmbH
59. European Study Tours Ltd. 88. Meininger Amsterdam Amstelstation BV
60. NST Holdings Ltd. 89. PGL Travel PTY Limited
61. NST Travel Group Ltd. 90. PGL Property PTY Limited
62. PGL Group Ltd. 91. PGL Adventure Camps PTY Limited
63. EST Transport Purchasing Ltd. 92. Meininger Amsterdam B.V.
64. Explore Worldwide Ltd. 93. Meininger Shared Services Gmbh
65. Explore Aviation Ltd. 94. Meininger Berlin Hauptbahnhof Gmbh
66. Explore Worldwide Adventures Ltd. 95. Meininger “10” Hamburg Gmbh
67. Regal Diving and Tours Ltd. 96. Meininger Airport Frankfurt Gmbh
68. Superbreak Mini-Holidays Ltd. 97. Meininger Brussels Gmbh
69. Business Reservations Centre Holland BV 98. Meininger West Gmbh & Co. Kg
70. Bookit BV 99. Meininger West Verwaltungs Gmbh
71. BV Weekendjeweg.nl 100. Meininger “10” City Hostel Köln Gmbh
72. Business Reservations Centre Holland
Holding BV
101. Meininger “10” Frankfurt Gmbh
73. Superbreak Mini Holidays Group Ltd. 102. Meininger Nürnberg Gmbh
74. Holidaybreak Trustee Ltd. 103. Meininger “10” City Hostel Berlin-Mitte Gmbh
75. Holidaybreak Holding Company Ltd. 104. Meininger “10” Hostel Und Reisevermittlungs
Gmbh
76. Holidays Ltd. 105. Meininger Airport Hotels Bbi Gmbh
77. Holidaybreak Education Ltd. 106. Meininger Brussels Gmbh
78. NST Ltd. 107. Meininger West Gmbh & Co. Kg
79. NST Transport Services Ltd. 108. Meininger West Verwaltungs Gmbh
80. Holidaybreak Quest Trustee Limtied 109. Meininger “10” City Hostel Köln Gmbh
81. Hotelnet Limited 110. Meininger “10” Frankfurt Gmbh
82. SAS Travelworks France 111. Meininger Oranienburger Straße Gmbh
83. Travelplus Group Gmbh 112. Meininger Nürnberg Gmbh
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113. Meininger “10” City Hostel Berlin-Mitte Gmbh 120. Meininger Hotelerrichtungs Gmbh
114. Meininger “10” Hostel Und Reisevermittlungs
Gmbh
121. Meininger Wien Gmbh
115. Meininger Airport Hotels Bbi Gmbh 122. Meininger Wien Schiffamtsgasse Gmbh
116. Meininger Potsdamer Platz Gmbh 123 Meininger Holiding GmbH
117. Meininger Barcelona Gmbh 124. Meininger Paris SCI
118. Meininger City Hostels & Hotels Gmbh 125. Meininger Finance Company Ltd
119. Meininger Limited
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Details of branches in India
S. No. Location of
Branch
Address
1 Hyderabad Anam Plaza, MCH 8-2-618, Road No 11, Lane Opp Care Hospital, Banjara Hills,
Hyderabad - 500 034
2 Goa 502, Kamat Towers, EDC Complex, Patto Plaza, Panaji, Goa - 403001
3 Bangalore No.22, BMH Complex, K. H. Road, Bangalore - 560 027
4 Kochi Darragh Smail Chambers, 39/6822, 1st Floor, M.G Road, Ravipuram, Kochi -
682015
5 Ahmedabad 20/21, Sanskar Complex, Next to Ketav Petrol Pump,Polytechnic Road, Ambawadi,
Ahmedabad - 380 015.
6 Jaipur Tirathraj Apartment, Ground Floor, Jacob Road, Civil Lines, Jaipur - 302 006
(Rajasthan)
7 Pune Mansurali Towers, 1st Floor, S.No.353 / part II, Behind Axis Bank, Boat Club
Road, Pune - 411001
8 Chennai Karuna Corner 10, Spur Tank Road, Chetpet, Chennai - 600031
9 Kolkata 6, Little Russel Street, Kankaria Estate, Gr. Floor, Kolkata - 700071
10 Mumbai Turner Morrison Building,16 Bank Street, Fort Mumbai - 400001
11 Delhi Alps Building (Central Block), Ground Floor , 56 Janpath, New Delhi - 110001
12 Mumbai Vaman Centre, Makwana Rd, Marol, Andheri-E, Mumbai-400059
13 Delhi Block A & B, Kamal Cinema Commercial Complex, Safdarjung Enclave, New
Delhi - 110029
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REGULATIONS AND POLICIES
The following description is a summary of certain sector specific laws and regulations in India, which are
applicable to us. The information detailed in this chapter has been obtained from publications available in the
public domain. The regulations set out below are not exhaustive, and are only intended to provide general
information to prospective investors and are neither designed nor intended to be a substitute for professional
legal advice.
1. Foreign Exchange Regulations
We are registered with the RBI as an Authorised Dealer – Category II (the Authorised Dealer) under Section 10
of the Foreign Exchange Management Act, 1999 (the FEMA) to deal in foreign exchange. We are required to
undertake all transactions for sale/purchase of exchanges within the authorisation granted by the RBI.
Contravention of the RBI directives or a failure to furnish the prescribed returns can result in the imposition of
penalty under Section 11(3) of the FEMA. In case of any contravention of a provision of the FEMA, or any rule,
regulation, notification, direction or order issued in exercise of the powers under the FEMA or of any condition
subject to which an authorisation is issued by the Reserve Bank, a penalty in accordance with Section 13 of the
FEMA may be imposed. If the contravention has been committed by a company, any person who was in charge
of, or was responsible to the company for the conduct of its business is liable to be punished except if it is proven
that the contravention took place without his knowledge and provided that he had exercised due diligence.
The following are various rules, regulations and policies under the FEMA that are applicable to our Company:
(a) Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000
These regulations provide the limit within which any person may possess or retain foreign currency or foreign
coins. According to this regulation, any authorised person can, within the scope of his authority, possess foreign
currency and coins without limit.
(b) Master Circular on Remittance Facilities for Non-Resident Indians/Persons of Indian Origin/Foreign
Nations (Master Circular No. 8/2014-15 dated 1-7-2014) issued by the RBI
This master circular consolidates the existing instructions on the subject of remittance facilities for non-resident
Indians (NRIs), persons of Indian origin (PIOs) and foreign nationals. Further, this master circular has been
issued with a sunset clause on one year. This circular will stand withdrawn on July 1, 2015 and be replaced with
an updated master circular on this subject.
According to this circular, an Authorised Dealer, among other activities, is permitted to remit money outside
India on behalf of NRIs, PIO and foreign nationals, which has been, among other things, received by the NRIs,
PIO and foreign nationals by way of sale of assets in India, towards salary and educational fees by students going
abroad for studies. Students going abroad for education are treated as NRIs. As NRIs, such students can receive
remittance from India (i) up to U.S.$ 100,000 from close relatives on self declaration, towards maintenance,
which includes remittance towards education also; (ii) up to U.S.$ 1,000,000 per financial year out of sale
proceeds of assets/balances in their account maintained with an Authorised Dealer bank in India; and iii) up to
the limits (currently U.S. $ 125,000) per financial year under a scheme known as the liberalised remittance
scheme (Liberalised Remittance Scheme).
(c) Master Circular on Miscellaneous Remittances from India – Facilities for Residents (Master Circular No.
6/2014-15 dated 1-7-2014) issued by RBI
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This master circular consolidates the existing instructions on the subject of "Miscellaneous Remittances from
India – Facilities for Residents". This master circular has been issued with a sunset clause on one year. This
circular will stand withdrawn on July 1, 2015 and be replaced with an updated master circular on this subject.
The master circular provides that the RBI shall grant licenses to certain entities as Authorised Dealers-Category
II to undertake non trade current account transactions. The circular also specifically provides for the non-trade
current accounts transactions for which Authorised Dealers-Category II are authorised to release/ remit foreign
exchange (such as private visits, remittance by tour operators/ travel agents to overseas agents/principals/hotels,
visa fees, remittance for participation in international events, competitions, etc.)
The circular provides that Authorised Dealers may release foreign exchange for travel purposes on the basis of a
declaration given by a traveller regarding the amount of foreign exchange availed during the financial year. In
case of travellers' cheques, the traveller should sign cheques in the presence of an authorised official and the
purchaser's acknowledgment for receipt of traveller's cheques should be held on record. This circular also
specifies the limit up to which foreign exchange in the form of foreign currency notes and coins may be sold to a
traveller. Further, Authorised Dealers are advised to retain documents relating to the sale of foreign exchange for
a period of one year.
Additionally, an Authorised Dealer may release foreign exchange up to U.S.$ 100,000 on the basis of self-
declaration by an applicant, to enable residents to avail of foreign exchange for medical treatment abroad.
An Authorised Dealer can release foreign exchange for private visits by a person for travel outside India for any
purpose up to the applicable limit specified in the relevant rules.
An Authorised Dealers may remit foreign exchange at the request of a traveller or an agent towards the hotel
accommodation or tour arrangements of a traveller but the remittance should be out of the foreign exchange
purchased by the traveller from an authorised person. An Authorised Dealer may open foreign currency accounts
in the name of agents in India who have arrangement with hotels/ agents abroad. An Authorised Dealer may
allow tour operators to remit cost of rail/ road/ water transportation without the prior approval of the RBI.
The Authorised Dealers may accept payment in cash up to ` 50,000 against sale of foreign exchange. Any
amount exceeding ` 50,000 should be received only by crossed cheque, demand draft or a pay order. Amounts
exceeding ` 50,000 can also be paid by debit/ credit / prepaid cards provided i) the know your customer/ anti
money laundering guidelines are complied with; ii) sale of foreign currency or issue of foreign currency
travellers' cheques is within the limits prescribed by the bank and iii) the purchaser of foreign currency or foreign
currency travellers' cheques and the credit/debit/prepaid card holder is one and the same person. Authorised
Dealers may allow advance remittance for import of services. Authorised Dealer may issue guarantee on behalf
of their customers importing services.
Under the Liberalised Remittance Scheme, an Authorised Dealer may freely allow remittance by a resident
individual of upto U.S.$ 125,000 per fiscal year for permitted current or capital account transactions or a
combination of both.
(d) Master Circular on Memorandum of Instructions governing money changing activities (Master Circular
No. 10/2014-15 dated 1-7-2014) issued by RBI (Money Changing Instructions)
This master circular consolidates the existing instructions on the subject of "Memorandum of Instructions
governing money changing activities". This master circular has been issued with a sunset clause on one year.
This circular will stand withdrawn on July 1, 2015 and be replaced with an updated master circular on this
subject.
Authorised Money Changers (the AMCs) are entities authorised by the RBI under Section 10 of the FEMA to
purchase foreign exchange from residents and non residents visiting India and to sell foreign exchange for
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certain approved purposes. An AMC may either be Full Fledged Money Changer (the FFMC) or Restricted
Money Changer.
In terms of the master circular, an AMC/ franchisee may freely purchase foreign currency notes, coins and
travellers cheques from residents as well as non-residents. AMCs may sell foreign exchange up to the prescribed
ceiling (currently U.S. $ 10,000) specified in Schedule III of the FEMA (Current Account Transaction) Rules,
2000 (the FEMA Rules) during a fiscal year to persons resident in India for undertaking one or more private
visits to any country abroad (except Nepal and Bhutan). AMCs can sell Indian Rupees to foreign tourists or
visitors against international credit cards and promptly reimburse the same. AMCs may convert unspent Indian
currency held by non-residents at the time of their departure from India into foreign currency, provided a valid
encashment certificate is provided. AMCs should issue certificate of encashment when demanded and maintain
proper records. The customers should be notified in cases where the encashment certificate is not issued, that
unspent local currency held by non-residents will only be converted on the production of valid encashment
certificate.
AMCs can purchase foreign currency from other AMCs but the payment for the purchase should be made by
crossed cheques/ demand draft/ bankers cheques or pay orders. AMCs may sell foreign exchange to resident
Indian citizens for taking private visits abroad but on the basis of the declaration given by the traveller. AMCs
may sell foreign exchange to travellers for business travel, conference, etc. The sale of foreign exchange should
only be made on personal application and identification of traveller. Any payment in excess of ` 50,000 should
be received only by crossed cheques/ demand drafts. AMCs should display the rates of exchange at a prominent
place in or near the public counter. AMCs can obtain their normal business requirement of foreign currency from
other AMCs against payment in rupees by account payee crossed cheques or demand drafts. If required, AMCs
should seek the RBI's permission to import foreign exchange into India. AMCs may export excess foreign
currency to an overseas bank or a private money changer through an authorised dealer.
The AMCs should submit to the RBI details of transactions above U.S.$ 10,000 within the tenth calendar day of
each month. The AMCs should have a concurrent audit of the transactions undertaken by them. AMCs should
apply for the renewal of license at least one month in advance of expiry of the license. If the AMCs want to
provide money changing facility at some location other than one given in the license, special permission of the
RBI is required. RBI may revoke the license granted if it is in public interest or if the terms of the license have
not been fulfilled.
The Full Fledged Money Changers (the FFMCs) should submit to the RBI consolidated statement in Form FLM
8. The RBI has permitted the Authorised Dealers and FFMCs to enter into agency/ franchisee agreements with
entities for the purpose of carrying on Restricted Money Changing business i.e. conversion of foreign currency
notes, coins or travellers' cheques into rupees. The approval will be granted by the RBI on a one time basis and
thereafter new franchisee agreements will be reported on a post facto basis. The franchisers are free to determine
the tenor of the arrangement through mutual agreement. Further, the agency/ franchisee agreements much
include provisions on display of exchange rates by the franchisee, names of the franchiser, the surrender of
collection to franchiser (which must be within a maximum period of 7 working days), maintenance of proper
records of transaction by the franchisee and on-site inspection of the franchisee by the franchisor (which must be
conducted at least once every year.
2. Guidelines for recognition
(a) New guidelines for recognition as approved inbound tour operator have been introduced from August 27,
2007, revised with effect from July 18, 2011 (the Inbound Tour Operators Guidelines)
The Inbound Tour Operators Guidelines encourage quality standards and services by inbound tour operators to
promote tourism in India. Some of the important conditions that are to be fulfilled by the inbound tour operator
for grant of recognition by the Ministry of Tourism are that the application should be made and submitted in the
prescribed format and the inbound tour operator must have a minimum paid up capital of ` 300,000 (` 50,000 in
the case of North-Eastern, remote or rural areas), minimum office space of 150 square feet (100 square feet for
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offices in hilly regions), which must be equipped with basic facilities such as telephone, fax and computer
reservation system, reception, etc. and the turnover in foreign exchange by the tour operator must be a minimum
of ` 2.5 million (` 500,000 in the case of North-Eastern, remote or rural areas) and the tour operator should have
been operational for a minimum period of one year before the application. The Inbound Tour Operators
Guidelines require a minimum qualified staff of four, having qualifications prescribed in the guidelines and
minimum office space of between 150 sq.ft (100 sq. ft in case of hilly areas located above 1000 meters above sea
level). The recognition is given for a period of 5 years with subsequent renewal for 5 year periods and the tour
operator, upon award of such recognition, shall be entitled to all concessions and incentives granted by the
Government to tour operators.
(b) New guidelines for recognition as approved adventure tour operator have been introduced from August
27, 2007, revised with effect from January 2, 2012 (the Adventure Tour Operators Guidelines)
The Adventure Tour Operators Guidelines are similar to those prescribed for tour operators. These guidelines
also prescribe additional safety measures for all adventure sports like water sports, aero sports and trekking. The
turnover by the firm from adventure tourism and adventure sports related activities should be a minimum of ` 1
million during the preceding financial year.
(c) New guidelines for recognition as approved domestic tour operator have been introduced from August 27,
2007, revised with effect from July 18, 2011 (the Domestic Tour Operators Guidelines)
The Domestic Tour Operators Guidelines encourage quality standard and services by domestic tour operators to
promote tourism in India. Some of the important conditions that are to be fulfilled by the domestic tour operators
for grant of recognition by the Ministry of Tourism are that the application should be made and submitted in the
prescribed format and the tour operator must have a minimum paid up capital of ` 300,000 (` 50,000 in the case
of North-Eastern, remote or rural areas), minimum office space of 150 square feet (100 square feet for offices in
hilly regions), which must be equipped with basic facilities such as telephone, fax and computer reservation
system, reception, etc., the turnover in foreign exchange of the tour operator from tour operation business must
be a minimum of ` 2 million and the tour operator should have been in operation for a minimum period of one
year before making the application. The benefits and conditions for recognition by the Ministry of Tourism are
similar to those for other tour operators but the domestic tour operator shall employ tour guides trained and
licensed by the Department of Tourism or approved by the state governments.
(d) New guidelines for recognition as an approved travel agent have been introduced from August 27, 2007,
revised on July 18, 2011 (the Travel Agents Guidelines)
The Travel Agents Guidelines prescribe norms that must be observed by a travel agent recgonised by the
Ministry of Tourism. In order to obtain recognition a travel agent must have a minimum paid-up capital (or
capital employed) of ` 300,000 (` 50,000 in the case of North-Eastern, remote or rural areas) and minimum
office space of 150 square feet (100 square feet for offices in hilly regions), which must be equipped with basic
facilities such as telephone, fax and computer reservation system, reception, etc. He must be approved by the
International Air Transport Association (the IATA) or should be a general sales agent/ passenger sales agent of
an IATA member Airlines. The travel agency must employ minimum qualified staff of four persons (two in case
of an office in the north eastern region) at its office. Recognition as an approved Travel Agent shall be valid for
five years, and may be renewed for a further period of five years.
(e) New guidelines for recognition as an approved travel agent have been introduced from August 27, 2007,
and revised on July 18, 2011 (the Tourist Transport Operators Guidelines)
The Tourist Transport Operators Guidelines prescribe minimum norms that must be observed by tourist transport
operators (TTOs) to be recognised by the Ministry of Tourism. In order to be eligible for recognition, the TTO
must, among other things, have conducted operations for a minimum period of one year at the time of
application, have a minimum of six tourist vehicles with appropriate tourist permits, a minimum office space of
at least 150 square feet (100 square feet in case of an office in hilly regions), and a minimum turn-over from
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tourist transport operations of ` 2.5 million (` 1 million for the north eastern region. Recognition as an approved
TTO shall be valid for five years, and may be renewed for a further period of five years.
3. Laws relating to Employment
(a) Shops and establishments related legislations in various states
The provisions of various shops and establishments related legislations, as applicable in various states, regulate
the conditions of work and employment in shops and commercial establishments and generally prescribe
obligations in respect of, among other things, registration, opening and closing hours, daily and weekly working
hours, holidays, leave, health and safety measures and wages for overtime work.
(b) Labour Laws
We are required to comply with various labour laws, including the Payment of Bonus Act, 1965, the Payment of
Wages Act, 1936, the Payment of Gratuity Act, 1972, the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952, Employee State Insurance Act, 1948.
4. Laws relating to Intellectual Property
The Trade Marks Act, 1999 and the Copyright Act, 1957, among other things, govern the law in relation to
intellectual property, including brand names, trade names and service marks and research works.
5. Ministry of Tourism
The main regulator for the travel and tours activity of the Company is the Ministry of Tourism and the
Departments under it. A Department of Tourism license is a prerequisite for any organisation operating in the
tours & travels business.
6. International Air Transport Association
International Air Transport Association (the IATA) develops global commercial standards of the travel and
tourism industry. An accreditation of IATA is necessary to operate as a travel service provider. The purpose of
accreditation is to formally recognise travel agents that are authorised to sell and issue international airline
tickets. It is essential that customers and airlines can rely on these agents for ticketing and the payment procedure
according to required standards. IATA has stringent criteria that are required to be met for accreditation.
Membership with IATA brings several benefits that facilitate operations for travel agents such as the billing and
settlement plan, simplify the selling, reporting and remitting procedures.
7. Reserve Bank of India
The Reserve Bank of India is the body authorised under the Foreign Exchange Management Act, 1999 to issue
licenses to Authorised Dealers to deal in foreign exchange. Authorised Dealers – Category II are required to
submit a monthly consolidated statement for all their offices in form FLM-8 (titled “Summary statement of
purchases and sales of foreign currency notes during the month”) before the tenth day of the following month,
also a statement indicating details of individual purchase transactions of U.S.$ 10,000 or its equivalent or above.
All single branch AMCs having turnover of more than U.S.$ 100,000 or equivalent per month are required to
institute a system of monthly audit. Single branch AMCs having turnover of less than U.S. $ 100,000 or its
equivalent may institute a system of quarterly audit. AMCs having multiple branches, may put in place a system
of concurrent audit which will cover 80 per cent of the transactions value-wise under a system of monthly audit
and rest 20 per cent of the transactions value-wise under quarterly audit. As per the KYC/ AML/ CFT Guidelines
(as defined in paragraph 9 below), any suspicious transaction has to be reported by the Principal Officer (as
defined under paragraph 9 below) to the FIU-IND (as defined under paragraph 9 below).
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8. Service Tax
Our Company is primarily engaged in the business of organised tours and travels and foreign exchange
transactions. The principle services offered by the Company are destination management, inbound and outbound
tourism & travel, business travel and arrangements, domestic holidays, foreign exchange, insurance, etc. In
accordance with relevant tax legislations, the Company is liable to pay service tax on certain services listed
below:
Air travel agent
Tour operator
Banking and other financial services
Event management
Rail travel agent
Business auxiliary services
Franchise services
Travel agent (other than air & rail)
9. Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards / Combating of
Financing of Terrorism (CFT) / Obligation of APs under Prevention of Money Laundering Act, (PMLA),
2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 – Money Changing
activities
Under the master circular on Memorandum of Instructions governing money changing activities (Money
Changing Instructions) issued by RBI, the Company should frame KYC policies which should incorporate i)
customer acceptance policy ensuring inter alia that no transaction is conducted in anonymous/ ficticious/benami
names, parameters of risk perception are clearly defined, documentation requirements meet the requirements of
the PMLA and its amendments, not undertaking transactions where Company is unable to apply customer due
diligence measures; ii) customer identification procedures to be carried out at different stages, including
identification of beneficial owners of the customer; iii) monitoring of transactions; and iv) risk management.
For purchase of foreign currency notes and/ or travellers’ cheques from customers for any amount less
than `50,000/- or its equivalent, photocopies of the identification document need not be obtained. However, full
details of the identification document should be maintained. If the Company has reason to believe that a
customer is intentionally structuring a transaction into a series of transactions below the threshold of `50000/-,
the Company should verify identity and address of the customer and also consider filing a suspicious transaction
report to Financial Intelligence Unit -India (FIU-IND). For purchase of foreign currency notes and/ or travellers’
cheques from customers for any amount equal to or in excess of `50,000/- or its equivalent, the identification
documents should be verified and copies retained. Requests for payment in cash in Indian rupees to resident
customers towards purchase of foreign currency notes and/ or travellers’ cheques from them may be acceded to
the extent of only U.S. $ 1000 or its equivalent per transaction. Requests for payment in cash by foreign visitors /
non-resident Indians may be acceded to the extent of only U.S. $ 3000 or its equivalent. In all cases of sale of
foreign exchange, irrespective of the amount involved, for identification purpose the passport of the customer
should be insisted upon and sale of foreign exchange should be made only on personal application and after
verification of the identification document. A copy of the identification document should be retained by the
Company. Payment in excess of `50,000/- towards sale of foreign exchange should be received only by crossed
cheque/ banker’s cheque / pay order / demand draft.
Relationship with a business entity like a company / firm/ trusts and foundations should be established only after
conducting due diligence by obtaining and verifying suitable documents, and keeping them on record. When a
business relationship is already in existence and it is not possible to perform customer due diligence on the
customer in respect of business relationship, the Company should terminate the business relationship and make a
suspicious transaction report to FIU-IND. As per the Government of India notification, the physical Aadhaar
Card/ letter issued by the Unique Identification Authority of India (UIDAI) containing details of name, address
and Aadhaar number can now be accepted as an officially valid document.
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The Company should develop suitable mechanism through appropriate policy framework for enhanced
monitoring of transactions suspected of having terrorist links and swift identification of the transactions and
making suitable reports to the FIU-IND on priority.
The Company is required to nominate a director on their Board as 'Designated Director', as per the provisions of
the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (Rules), to ensure overall
compliance. The name, designation and address of the Designated Director is to be communicated to the
Director, FIU-IND. The Company should appoint a senior management officer to be designated as Principal
Officer (Principal Officer). The Principal Officer shall be located at the head/corporate office of the Company
and shall be responsible for monitoring and reporting of all transactions and sharing of information as required
under the law. The role and responsibilities of the Principal Officer should include overseeing and ensuring
overall compliance with regulatory guidelines on KYC/ AML/ CFT issued from time to time and obligations
under the Prevention of Money Laundering Act, 2002, as amended by Prevention of Money Laundering
(Amendment) Act, 2009, rules and regulations made there under, as amended from time to time. The Principal
Officer will be responsible for timely submission of cash transaction report and suspicious transaction report to
the FIU-IND.
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BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Board of Directors
The composition of the Board of our Company is governed by the provisions of the Companies Act and the
Listing Agreements. As per the Articles of Association, our Company is required to have not less than 3(three)
Directors and not more than 15 (fifteen) Directors.
Currently, our Company has 6 Directors. The present composition of the Board and its proceedings are in
accordance with the Companies Act and the norms of the code of corporate governance as applicable to listed
companies in India.
The following table sets forth details regarding the Board of Directors as of the date of the Placement Document:
Name of the Director Date of
appointment as
Director and
term
Designation Address Other
Directorships/Members of
Committees
Mr. A.B.M. Good
Occupation: Business
Nationality: Foreign
(British citizen)
Age: 77 years
DIN: 00189453
Director since
1976*
Liable to retire by
rotation
Chairman
Non-
Executive
Director
Clench House,
Wootton Rivers,
Marlborough,
Wiltshire,
Gloustershire,
SN8 4NT, United
Kingdom.
1. Tulip Star Hotels Limited
Mr. Ajay Ajit Peter
Kerkar
Occupation: Business
Nationality: Indian
Age: 50 years
DIN: 00202891
Director since
November 30,
1993**
Liable to retire by
rotation
Non-
Executive
Director
No. 9, South
Lands, 4th
Floor,
Shahid
Bhagatsingh Road,
Colaba, Mumbai –
400 039
1. Sneh Sadan Graphics
Services Private Ltd
2. Royale India Rail Tours
Ltd
Ms. Urrshila Kerkar
Occupation: Business
Nationality: Foreign
(British citizen)
Age: 54 years
DIN: 00021210
Director since
December 1,
2004
Liable to retire by
rotation
Executive
Director
11, Nowroji
Mansion, 31
Woodhouse Road,
N.P. Marg,
Colaba, Mumbai –
400 039
1. Liz Investments Private
Limited
2. Royale India Rail Tours
Ltd
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Mr. Pesi Patel
Occupation: Business
Nationality: Indian
Age: 57 years
DIN: 00016091
Director since
February 5, 1998
Appointed for the
period of 5 years
w.e.f. 01.04.2014
Non-
Executive,
Independent
Director
Lyndewode
House, Bomanji
Petit Road,
Cumbala Hill,
Mumbai – 400
026
1. Tulip Star Hotels Ltd
Mr. Mahalinga
Narayanan
Occupation: Business
Nationality: Indian
Age: 64 years
DIN: 00159288
Director since
June 13, 2007
Appointed for the
period of 5 years
w.e.f. 01.04.2014
Non-
Executive,
Independent
Director
C-4/128,
Safdarjung
Development
Area, New Delhi –
110016
1. Pride Hotels Ltd
2. Gujarat Hotels Ltd
3. Royale India Rail Tours
Ltd
4. Tulip Star Hotels Ltd
Mr. Subhash Chandra
Bhargava
Occupation: Business
Nationality: Indian
Age: 64 years
DIN: 00020021
Director since
October 1, 2007
Appointed for the
period of 5 years
w.e.f. 01.04.2014
Non-
Executive
Independent
Director
B – 1305, Wing,
Dosti Aster (Dosti
Acres), New
Uphill Link Road,
Off. S.M. Road,
Wadala (East),
Mumbai – 400
037
1. A.K.Capital Services Ltd.
2. Aditya Birla Nuvo Ltd
3. Escorts Ltd
4. Jaiprakrash Associates
Ltd.
5. Jaiprakash Power
Ventures Limited
6. Industrial Investment Trust
Limited
7. OTCEI Securities Ltd.
8. IIT Insurance Broking &
Risk Management Pvt. Ltd.
9. Escorts Benefits & Welfare
Trust *Our Company does not have records of any contract/appointment letter/resolution appointing Mr. A.B.M. Good. However,
as per the Registrar of Companies search report dated September 24, 2007, Mr. A.B.M. Good was first appointed in the year
1976.
**Mr. Ajay Ajit Peter Kerkar has been the Director of our Company since November 30, 1993. We, however, do not have the
resolution recording his first appointment into the Board of Directors. However Form 32 has been filed with the Registrar of
Companies in this regard.
Mr. A.B.M Good
Mr. Good is the Promoter & Non- Executive Chairman of the Company.
He was appointed on the Board of our Company, the first time in 1976. He is currently the Chairman of our
Company. Under his management and guidance we have imbibed quality standards and practices.
Mr. Ajay Ajit Peter Kerkar
Mr. Ajay Ajit Peter Kerkar is the Promoter & Non- Executive Director of the Company.
He has been intimately involved in the growth of C&K Group and was responsible for its transformation from
being a business travel and shipping and forwarding agency to being one of the leading leisure players in the
industry. He is the driving force behind the Company’s initiatives in the geographies in which it operates today.
114
He is based in UK and responsible for the Company’s overall leadership, strategy, global centralized buying and
international growth, as part of which he has been actively involved in the identification of newer opportunities.
Under his leadership, the Company is now positioned as the premier travel company in India as well as a brand
leader in the premium market segment in UK, USA and Japan.
Ms. Urrshila Kerkar
Ms. Urrshila Kerkar is the Promoter & Whole Time Director of the Company.
Prior to joining our Company in 1990, Ms. Kerkar was running her own enterprise, a graphic design and
production house. Ms. Kerkar initially worked with the Company in an advisory role on marketing and brochures
design from 1985 and her role was extended when she joined the Company in 1999 and was made in-charge of
Indian Operations.
She has been at the forefront of the Company’s growth, playing a vital role in the development of Out Bound
Leisure and Domestic Leisure business and is the driving force behind the Company’s IT vision. She has been
directly involved and responsible for the day-to-day management of the Company and for all the marketing and
design initiatives of the Group.
Mr. Pesi Patel
Mr. Pesi Patel, is an Independent Director and a member of the Board Audit Committee of the Company.
His started his career with family’s industrial products manufacturing business. He oversaw the sales and
marketing of the products and led the division in manufacturing these products. Ultimately, Pesi gained
responsibility for running the entire business.
Mr. M. Narayanan
Mr. M. Narayanan, is an Independent Director and the Chairman of the Board Audit Committee of the Company.
He had served as Chairman and Managing Director with Tourism Finance Corporation of India Limited in the
past.
Mr. Subhash Chandra Bhargava
Mr. Subhash Chandra Bhargava, is an Independent Director and a member of Board Audit Committee of the
Company.
He has over 40 years of experience and knowledge in the field of Banking and Finance. He had held number of
leadership roles within Life Insurance Corporation of India. He has served as Executive Director (Investment)
with the Life Insurance Corporation of India wherein he was responsible for looking after investment functions
like debt, equity, monitoring corporate sector, investment in infrastructure as well as social sector, which
involved dealing with State Government bodies and Central Government Undertakings etc.
Borrowing powers of the Board
Pursuant to the resolution passed by the shareholders at the Annual General Meeting held on September 26,
2014, through postal ballot and in accordance with the applicable provisions of the Companies Act, the Board
has been authorised to borrow sums of money for the purpose of our business operation on such terms and
conditions as the Board may think fit, provided that money or monies to be borrowed together with the monies
already borrowed by us shall not exceed, at any time, a sum of ` 20,000 million.
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Interest of our Company's Directors
We have been promoted by Mr. A. B. M. Good, Mr Ajay Ajit Peter Kerkar, Ms. Urrshila Kerkar, Ms. Elizabeth
Kerkar and Liz Investments Private Limited. The Promoters may be deemed to be interested in our promotion to
the extent of shares held by them and their relatives. The Promoters may also benefit from holding directorship
in our Company.
All the Directors, including independent Director, may be deemed to be interested to the extent of remuneration
and/or fees, if any, payable to them for attending meetings of the Board and of Committees thereof,
reimbursement of expenses as well as to the extent of commission and other remuneration, if any, payable to
them under the Articles of Association. Some of the Directors may be deemed to be interested to the extent of
consideration received/paid or any loan or advances provided to anybody corporate including companies and
firms, and trusts, in which they are interested as directors, members, partners or trustees. All the Directors,
including independent Directors, may be deemed to be interested in the contracts, agreements/ arrangements
entered into or to be entered into by us with any either the Director himself, other company in which they hold
directorships or any partnership firm in which they are partners, as declared in their respective declarations.
All the Directors may also be deemed to be interested to the extent of equity shares, if any, already held by them
and/or by their friends and relatives in us.
The Directors may also be regarded as interested in the equity shares, if any, held or that may be subscribed by
and allocated to the companies, firms and trusts, if any, in which they are interested as directors, members,
partners, and/or trustees.
The Directors may also be regarded interested to the extent of dividend payable to them and other distributions in
respect of the equity shares, if any, held by them or by the companies/firms/ventures promoted by them.
The Articles of Association provide that the Directors and officers shall be indemnified by us against loss, if any,
in defending any proceeding brought against Directors and officers in their capacity as such, if the indemnified
Director or officer receives judgment in his favor or is acquitted in such proceeding.
The Directors do not have any interest in any property acquired by us in a period of two years before the date the
Placement Document or proposed to be acquired by us as of date of the Placement Document.
No amount of benefit has been paid or given within the two preceding years or intended to be paid or given to
any of our Directors of except the normal remuneration for services rendered.
We have not granted members of the Board any options on our equity shares.
Other confirmations
Except as otherwise stated in this Placement Document, none of the Directors, Promoters or key
managerial personnel of our Company have any financial or other material interest in the Issue.
Terms and Conditions of Employment of the Directors
Executive directors
Ms. Urrshila Kerkar
Pursuant to the Board resolution of August 13, 2012, Ms. Urrshila Kerkar was re-appointed as the whole time
Director of our Company for a period of 5 (five) years with effect from August 31, 2012. Ms. Urrshila Kerkar is
also entitled to a commission which is fixed by the Board or the Remuneration Committee, at the end of each
fiscal year, subject to the overall ceiling stipulated in Section 197 of the Companies Act.
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In addition, Ms. Urrshila Kerkar is entitled to perquisites such as provident fund, gratuity, superannuation and
leave encashment. Also, she is entitled to annual increment which is decided by the Board and the Remuneration
Committee. The annual increment is based on the merit and our performance.
Non-executive directors
The non-executive Directors of our Company are entitled to sitting fees of ` 0.02 million for every meeting of
the Board and every meeting of the Committee attended by the non-executive Director. Further, a non-executive
director is entitled to a commission not exceeding ` 0.7 million per annum.
Shareholding of Directors
The following table sets forth the shareholding of the Directors as of September 30, 2014:
S. No Name of the Director
No. of Equity Shares Percentage
Shareholding
1. Mr. A.B.M Good 6,039,832 4.42
2. Mr. Ajay Ajit Peter Kerkar 2,744,672 2.01
3. Ms. Urrshila Kerkar 4,639,600 3.40
4. Mr. Pesi Patel 168,904 0.12
Change in Board during the last three years
There has been no change in the Board for the past three years.
Remuneration of directors (during the current year and last three financial years)
Name of Director Financial Year 2014 (in `) Financial Year 2013 (in `) Financial Year 2012
(in `)
Ms. Urrshila Kerkar 16,229,615 15,322,000 16,229,615
Commission and fee payment
Name of Director Financial Year 2014 (in
`)
Financial Year 2013 (in
`)
Financial Year 2012 (in
`)
Mr. Pesi Patel 90,000 130,000 160,000
Mr. M. Narayanan 840,000 880,000 860,000
Mr. S. C. Bhargava 840,000 880,000 870,000
Mr. ABM Good 140,000 180,000 140,000
Mr. Peter Kerkar 100,000
150,000 100,000
Corporate Governance
We stand committed to good corporate governance practices based on the principles such as accountability,
transparency in dealings with the stakeholders, emphasis on communication and transparent reporting. We have
complied with all requirements of corporate governance under the Listing Agreement of the Stock Exchanges,
particularly those relating to composition of Board of Directors, constitution of committees, etc.
117
The provisions of the listing agreements to be entered into with the Stock Exchanges with respect to corporate
governance and the SEBI Regulations in respect of corporate governance become applicable to us at the time of
seeking in-principle approval of the Stock Exchanges. We have taken steps to comply with such provisions, as
contained in the Listing Agreements, particularly those relating to composition of Board, constitution of
committees such as Audit Committee, Stakeholders Relationship Committee etc. Further, we undertake to take
all necessary steps to comply with all the requirements of the guidelines on corporate governance and adopt the
corporate governance code as per Clause 49 of the Listing Agreement.
Committees of the Board
Our Company comprises Board level committees which have been constituted and function in accordance with
the relevant provisions of the Companies Act and the listing agreements. These are (i) Audit Committee, (ii)
Stakeholders Relationship Committee (iii) Nomination and Remuneration Committee and (iv) Corporate Social
Responsibility and Governance Committee.
Relation of Key Management Personnel and Directors
Two of the Directors are related to each other. Mr. Ajay Ajit Peter Kerkar is the brother of Ms. Urrshila Kerkar.
None of the key managerial employees named above are related to the Board or any Committee.
Shareholding of Key Managerial Personnel
Except as disclosed below, none of the key managerial employees personnel of the Company hold any of the
Equity Shares as of September 30, 2014:
Sr.
No
Name of the Director
No. of Equity Shares Percentage
Shareholding
1. Mr. Arup Sen 14000 0.01%
2. Mr. Anil Khandelwal 8000 Negligible
3. Mr. Karanjeet Singh Anand 600 Negligible
4. Mr. Viral Gandhi 600 Negligible
5. Ms. Krishna Wattal 400 Negligible
6. Mr. Cyrus Sarkari 200 Negligible
Bonus and/or profit sharing plan for the Key Managerial Personnel
We do not have any bonus or profit-sharing plan for its key managerial personnel. No amount or benefit has been
paid or given within the 2 (two) preceding years or are intended to be given to any of the key managerial
personnel except the normal remuneration for services rendered as directors, officers or employees.
Payment of Benefits to the officers and Directors
Except statutory benefits upon termination of their employment or superannuation, no officer or director of our
Company is entitled to any benefit upon termination of his employment in our Company.
None of our Company's officers or Directors or their relatives have been beneficiaries of loans or advances made
by us. However, our Company has made various loans and advances to certain companies in which the Directors,
Mr. Ajay Ajit Peter Kerkar and Ms. Urrshila Kerkar, hold significant interests. These companies include Ezeego
One Travel and Tours Limited and Far Pavilions Tours and Travels Private Limited.
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As of March 31, 2014, our Company had made advances to the extent of ` 221.6 million to Ezeego One Travel
and Tours Limited. Ezeego One Travel and Tours Limited was also our debtor to the extent of ` 968.8 million as
of March 31, 2014.
Interest of key managerial personnel
All the key managerial personnel may be deemed to be interested to the extent of the remuneration and other
benefits in accordance with their terms of employment for services rendered as officers or employees. Further, all
employees may also be deemed to be interested to the extent of Equity Shares subscribed for by them.
Changes in key managerial personnel
The following key managerial personnel have resigned during the last three years:
Name Designation Date of resignation
Mr. Rahul Rathore Head- Legal September 7, 2011
119
PRINCIPAL SHAREHOLDERS
Our Company was incorporated as 'Eastern Carrying Company Limited' on June 7, 1939 under the Indian
Companies Act, VII of 1913. The name of our Company was subsequently changed to 'Cox and Kings (India)
Limited' and the consequent fresh certificate of incorporation was granted on February 23, 1950. Subsequently,
after the amendment of Section 43A of the Companies Act 1956, the word 'Private' was added to the name of our
Company on October 12, 2001. Pursuant to a special resolution of the shareholders, our Company became a
public limited company and a fresh certificate of incorporation was issued on March 28, 2007 by the Registrar of
Companies. The name was further changed to Cox & Kings Limited and a fresh certificate of incorporation was
issued by the Registrar of Companies on July 29, 2010.
Shareholding Pattern
The following table contains information as of September 30, 2014 concerning our Company's shareholding
pattern:
TOTAL
SHAREHOLDING
AS A % OF
TOTAL NO OF
SHARES
SHARES PLEDGE OR
OTHERWISE
ENCUMBERED
CATEG
ORY
CODE
NO OF
SHAR
EHOL
DERS
TOTAL
NUMBER
OF
SHARES
AS a
PERCE
NTAGE
of (A+B)
As a
PERC
ENTA
GE of
(A+B+
C)
NUMBE
R OF
SHARES
AS a
PERCENT
AGE
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=(VIII)/
(IV)*100
(A) PROMOTER
AND
PROMOTER
GROUP
(1) INDIAN
(a) Individual /HUF 2 5914000 5914000 4.33 4.33 4954000 83.77
(b) Central
Government/State
Government(s)
0 0 0 0.00 0.00 0 0.00
(c) Bodies Corporate 7 48199217 48199217 35.30 35.30 31425060 65.20
(d) Financial
Institutions /
Banks
0 0 0 0.00 0.00 0 0.00
(e) Others 0 0 0 0.00 0.00 0 0.00
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Sub-Total
A(1) :
9 54113217 54113217 39.64 39.64 36379060 67.23
(2) FOREIGN
(a) Individuals
(NRIs/Foreign
Individuals)
2 8784504 8784504 6.43 6.43 2389633 27.20
(b) Bodies Corporate 2 18346560 18346560 13.44 13.44 0 0.00
(c) Institutions 0 0 0 0.00 0.00 0 0.00
(d) Qualified Foreign
Investor
0 0 0 0.00 0.00 0 0.00
(e) Others 0 0 0 0.00 0.00 0 0.00
Sub-Total
A(2) :
4 27131064 27131064 19.87 19.87 2389633 8.81
Total
A=A(1)+A(2)
13 81244281 81244281 59.51 59.51 38768693 47.72
(B) PUBLIC
SHAREHOLDI
NG
(1) INSTITUTIONS
(a) Mutual Funds
/UTI
8 2156740 2156740 1.59 1.58
(b) Financial
Institutions
/Banks
6 2670423 2670423 1.96 1.96
(c) Central
Government /
State
Government(s)
0 0 0 0.00 0.00
(d) Venture Capital
Funds
0 0 0 0.00 0.00
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(e) Insurance
Companies
0 0 0 0.00 0.00
(f) Foreign
Institutional
Investors
80 30609552 30609552 22.42 22.42
(g) Foreign Venture
Capital Investors
0 0 0 0.00 0.00
(h) Qualified Foreign
Investor
0 0 0 0.00 0.00
(i) Others 0 0 0 0.00 0.00
Sub-Total
B(1) :
94 35436715 35436715 25.96 25.96
(2) NON-
INSTITUTIONS
(a) Bodies Corporate 609 8431684 8431684 6.18 6.18
(b) Individuals
(i) Individuals
holding nominal
share capital up to
` 0.10 million
22179 4746936 4746740 3.48 3.48
(ii) Individuals
holding nominal
share capital in
excess of ` 0.10
million
33 4318544 4318544 3.16 3.16
(c) Others
FOREIGN
BODIES
1 857296 857296 0.63 0.63
NON RESIDENT
INDIANS
447 559728 559728 0.41 0.41
CLEARING
MEMBERS
299 361498 361498 0.26 0.26
TRUSTS 1 200 200 0.00 0.00
(d) Qualified Foreign
Investor
0 0 0 0.00 0.00
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Sub-Total
B(2) :
23569 19275886 19275690 14.12 14.12
Total
B=B(1)+B(2) :
23663 54712601 54712405 40.08 40.07
Total (A+B)
:
23676 135956882 135956686 99.59 99.58
(C) Shares held by
custodians,
against which
Depository
Receipts have
been issued
(1) Promoter and
Promoter Group
(2) Public 1 571008 571008 0.42 0.42
GRAND
TOTAL
(A+B+C) :
23677 136527890 136527694 100.00 100.00 38768693 28.40
The following is the list of the Company's top ten shareholders as of September 30, 2014:
S.
No Name of the shareholder Number of shares Percentage (%)
1 Sneh Sadan Graphic Services Limited 33038368 24.20
2 Kubber Investments (Mauritius) Pvt Ltd 18346560 13.44
3 Smallcap World Fund Inc 9592000 7.03
4 Liz Investments Private Limited 15160849 11.10
5 Anthony Bruton Meyrick Good 6039832 4.42
6 ICICI Prudential Life Insurance Company Ltd 4958600 3.63
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7 Urrshila Kerkar 4639600 3.40
8 Macquarie Bank Limited 4586000 3.36
9 India Capital Fund Limited 2840000 2.08
10 Ajay Ajit Peter Kerkar 2744672 2.01
Total 101947481 74.67
The following table sets out the list of the debenture holders holding the highest value of our Company's
outstanding debentures, across all series of non-convertible debentures as of September 30, 2014:
S.
No
Name of the
debenture holder
Number of
debentures
Address of the debenture holder Amount
(in `
million)
Terms of
Issue
1 Life Insurance
Corporation of
India Limited
1300 Investment Department
6th floor, West Wing, Central Office,
Yogakshema, Jeevan Bima Marg,
Mumbai -400021
1300 Secured
2 Axis Bank
Limited
1000 Axis House, 8th Floor, North Wing, B-71,
Bombay Dyeing Mills Compound, Pandurang
Budhkar Marg, Worli, Mumbai - 400 025
1000 Unsecured
3 Life Insurance
Corporation of
India Limited
750 Investment Department
6th floor, West Wing, Central Office,
Yogakshema, Jeevan Bima Marg,
Mumbai -400021
750 Secured
4 Axis Bank
Limited
750 Axis House, 8th Floor, North Wing, B-71,
Bombay Dyeing Mills Compound, Pandurang
Budhkar Marg, Worli, Mumbai - 400 025
750 Secured
5 IDFC Limited* 1000 Naman Chambers, C-32, G-Block,
Bandra Kurla Complex, Bandra (E),
Mumbai- 400051
1000 Secured
6 General Insurance
Corporation Of
India
150 Suraksha, 170, J. Tata Road,
Church Gate, Mumbai
150 Secured
7 Canara Bank 250 Maker Chamber III, 7th floor, Nariman point,
Mumbai -400021
250 Unsecured
*Note: These outstanding debentures have been repaid as of date.
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ISSUE PROCEDURE
Below is a summary intended to present a general outline of the procedure relating to the application payment,
Allocation and Allotment of the Securities. The procedure followed in the Issue may differ from the one
mentioned below and the investors are assumed to have apprised themselves of the same from the Company or
the Book Running Lead Manager. The investors are advised to inform themselves of any restrictions or
limitations that may be applicable to them. For further details, see the sections “Selling Restrictions” and
“Transfer Restrictions”.
Qualified Institutions Placements
The Issue is being made to QIBs in reliance upon Chapter VIII of the SEBI Regulations and Section 42 of
the Companies Act, through the mechanism of a QIP. Under Chapter VIII of the SEBI Regulations and Section
42 of the Companies Act, our Company, being a listed company in India, may issue equity shares to QIBs
provided that:
the shareholders of our Company have adopted a special resolution approving the QIP.
Such special resolution must specify (a) that the allotment of the Equity Shares is proposed to
be made pursuant to the QIP; and (b) the Relevant Date;
the explanatory statement to the notice to the shareholders for convening the general
meeting must disclose the basis or justification for the price (including premium, if any) at
which the offer or invitation is being made;
equity shares of the same class of our Company, which are proposed to be allotted through the
QIP, are listed on the Stock Exchanges that have nation-wide trading terminals for a period of
at least one year prior to the date of issuance of notice to our shareholders for convening the
meeting to pass the above- mentioned special resolution.
the offer must be made through a private placement offer letter and an application form
serially numbered and addressed specifically to the QIB to whom the offer is made and is
sent within 30 days of recording the names of such QIBs;
the aggregate of the proposed issue and all previous QIPs made by our Company in the same
financial year does not exceed five times the net worth (as defined in the SEBI Regulations)
of our Company as per the audited balance sheet of the previous financial year;
our Company shall have completed allotments with respect to any offer or invitation made
earlier by our Company or has withdrawn or abandoned any such invitation or offer made by it;
the offer must not be to more than 200 persons in a financial year. However, an offer to QIBs
will not be subject to this limit of 200 persons. Prior to circulating the private placement
offer letter, our Company must prepare and record a list of QIBs to whom the offer will be
made. The offer must be made only to such persons whose names are recorded by our
Company prior to the invitation to subscribe
our Company complies with the minimum public shareholding requirements set out in the
Securities Contracts (Regulation) Rules, 1957;
the offering of securities by issue of public advertisements or utilisation of any media,
marketing or distribution channels or agents to inform the public about the issue is prohibited;
and
our Company shall offer to each Allottee at least such number of the Securities in the Issue
which would aggregate to `20,000 calculated at the face value of the Securities
At least 10% of the equity shares issued to QIBs must be allotted to Mutual Funds, provided that, if this portion
or any part thereof to be allotted to Mutual Funds remains unsubscribed, it may be allotted to other QIBs.
QIBs are not allowed to withdraw their Bids after the Issue Closing Date.
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Additionally, there is a minimum pricing requirement under the SEBI Regulations. The Issue Price shall not be
less than the average of the weekly high and low of the closing prices of the Equity Shares quoted on the stock
exchange during the two weeks preceding the Relevant Date. Further, pursuant to a resolution of the
shareholders dated November 11, 2014, our Company is eligible to offer a discount of not more than 5% as
may be decided by our Board of Directors on the Floor Price in terms of Regulation 85 of the SEBI Regulations.
The “Relevant Date” referred to above means the date of the meeting in which our Board of Directors decides to
open the Issue and “stock exchange” means any of the recognised stock exchanges in India on which the Equity
Shares of the same class are listed and on which the highest trading volume in such shares has been recorded
during the two weeks immediately preceding the Relevant Date.
The equity Shares will be Allotted within 12 months from the date of the shareholders’ resolution approving the
QIP and within 60 days from the date of receipt of subscription money from the QIBs.
The equity Shares issued pursuant to the QIP must be issued on the basis of the Preliminary Placement
Document and the Placement Document shall contain all material information required under applicable law.
The Preliminary Placement Document and the Placement Document are private documents and will be
provided to only select investors through serially numbered copies and are required to be placed on the website
of the Stock Exchanges and of our Company with a disclaimer to the effect that it is in connection with an issue
to QIBs and no offer is being made to the public or to any other category of investors.
The minimum number of allottees for each QIP shall not be less than:
• two, where the issue size is less than or equal to `2,500 million; and
• five, where the issue size is greater than `2,500 million.
No single Allottee shall be allotted more than 50 % of the Issue size. QIBs that belong to the same group or
that are under common control shall be deemed to be a single Allottee. For details of what constitutes “same
group” or “common control”, see “—Application Process—Application Form” below.
Securities being Allotted pursuant to the Issue shall not be sold for a period of one year from the date of
Allotment, except on the floor of the Stock Exchanges. Allotments made to Foreign Venture Capital Investors
Venture Capital Funds and AIFs in the Issue are subject to the rules and regulations that are applicable to them,
including in relation to lock-in requirements.
The Securities offered hereby have not been and will not be registered under the U.S. Securities Act and will not
be offered or sold within the United States or any other jurisdiction, other than India. For a description of
certain restrictions on transfer of the Equity Shares, see "Transfer Restrictions" on page 136.
The Issue has been authorized by (i) our Board of Directors pursuant to a resolution passed on October 9, 2014,
and (ii) the shareholders, pursuant to a resolution dated November 11, 2014.
Our Company has applied for and received in-principle approval from the Stock Exchanges under Clause 24 (a)
of its Listing Agreements for the listing of the Equity Shares on the Stock Exchanges on November 20, 2014.
Our Company has also delivered a copy of the Preliminary Placement Document and the Placement Document
to the Stock Exchanges.
Our Company shall also make the requisite filings with the RoC and SEBI within the stipulated period as
required under the Companies Act and the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Issue Procedure
1. Our Company and the Book Running Lead Manager circulated serially numbered copies of the
Preliminary Placement Document and the serially numbered Application Form, either in electronic or
126
physical form to the QIBs and the Application Form shall be specifically addressed to each QIB. In
terms of Section 42(7) of the Companies Act, our Company shall maintain complete records of the
QIBs to whom the Preliminary Placement Document and the serially numbered Application Form have
been dispatched. Our Company will make the requisite filings with the RoC and the SEBI within the
stipulated time period as required under the Companies Act.
2. Unless a serially numbered Preliminary Placement Document along with the serially numbered
Application Form is addressed to a particular QIB, no invitation to subscribe shall be deemed to
have been made to such QIB. Even if such documentation were to come into the possession of any
person other than the intended recipient, no offer or invitation to offer shall be deemed to have been
made to such person and any application that does not comply with this requirement shall be treated as
invalid.
3. QIBs may submit an Application Form, including any revisions thereof, during the Issue Period to
the Book Running Lead Manager.
4. The following details were required to be indicated in the Application Form for the QIB:
name of the QIB to whom Securities are to be Allotted;
number of Securities applied for;
price at which they are agreeable to subscribe for the Securities , provided that
QIBs may also indicate that they are agreeable to submit a Bid at “Cut-off Price”,
which shall be any price as may be determined by our Company in consultation with
the Book Running Lead Manager at or above the Floor Price or the Floor Price net of
such discount as approved in accordance with SEBI Regulations;
details of the Depository account(s) to which the Securities should be credited; and
a representation that such QIB is a person resident in India and that it has agreed to
certain other representations set forth in the Application Form.
5. Once a duly completed Application Form is submitted by the QIB, such Application Form
constitutes an irrevocable offer and cannot be withdrawn after the Issue Closing Date. The Issue
Closing Date shall be notified to the Stock Exchanges and the QIBs shall be deemed to have been
given notice of such date after receipt of the Application Form.
6. Bids made by asset management companies or custodians of Mutual Funds shall specifically be in the
names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate Bid
can be made in respect of each scheme of the Mutual Fund.
7. Upon receipt of the Application Form, after the Issue Closing Date, our Company determined the final
terms, including the Issue Price of the Securities to be issued pursuant to the Issue in consultation with
the Book Running Lead Manager. Upon determination of the final terms of the Securities, the Book
Running Lead Manager will send the serially numbered CAN along with this Placement Document to
the QIBs who have been Allocated Securities The dispatch of a CAN shall be deemed a valid, binding
and irrevocable contract for the QIB to pay the entire Issue Price for all the Securities Allocated to such
QIB. The CAN shall contain details such as the number of Securities Allocated to the QIB and payment
instructions including the details of the amounts payable by the QIB for Allotment of the Securities in
its name and the Pay- In Date as applicable to the respective QIB. Please note that the Allocation
will be at the absolute discretion of our Company and will be based on the recommendation of
the Book Running Lead Manager.
8. Pursuant to receiving a CAN, each QIB shall be required to make the payment of the entire
application monies for the Securities indicated in the CAN at the Issue Price, only through electronic
transfer to our Company’s designated bank account by the Pay-In Date as specified in the CAN sent to
the respective QIBs. No payment shall be made by QIBs in cash. Please note that any payment of
127
application money for the Securities shall be made from the bank accounts of the relevant QIBs
applying for the Securities. Monies payable on Securities to be held by joint holders shall be paid
from the bank account of the person whose name appears first in the application. Pending Allotment,
all monies received for subscription of the Securities shall be kept by our Company in a separate bank
account with a scheduled bank and shall be utilised only for the purposes permitted under Companies
Act.
9. Upon receipt of the application monies from the QIBs, our Company shall Allot Securities as per the
details in the CAN sent to the QIBs.
10. After passing the resolution for Allotment and prior to crediting the Securities into the depository
participant accounts of the successful Bidders, our Company shall apply to the Stock Exchanges for
listing approvals. Our Company will intimate to the Stock Exchanges the details of the Allotment and
apply for approvals for listing of the Securities on the Stock Exchanges prior to crediting the
Securities into the beneficiary account maintained with the Depository Participant by the QIBs.
11. After receipt of the listing approvals of the Stock Exchanges, our Company shall credit the
Securities Allotted pursuant to this Issue into the Depository Participant accounts of the respective
Allottees.
12. Our Company will then apply for the final trading approvals from the Stock Exchanges.
13. The Securities that would have been credited to the beneficiary account with the Depository
Participant of the QIBs shall be eligible for trading on the Stock Exchanges only upon the receipt of
final trading and listing approvals from the Stock Exchanges.
14. Upon receipt of intimation of final listing and trading approvals from the Stock Exchanges, our
Company shall inform the Allottees of the receipt of such approval. Our Company and the Book
Running Lead Manager shall not be responsible for any delay or non-receipt of the communication of
the final trading and listing permissions from the Stock Exchanges or any loss arising from such delay
or non-receipt. Final listing and trading approvals granted by the Stock Exchanges are also placed on
their respective websites. QIBs are advised to apprise themselves of the status of the receipt of the
permissions from the Stock Exchanges or our Company.
QIBs
Only QIBs who have not been prohibited by the SEBI from buying, selling or dealing in securities can
participate in this Issue. Accordingly, QIBs for the purposes of this Issue shall comprise:
alternative investment funds, as defined under the Securities and Exchange Board of India (Alternative
Investment Funds) Regulations, 2012 and registered with SEBI (“AIFs”), which are not owned or
controlled by Non-Resident investors;
insurance companies registered with Insurance Regulatory and Development Authority;
insurance funds set up and managed by army, navy or air force of the Union of India;
insurance funds set up and managed by the Department of Posts, India;
Mutual Funds;
pension funds with minimum corpus of ` 250 million;
provident funds with minimum corpus of ` 250 million;
128
public financial institutions as defined in Section 2(72) of the Companies Act;
scheduled commercial banks;
state industrial development corporations;
the National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005
of the Government published in the Gazette of India;
Foreign venture capital investor registered with SEBI;
FPI (Other than category III FPI)/FII and sub account (other than a sub account which is a foreign
corporate or foreign individual) registered with SEBI and
Multilateral and bilateral development financial institution.
In terms of the Securities Exchange Board of India FPI regulations (“SEBI FPI regulations”), an FII who holds
a valid certificate of registration from SEBI shall be deemed to be a registered FPI until the expiry of the block of
three years for which fees have been paid as per the SEBI FII Regulations. An FII shall not be eligible to invest
as an FII after registering as an FPI under the SEBI FPI regulations. As per the SEBI FPI Regulations, the issue
of Equity Shares to a single FPI or an investor group (which means the same set of ultimate beneficial owner(s)
investing through multiple entities) shall be less than 10% of our post-Issue equity share capital.
Further, in terms of the Reserve Bank of India Foreign Portfolio Investor - investment under Portfolio Investment
Scheme, Government and Corporate debt dated March 25, 2014 ("RBI FPI circular"), the total holding by each
FPI shall be below 10% of the total paid-up equity share capital of our Company and the total holdings of all
FPIs put together shall not exceed 24% of the paid-up equity share capital of our Company. The aggregate limit
of 24% may be increased up to the sectoral cap by way of a resolution passed by our Board followed by a special
resolution passed by the Shareholders of our Company and subject to prior intimation to RBI. In terms of the
RBI FPI circular, for calculating the aggregate holding of FPIs in a company, holding of all registered FPIs as
well as holding of FIIs (being deemed FPIs) shall be included. The existing individual and aggregate investment
limits an FII or sub account in our Company is 10% and 24% of the total paid-up equity share capital of our
Company, respectively. The existing investment limit for FIIs in our Company is 49% of the paid up capital of
our Company. FPIs are permitted to participate in the Issue subject to compliance with conditions and
restrictions which may be specified by the Government from time to time.
Eligible non-resident QIBs can participate in the Issue under Schedule 1 of the Foreign Exchange Management
(Transfer or issue of security by a person resident outside India) Regulations, 2000 (“FEMA regulations”) and
shall make the payment of application money through the foreign currency non-resident ("FCNR") account and
not through the special non-resident rupee ("SNRR") account. FIIs (other than a sub-account which is a foreign
corporate or a foreign individual) and FPIs are permitted to participate through the portfolio investment scheme
under Schedule 2 and Schedule 2A of FEMA Regulations respectively, in this Issue. FIIs and FPIs are permitted
to participate in the Issue subject to compliance with all applicable laws and such that the shareholding of the
FPIs do not exceed specified limits as prescribed under applicable laws in this regard. FPIs are permitted to
participate in the Issue subject to compliance with conditions and restrictions which may be specified by the
Government from time to time.
The Issue is being made only to QIBs and the Equity Shares in this Issue are not, in any circumstance,
being offered, and will not be allotted, to persons in any jurisdiction outside India.
Our Company and the Book Running Lead Managers are not liable for any amendment or modification
or change to applicable laws or regulations, which may occur after the date of this Placement Document.
QIBs are advised to make their independent investigations and satisfy themselves that they are eligible to
apply. QIBs are advised to ensure that any single application from them does not exceed the
129
investment limits or maximum number of Equity Shares that can be held by them under applicable
law or regulation or as specified in this Placement Document.
Note: Affiliates or associates of the Book Running Lead Manager who are QIBs may participate in the Issue in
compliance with applicable laws.
Application Process
Application Form
QIBs shall only use the serially numbered Application Forms (which are addressed to them) supplied by our
Company and the Book Running Lead Manager in either electronic form or by physical delivery for the purpose
of making a Bid (including revision of a Bid) in terms of the Preliminary Placement Document.
By making a Bid (including the revision thereof) for the Securities through an Application Form and pursuant
to the terms of the Preliminary Placement Document, the QIB will be deemed to have made the following
representations and warranties and the representations, warranties and agreements made under the “Notice to
Investors”, “Representations by Investors”, “Selling Restrictions “and “Transfer Restrictions” on pages 3, 5,
139 and 136, respectively:
1. Each QIB confirms that it is a QIB in terms of Regulation 2(1)(zd) of the SEBI Regulations and
is not excluded under Regulation 86(1)(b) of the SEBI Regulations, has a valid and existing registration
under the applicable laws in India and is eligible to participate in this Issue;
2. Each QIB acknowledges that it has no right to withdraw its Bid after the Issue Closing Date;
3. Each QIB confirms that if Securities are Allotted through this Issue, it shall not, for a period of one
year from Allotment, sell such Securities otherwise than on the floor of the Stock Exchanges;
4. Each QIB confirms that it is eligible to Bid and hold Securities so Allotted. The QIB further
confirms that the holding of such QIB, does not and shall not, exceed the level permissible as per any
applicable regulations applicable to the QIB;
5. Each QIB confirms that its Bid(s) would not result in triggering an open offer under the Takeover
Code;
6. Each QIB confirms that to the best of its knowledge and belief, the number of Securities Allotted to
it pursuant to the Issue, together with other Allottees that belong to the same group or are under
common control, shall not exceed 50% of the Issue size. For the purposes of this representation:
a. The expression ‘belong to the same group’ shall derive meaning from the concept of
‘companies under the same group’ as provided in sub-section (11) of Section 372 of the
Companies Act 1956; and
b. ‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the
Takeover Code;
7. Each QIB confirms that it shall not undertake any trade in the Securities credited to its beneficiary
account maintained with the Depository Participant until such time that the final listing and trading
approvals for the Securities are issued by the Stock Exchanges.
QIBS MUST PROVIDE THEIR DEPOSITORY ACCOUNT DETAILS, PAN, THEIR DEPOSITORY
PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND
BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. THE NAME GIVEN IN THE
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APPLICATION FORM SHOULD BE EXACTLY THE SAME AS THE NAME IN WHICH THE
DEPOSITORY ACCOUNT IS HELD.
Demographic details such as address and bank account will be obtained from the Depositories as per the
Depository Participant account details given above.
The submission of an Application Form by the QIB shall be deemed a valid, binding and irrevocable offer for
the QIB to pay the entire Issue Price for the Securities (as indicated by the C AN) and becomes a binding
contract on the QIB upon issuance of the CAN by our Company in favor of the QIB.
Submission of Application Form
All Application Forms must be duly completed with information including the number of Securities applied for
along with payment and a copy of the PAN card or PAN allotment letter. The Application Form shall be
submitted to the Book Running Lead Manager either through electronic form or through physical delivery at
any of the following addresses:
Axis Capital Limited
Axis House, 1st Floor
Wadia International Centre
P.B Marg
Mumbai 400025
Fax: +91 22 4325 5599
Contact Person: Mr. G. Venkatesh
Email Address: [email protected]
The Book Running Lead Manager shall not be required to provide any written acknowledgement of the same.
Permanent Account Number or PAN
Each QIB should mention its PAN allotted under the I.T. Act in the Application Form. Applications without
this information will be considered incomplete and are liable to be rejected. QIBs should not submit the GIR
number instead of the PAN as the Application Form is liable to be rejected on this ground.
Pricing and Allocation
Build up of the Book
The QIBs shall submit their Bids (including the revision of bids) within the Issue Period to the Book Running
Lead Manager. Such Bids cannot be withdrawn after the Issue Closing Date. The book shall be maintained by the
Book Running Lead Manager.
Price Discovery and Allocation
Our Company, in consultation with the Book Running Lead Manager, determined the Issue Price. Pursuant to a
resolution of the shareholders dated November 11, 2014, our Company was eligible to offer a discount of not
more than 5% as may be decided by our Board of Directors on the Floor Price in terms of Regulation 85 of the
SEBI Regulations.
Method of Allocation
Our Company shall determine the Allocation in consultation with the Book Running Lead Managers on a
discretionary basis and in compliance with Chapter VIII of the SEBI Regulations.
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Bids received from the QIBs at or above the Issue Price shall be grouped together to determine the total demand.
The Allocation to all such QIBs will be made at the Issue Price. Allocation to Mutual Funds for up to a
minimum of 10% of the Issue Size shall be undertaken subject to valid Bids being received at or above the Issue
Price.
THE DECISION OF OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD
MANAGER IN RESPECT OF ALLOCATION SHALL BE FINAL AND BINDING ON ALL QIBS
MAY NOTE THAT ALLOCATION OF SECURITIES IS AT THE SOLE AND ABSOLUTE
DISCRETION OF OUR COMPANY AND QIBS MAY NOT RECEIVE ANY ALLOCATION EVEN IF
THEY HAVE SUBMITTED VALID APPLICATION FORMS AT OR ABOVE THE ISSUE PRICE.
NEITHER OUR COMPANY NOR THE BOOK RUNNING LEAD MANAGER ARE OBLIGED TO
ASSIGN ANY REASON FOR ANY NON- ALLOCATION.
CAN
Based on the Application Forms received, our Company, in consultation with the Book Running Lead Manager,
in their sole and absolute discretion, shall decide the QIBs to whom the serially numbered CAN shall be sent,
pursuant to which the details of the Securities Allocated to them and the details of the amounts payable for
Allotment of such Securities in their respective names shall be notified to such QIBs. Additionally, a CAN will
include details of the relevant “Cox & Kings– QIP Escrow Account” into which such payments would need to
be made, address where the application money needs to be sent, Pay-In Date as well as the probable
designated date, being the date of credit of the Securities to the respective QIB’s account.
The QIBs would also be sent a serially numbered Placement Document either in electronic form or by physical
delivery along with the serially numbered CAN.
The dispatch of the serially numbered Placement Document and the serially numbered CAN to the QIBs
shall be deemed a valid, binding and irrevocable contract for the QIB to furnish all details that may be
required by the Book Running Lead Managers and to pay the entire Issue Price for all the Securities
Allocated to such QIB.
QIBs are advised to instruct their Depository Participant to accept the Securities that may be
Allotted to them pursuant to the Issue.
Bank Account for Payment of Application Money
Our Company has opened the “Cox & Kings– QIP Escrow Account” with Axis Bank in terms of the
arrangement among our Company, the Book Running Lead Manager and Axis Bank as the Escrow Bank
(“Escrow Account”). The QIB will be required to deposit the entire amount payable for the Securities
Allocated to it by the Pay-In Date as mentioned in, and in accordance with, the respective CAN.
Payments are to be made only through electronic fund transfer.
Note: Payments through cheque or cash are liable to be rejected.
If the payment is not made favoring the “Cox & Kings– QIP Escrow Account” within the time stipulated in the
CAN, the Application Form and the CAN of the QIB are liable to be cancelled.
Our Company undertakes to utilise the amount deposited in “Cox & Kings– QIP Escrow Account” only for the
purposes of (i) adjustment against Allotment of Securities in the Issue; or (ii) repayment of application
money if our Company is not able to Allot Securities in the Issue.
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In case of cancellations or default by the QIBs, our Company and the Book Running Lead Manager have the
right to reallocate the Securities at the Issue Price among existing or new investors at their sole and absolute
discretion.
Designated Date and Allotment of Securities
The Securities will not be Allotted unless the QIBs pay the Issue Price into the “Cox & Kings– QIP Escrow
Account” as stated above.
In accordance with the SEBI Regulations, the Securities in the Issue will be issued and Allotment shall be
made only in dematerialised form to the Allottees. Allottees will have the option to re-materialise the Securities,
if they so desire, as per the provisions of the Companies Act and the Depositories Act.
Our Company, at its sole discretion, reserve the right to cancel the Issue at any time up to Allotment without
assigning any reason whatsoever.
Following the Allotment and credit of Securities into the QIBs’ Depository Participant accounts, our Company
will apply for final listing and trading approvals from the Stock Exchanges.
In the case of QIBs who have been Allotted more than 5% of the Securities in the Issue, our Company shall
disclose the name and the number of the Securities Allotted to such QIB to the Stock Exchanges and the
Stock Exchanges will make the same available on their website as per the requirements under the Listing
Agreements. Our Company shall make the requisite filings with the RoC and the SEBI within the stipulated
period as required under the Companies Act and the Companies (Prospectus and Allotment of Securities)
Rules, 2014. Our Company is required to disclose details such as your name, address and the number of
Securities Allotted to the RoC and the SEBI.
The Escrow Bank shall release the monies lying to the credit of the Escrow Account to our Company on
receipt of final listing and trading approvals from the Stock Exchanges in respect of the Securities.
In the event that our Company is unable to issue and Allot the Securities offered in the Issue or on cancellation
of the Issue, within 60 days from the date of receipt of application money, our Company shall repay the
application money within 15 days from expiry of 60 days, failing which our Company shall repay that
money with interest at the rate of 12 per cent per annum from expiry of the sixtieth day. The application
money to be refunded by our Company shall be refunded to the same bank account from which application
money was remitted by the QIBs.
Other Instructions
Right to Reject Applications
Our Company, in consultation with the Book Running Lead Manager, may reject Bids, in part or in full,
without assigning any reason whatsoever. The decision of our Company and the Book Running Lead Managers
in relation to the rejection of Bids shall be final and binding.
Securities in Dematerialised form with National Securities Depository Limited (“NSDL”) or Central
Depository Services (India) Limited (“CDSL”)
The Allotment of the Securities in this Issue shall be only in dematerialised form (i.e., not in physical
certificates but be fungible and be represented by the statement issued through the electronic mode).
The QIB applying for Securities to be issued pursuant to the Issue must have at least one beneficiary account
with a Depository Participant of either NSDL or CDSL prior to making the Bid. Allotment to the QIB will
be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the QIB.
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Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with
NSDL and CDSL. The Stock Exchanges have electronic connectivity with NSDL and CDSL.
The trading of the Securities to be issued pursuant to the Issue would be in dematerialised form only for all
QIBs in the demat segment of the respective Stock Exchanges.
Our Company will not be responsible or liable for the delay in the credit of Securities to be issued pursuant to
the Issue due to errors in the Application Form or otherwise on part of the QIBs.
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PLACEMENT AND LOCK UP
No assurance can be given as to the liquidity or sustainability of the trading market for the Securities, the
ability of holders of the Securities to sell their Securities or the price at which holders of the Securities will
be able to sell their Securities.
Placement Agreement
The Book Running Lead Manager has entered into a Placement Agreement with our Company, pursuant to
which the Book Running Lead Manager have agreed to manage the Issue and to act as placement agents in
connection with the proposed Issue and procure subscription for the Securities to be placed with the QIBs,
pursuant to Chapter VIII of the SEBI Regulations.
The Placement Agreement contains customary representations, warranties and indemnities from our Company
and the Book Running Lead Manager, and it is subject to termination in accordance with the terms contained
therein.
Applications shall be made to list the Securities issued pursuant to the Issue and admit them to trading on the
Stock Exchanges. No assurance can be given as to the liquidity or sustainability of the trading market for such
Securities, the ability of holders of the Securities to sell their Securities or the price at which holders of the
Securities will be able to sell their Securities.
This Placement Document has not been, and will not be, registered as a prospectus with the RoC and, no
Securities will be offered in India or overseas to the public or any members of the public in India or any other
class of investors, other than QIBs.
From time to time, the Book Running Lead Manager and certain of their affiliates have provided and continue
to provide commercial and investment banking services, particularly acting as an underwriter or lead manager,
to us or our affiliates for which they have received and may in the future receive compensation.
Lock-up
Our Company will not, without the consent of the Book Running Lead Manager, during the period of sixty (60)
calendar days after the date of Allotment of the Securities in the Issue, directly or indirectly: (i) issue, offer,
lend, pledge, sell, contract to sell or issue, sell any option or contract to purchase, purchase any option or
contract to sell or issue, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of
or create any encumbrances in relation to the Securities or any securities convertible into or exercisable or
exchangeable for Securities; (ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Securities or any other securities convertible into or
exercisable as or exchangeable for Securities ; or (iii) publicly announce any intention to enter into any
transaction described in (i) or (ii) above; whether any such transaction described in (i) or (ii) above is to be
settled by delivery of Securities or such other securities, in cash or otherwise. The above restriction shall not
apply to any issuance, sale, transfer or disposition of Securities by the Company (a) pursuant to the Issue; (b)
to the extent such issuance, sale, transfer or disposition is required by any statutory or regulatory authorities or
under Indian law; and (c) the Preferential Issue by the Company to its Promoters.
The Promoters and Promoter Group entities (Mr. A.B.M. Good, Mr. Ajay Ajit Peter Kerkar, Ms. Urrshila
Kerkar, Ms. Elizabeth Kerkar, Liz Investments Private Limited, Sneh Sadan Graphic Services Ltd., and Kubber
Investment (Mauritius) Pvt. Ltd.) have also agreed that they will not, from the date hereof and for a period of up
to sixty (60) days from the Closing Date, without the prior written consent of the Global Coordinator and Book
Running Lead Manager, directly or indirectly: (a) sell, contract to sell, purchase any option or contract to sell,
grant any option to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Equity Shares,
or any securities convertible into or exercisable or exchangeable for Equity Shares or publicly announce an
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intention with respect to any of the foregoing; (b) enter into any swap or other agreement that transfers, directly
or indirectly, in whole or in part, any of the economic consequences of ownership of Equity Shares or any
securities convertible into or exercisable or exchangeable for Equity Shares (regardless of whether any of the
transactions described in clause (a) or (b) is to be settled by the delivery of Equity Shares or such other securities,
in cash or otherwise); or (c) publicly announce any intention to enter into any transaction falling within (a) or (b)
above or enter into any transaction (including a transaction involving derivatives) having an economic effect
similar to that of an issue or offer or deposit of Equity Shares in any depositary receipt facility or publicly
announce any intention to enter into any transaction falling within (a) or (b) above.
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TRANSFER RESTRICTIONS
Due to the following restrictions, investors are advised to consult legal counsel prior to purchasing Securities or
making any resale, pledge or transfer of the Securities.
Purchasers are not permitted to sell the Securities Allotted pursuant to the Issue, for a period of one year from the
date of Allotment, except on the Stock Exchanges. Allotments made to FVCIs, VCFs and AIFs in the Issue are
subject to the rules and regulations that are applicable to them, including in relation to lock-in requirements.
Additional transfer restrictions applicable to the Securities are listed below.
U.S. TRANSFER RESTRICTIONS
The Securities have not been and will not be registered under the U.S. Securities Act and may not be offered or
sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S. Securities Act and applicable state securities laws.
Each purchaser of the Securities in the United States is deemed to have represented, agreed and
acknowledged as follows:
It is a “qualified institutional buyer” (as defined in Rule 144A under the U.S. Securities Act).
It is aware that the sale of the Securities to it is being made in reliance on an exemption under the U.S. Securities
Act.
It is acquiring the Securities for its own account or for the account of one or more eligible U.S. investors (i.e.,
“qualified institutional buyers”, as defined above), each of which is acquiring beneficial interests in the
Securities for its own account.
It understands that the Securities are being offered in a transaction not involving any public offering in the
United States within the meaning of the U.S. Securities Act, that the Securities have not been and will not be
registered under the U.S. Securities Act and that if in the future it decides to offer, resell, pledge or otherwise
transfer any of the Securities, such Securities may be offered, resold, pledged or otherwise transferred in
compliance with the U.S. Securities Act and other applicable securities laws only outside the United States in a
transaction complying with the provisions of Rule 903 or Rule 904 of Regulation S or in a transaction otherwise
exempt from the registration requirements of the U.S. Securities Act.
It will notify any transferee to whom it subsequently offers, sells, pledges or otherwise transfers and the
executing broker and any other agent involved in any resale of the Securities of the foregoing restrictions
applicable to the Securities and instruct such transferee, broker or agent to abide by such restrictions.
It acknowledges that if at any time its representations cease to be true, it agrees to resell the Securities at the
Company’s request.
It is a sophisticated investor and has such knowledge and experience in financial, business and investments as to
be capable of evaluating the merits and risks of the investment in the Securities. It is experienced in investing in
private placement transactions of securities of companies in a similar industries and in similar jurisdictions.
It and any accounts for which it is subscribing to the Securities (i) are each able to bear the economic risk of the
investment in the Securities, (ii) will not look to the Company or the Lead Manager for all or part of any such
loss or losses that may be suffered, (iii) are able to sustain a complete loss on the investment in the Securities,
(iv) have no need for liquidity with respect to the investment in the Securities, and (v) have no reason to
anticipate any change in its or their circumstances, financial or otherwise, which may cause or require any sale or
distribution by it or them of all or any part of the Securities. It acknowledges that an investment in the Securities
involves a high degree of risk and that the Securities are, therefore, a speculative investment. It is seeking to
subscribe to the Securities in this Issue for its own investment and not with a view to distribution.
It has been provided access to the Placement Document which it has read in its entirety.
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It agrees to indemnify and hold the Company and the Lead Manager harmless from any and all costs, claims,
liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of
these representations and warranties.
It will not hold any of the Company or the Lead Manager liable with respect to its investment in the Securities.
It agrees that the indemnity set forth in this paragraph shall survive the resale of the Securities.
Where it is subscribing to the Securities for one or more managed accounts, it represents and warrants that it is
authorized in writing, by each such managed account to subscribe to the Securities for each managed account and
to make (and it hereby makes) the acknowledgements and agreements herein for and on behalf of each such
account, reading the reference to “it” to include such accounts.
It acknowledges that the Company and the Lead Manager and their respective affiliates and others will rely upon
the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if
any of such acknowledgements, representations or agreements is no longer accurate, it will promptly notify the
Company and the Lead Manager.
Each purchaser of the Securities outside the United States is deemed to have represented, agreed and
acknowledged as follows:
It is authorised to consummate the purchase of the Securities in compliance with all applicable laws and
regulations.
It acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed to it that
such customer acknowledges) that the Securities are being issued in reliance upon Regulation S and such
Securities have not been and will not be registered under the U.S. Securities Act.
It certifies that either (a) it is, or at the time the Securities are purchased will be, the beneficial owner of the
Securities and is located outside the United States (within the meaning of Regulation S) or (b) it is a broker-
dealer acting on behalf of its customer and its customer has confirmed to it that (i) such customer is, or at the
time the Securities are purchased will be, the beneficial owner of the Securities, and (ii) such customer is not
located outside the United States (within the meaning of Regulation S).
It is aware of the restrictions of the offer, sale and resale of the Securities pursuant to Regulation S.
The Securities have not been offered to it by means of any “directed selling efforts” as defined in Regulation S.
It understands that the Securities are being offered in a transaction not involving any public offering in the
United States within the meaning of the U.S. Securities Act, that the Securities have not been and will not be
registered under the U.S. Securities Act and that if in the future it decides to offer, resell, pledge or otherwise
transfer any of the Securities, such Securities may be offered, resold, pledged or otherwise transferred in
compliance with the U.S. Securities Act and other applicable securities laws only outside the United States in a
transaction complying with the provisions of Rule 903 or Rule 904 of Regulation S or in a transaction otherwise
exempt from the registration requirements of the U.S. Securities Act.
It is a sophisticated investor and has such knowledge and experience in financial, business and investments as to
be capable of evaluating the merits and risks of the investment in the Securities. It is experienced in investing in
private placement transactions of securities of companies in a similar stage of development and in similar
jurisdictions. It and any accounts for which it is subscribing to the Securities (i) are each able to bear the
economic risk of the investment in the Securities, (ii) will not look to the Company or the Lead Manager for all
or part of any such loss or losses that may be suffered, (iii) are able to sustain a complete loss on the investment
in the Securities, (iv) have no need for liquidity with respect to the investment in the Securities, and (v) have no
reason to anticipate any change in its or their circumstances, financial or otherwise, which may cause or require
any sale or distribution by it or them of all or any part of the Securities. It acknowledges that an investment in the
Securities involves a high degree of risk and that the Securities are, therefore, a speculative investment. It is
seeking to subscribe to the Securities in this Issue for its own investment and not with a view to distribution.
It has been provided access to the Placement Document which it has read in its entirety.
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It agrees to indemnify and hold the Company and the Lead Manager harmless from any and all costs, claims,
liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of
these representations and warranties.
It will not hold any of the Company or the Lead Manager liable with respect to its investment in the Securities. It
agrees that the indemnity set forth in this paragraph shall survive the resale of the Securities.
Where it is subscribing to the Securities for one or more managed accounts, it represents and warrants that it is
authorised in writing, by each such managed account to subscribe to the Securities for each managed account and
to make (and it hereby makes) the acknowledgements and agreements herein for and on behalf of each such
account, reading the reference to “it” to include such accounts.
It acknowledges that the Company and the Lead Manager and their respective affiliates and others will rely upon
the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if
any of such acknowledgements, representations or agreements is no longer accurate, it will promptly notify the
Company and the Lead Manager.
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SELLING RESTRICTIONS
The distribution of this Placement Document, and the offer, sale or delivery of the Securities is restricted by law
in certain jurisdictions. Persons who come into possession of this Placement Document are advised to take legal
advice with regard to any restrictions that may be applicable to them and to observe such restrictions. This
Placement Document may not be used for the purpose of an offer or sale in any circumstances in which such
offer or sale is not authorized or permitted. Each subscriber of the Securities in the Issue will be required to
make, or to be deemed to have made, as applicable, the acknowledgments and agreements as described under
"Transfer Restrictions".
General
No action has been taken or will be taken that would permit a public offering of the Securities to occur in India,
the United States or any other jurisdiction, or the possession, circulation or distribution of this Placement
Document or any other material relating to the Company or the Securities in any jurisdiction where action for
such purpose is required. Accordingly, the Securities may not be offered or sold, directly or indirectly, and
neither this Placement Document nor any offering materials or advertisements in connection with the Securities
may be distributed or published in or from any country or jurisdiction except under circumstances that will result
in compliance with any applicable rules and regulations of any such country or jurisdiction. The Issue will be
made in compliance with the applicable ICDR Regulations. Each purchaser of the Securities in this Issue will be
deemed to have made acknowledgments and agreements as described under “Notice to Investors –
Representation by Investors”, “Selling Restrictions” and “Transfer Restrictions”.
Australia
This Placement Document is not a disclosure document under Chapter 6D of the Corporations Act 2001 (Cth)
(the “Australian Corporations Act”), and has not been lodged with the Australian Securities and Investments
Commission and does not purport to include the information required of a disclosure document under the
Australian Corporations Act. (i) The offer of the Securities under this Placement Document is only made to
persons to whom it is lawful to offer the Securities without disclosure to investors under Chapter 6D of the
Australian Corporations Act under one or more exemptions set out in Section 708 of the Australian Corporations
Act; (ii) this Placement Document is made available in Australia to persons as set forth in clause (i) above; and
(iii) by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (ii) above
and agrees not to sell or offer for sale within Australia any Equity Share sold to the offeree within 12 months
after their issue or transfer to the offeree under this Placement Document.
The Company is not licensed to provide financial product advice in Australia in relation to the Securities. This
Placement Document is intended to provide general information only and has been prepared without taking into
account any particular person’s objectives, financial situation or needs. Investors should, before acting on this
information, consider the appropriateness of this information having regard to their personal objectives, financial
situation or needs. No cooling off period applies in relation to this offer under the Australian Corporations Act.
Cayman Islands
This Placement Document does not constitute an invitation or offer to the public in the Cayman Islands of the
Securities, whether by way of sale or subscription. Securities have not been offered or sold, and will not be
offered or sold, directly or indirectly, to the public in the Cayman Islands. However, Cayman Islands Exempted
and Ordinary Non-Resident Companies and certain other legal entities formed under the laws of but not resident
in the Cayman Islands and engaged in business outside of the Cayman Islands may be permitted to acquire
Securities.
Dubai International Financial Centre
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This Placement Document relates to an exempt offer (an “Exempt Offer”) in accordance with the Offered
Securities Rules of the Dubai Financial Services Authority (the “DFSA”). This Placement Document is intended
for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any
other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with an
Exempt Offer. The DFSA has not approved this Placement Document nor taken steps to verify the information
set out in it, and has no responsibility for it. The Securities to which this Placement Document relates may be
illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Securities offered should
conduct their own due diligence on the Securities. If you do not understand the contents of this Placement
Document, you should consult an authorized financial adviser. For the avoidance of doubt, the Securities are not
interests in a “fund” or a “collective investment scheme” within the meaning of either the Collective Investment
Law (DIFC Law No. 2 of 2010) or the Collective Investment Rules Module of the Dubai Financial Services
Authority Rulebook.
European Economic Area
In relation to each member state of the European Economic Area (a “Member State”) which has implemented the
Prospectus Directive (each, a “Relevant Member State”), the Lead Manager severally and not jointly, or jointly
and severally, represents and warrants that it has not made and will not make an offer to the public of any
Securities which are the subject of the Issue contemplated by this Placement Document may not be made in that
Relevant Member State, except that the Securities may be offered to the public in that Member State at any time
under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant
Member State:
1. to legal entities which are qualified investors, as defined in the Prospectus Directive, as implemented by the
relevant Member State;
2. to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010
Prospective Directive Amending Directive, 150, natural or legal persons (other than qualified investors as
defined in the Prospectus Directive), as permitted under the Prospectus Directive (as defined below), subject to
obtaining the prior consent of the relevant Book Running Lead Managers nominated by the Bank for any such
offer; or
3. in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of the Securities shall result in a requirement for the publication by the Company or
the Lead Manager of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Securities the public” in relation to any securities
in any Relevant Member State means the communication in any form and by any means of sufficient information
on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase any
securities, as the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and
amendments thereto, including the 2010 Prospectus Directive Amending Directive, to the extent implemented in
the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and
the expression “2010 Prospective Directive Amending Directive” means Directive 2010/73/EU and includes any
relevant implementing measure in each Relevant Member State.
Hong Kong
No Securities have been offered or sold, and no Securities may be offered or sold, in Hong Kong, by means of
any document, other than to “professional investors”, as defined in the Securities and Futures Ordinance, Cap.
571 of the laws of Hong Kong (“Securities and Futures Ordinance”) and any rules made under that Ordinance; or
to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or in
other circumstances which do not result in the document being a “prospectus” as defined in the Companies
Ordinance, Cap. 32 of the laws of Hong Kong (“Companies Ordinance”) or which do not constitute an offer to
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the public within the meaning of the Companies Ordinance or an invitation to the public within the meaning of
the Securities and Futures Ordinance. No document, invitation or advertisement relating to the Securities has
been issued or may be issued, which is directed at, or the contents of which are likely to be accessed or read by,
the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to
Securities which are intended to be disposed of only to persons outside Hong Kong or only to “professional
investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. This
Placement Document and the Securities have not been and will not be registered with the Securities and Futures
Commission of Hong Kong and/or the Stock Exchange of Hong Kong. There are no public markets or platforms
in Hong Kong for the purchase or disposal of the Securities. If you are in doubt as to the contents of this
Placement Document, you must immediately seek legal and investment advice from your solicitor, accountant
and/or professional advisors.
India
This Placement Document may not be distributed directly or indirectly in India or to residents of India and any
Securities may not be offered or sold directly or indirectly in India to, or for the account or benefit of, any
resident of India except as permitted by applicable Indian laws and regulations, under which an offer is strictly
on a private and confidential basis and is limited to eligible QIBs and is not an offer to the public. The Issue is a
“private placement” within the meaning of Section 42 of the Companies Act, 2013 since the invitation or offer is
to be made only to QIBs.
This Placement Document is neither a public issue nor a prospectus under the Companies Act, 2013 or an
advertisement and should not be circulated to any person other than to whom the offer is made. This Placement
Document has not been and will not be registered as a prospectus with the Registrar of Companies in India.
Japan
The Securities have not been and will not be registered under the Securities and Exchange Law of Japan (Law.
No. 25 of 1948 as amended) (the “SEL”). The Securities may not be offered or sold, directly or indirectly, in
Japan or to, or for the benefit of, any resident of Japan or to others for re-offering or re-sale, directly or
indirectly, in Japan or to, or for the benefit of any resident of Japan, except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with, the SEL and any other applicable laws,
regulations and ministerial guidelines of Japan. As used in this paragraph, a "resident of Japan" means any
natural person residing in Japan and business offices located in Japan, including any corporation or other entity
organized under the laws of Japan.
Korea
This Placement Document is not, and under no circumstances is to be considered as, a public offering of
securities in Korea for the purposes of the Financial Investment Services and Capital Market Act of Korea (the
“FSCMA”). Neither the Company nor the Book Running Lead Manager may make any representation with
respect to the eligibility of any recipients of this Placement Document to acquire the Securities offered hereby
under the laws of Korea, including but without limitation the Foreign Exchange Transaction Act of Korea and
the regulations thereunder (the “FETA”). The Securities offered hereby have not been registered under the
FSCMA and the Securities may not be offered, sold or delivered, directly or indirectly, or offered or sold to any
person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea (as defined in the
FETA), except otherwise permitted by applicable laws and regulations of Korea, including, without limitation,
the FSCMA and the FETA.
Kuwait
The Issue has not been approved by the Kuwait Central Bank or the Kuwait Ministry of Commerce and Industry,
nor has the Company received authorisation or licensing from the Kuwait Central Bank or the Kuwait Ministry
of Commerce and Industry to market or sell the Securities within Kuwait. Therefore, no services relating to the
offering, including the receipt of applications and/or the allotment of Securities, may be rendered within Kuwait
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by the Company or persons representing the Company unless a licence is obtained from the Kuwait Ministry of
Commerce and Industry in accordance with Law 31 of 1990.
People’s Republic of China
Each of the Book Running Lead Manager and the Company represent, warrants and agrees that:
This Placement Document is not intended to constitute an offer, sale or delivery of shares or other securities
under the laws of the People’s Republic of China (the “PRC”). The Securities have not been and will not be filed
with, or approved by, the China Securities Regulatory Commission or any other regulatory authority in the PRC.
This Placement Document has not been, may not be, issued, circulated or distributed in the PRC and the
Securities have not been and may not be offered, sold, pledged or transferred, directly or indirectly, within the
territory of PRC, to any PRC person or entity unless such person or entity has obtained the requisite approval
from, or has made the appropriate filings with, the relevant PRC authorities.
Qatar
This document does not, and is not intended to, constitute an invitation or an offer of securities in the State of
Qatar (including the Qatar Financial Centre) and accordingly should not be construed as such. The Securities
have not been, and shall not be, offered, sold or delivered at any time, directly or indirectly, in the State of Qatar.
Any offering of the Securities shall not constitute a public offer of securities in the State of Qatar.
By receiving this document, the person or entity to whom it has been provided to understands, acknowledges and
agrees that: (a) neither this Placement Document nor the Securities have been registered, considered, authorized
or approved by the Qatar Central Bank, the Qatar Financial Markets Authority, the Qatar Financial Centre
Regulatory Authority or any other authority or agency in the State of Qatar; (b) neither the Company nor persons
representing the Company are authorized or licensed by the Qatar Central Bank, the Qatar Financial Markets
Authority, the Qatar Financial Centre Regulatory Authority, or any other authority or agency in the State of
Qatar, to market or sell the Securities within the State of Qatar; (c) this Placement Document may not be
provided to any person other than the original recipient and is not for general circulation in the State of Qatar;
and (d) no agreement relating to the sale of the Securities shall be consummated within the State of Qatar.
No marketing of the Securities has been or will be made from within the State of Qatar and no subscription to the
Securities may or will be consummated within the State of Qatar. Any applications to invest in the Securities
shall be received from outside of Qatar. This document shall not form the basis of, or be relied on in connection
with, any contract in Qatar. Neither the Company nor persons representing the Company are, by distributing this
document, advising individuals resident in the State of Qatar as to the appropriateness of investing in or
purchasing or selling securities or other financial products. Nothing contained in this document is intended to
constitute investment, legal, tax, accounting or other professional advice in, or in respect of, the State of Qatar.
Singapore
This Placement Document has not been registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, this Placement Document and any other materials in connection with the offer or sale, solicitation
or invitation for subscription or purchase of Securities, or shares to be issued from time to time by the Company
may not be circulated or distributed, nor may the Securities be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an
institutional investor (as defined in Section 4A of under Section 274 of the SFA Securities and Futures Act,
Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(2) of the SFA, or any
person pursuant to Section 275(1A) of the SFA or (iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Where Securities are subscribed or purchased, they are subject to restrictions on transferability and resale and
may not be transferred or resold in Singapore except as permitted under the SFA, in particular (but not limited
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to), where the shares are acquired under Section 276 of the SFA by a relevant person which is:
(a) a corporation which is not an accredited investor (as defined in Section 4A of the SFA) the sole business
of which is to hold investments and the entire share capital of which is owned by one or more individuals,
each of whom is an accredited investor; or
(b) a trust (which the trustee is not an accredited investor) whose sole purpose is to hold investments and each
beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of
shares and debentures of that corporation or the beneficiaries' rights and interest (howsoever described) in
that trust shall not be transferred within six months after that corporation or that trust has acquired the
shares pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor
(under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any
person pursuant to an offer that is made on terms that such shares, debentures and units of shares and
debentures of that corporation or such rights or interest in that trust are acquired at a consideration of not
less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is
to be paid for in cash or by exchange of securities or other assets and further for corporations, in
accordance with the conditions specified in Section 275 (1A) of the SFA; (2) where no consideration is or
will be given for the transfer; or (3) where the transfer is by operation of law or (4) as specified in Section
276(7) of the SFA.
Switzerland
Neither this Placement Document nor any documents related to the Securities constitute a prospectus within the
meaning of Articles 652a and 1156 of the Swiss Code of Obligations. The Securities will not be listed on the SIX
Swiss Exchange or any other regulated securities market in Switzerland, and consequently, the information
presented in this Placement Document does not necessarily comply with the information standards set out in the
listing rules in SIX Swiss Exchange. Accordingly, the Securities have not been and may not be publicly offered
or sold in Switzerland, as such term is defined or interpreted under the Swiss Code of Obligations. In addition,
the Securities do not constitute a participation in a collective investment scheme in the meaning of the Swiss
Collective Investment Schemes Act (“CISA”) and they are neither subject to approval nor supervision by the
Swiss Federal Banking Commission. Therefore, investors in the Securities do not benefit from protection under
CISA or supervision by the Swiss Federal Banking Commission or any other regulatory authority in Switzerland.
United Arab Emirates (excluding the Dubai International Financial Centre)
The Securities have not been, and are not being, publicly offered, sold, promoted or advertised in the United
Arab Emirates (“U.A.E.”) other than in compliance with the laws of the U.A.E. Prospective investors in the
Dubai International Financial Centre should have regard to the specific notice to prospective investors in the
Dubai International Financial Centre set out above. The information contained in this Placement Document does
not constitute a public offer of securities in the U.A.E. in accordance with the Commercial Companies Law
(Federal Law No. 8 of 1984 of the U.A.E., as amended) or otherwise and is not intended to be a public offer. The
Company and the Securities have not been approved or licensed by or registered with the Central Bank of the
United Arab Emirates, the Emirates Securities and Commodities Authority or any other relevant licensing
authorities or governmental agencies in the U.A.E. This Placement Document has not been approved by or filed
with the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the
Dubai Financial Services Authority. This Placement Document is being issued to a limited number of selected
institutional and sophisticated investors, is not for general circulation in the U.A.E. and may not be provided to
any person other than the original recipient or reproduced or used for any other purpose. If you do not understand
the contents of this Placement Document, you should consult an authorized financial adviser. This Placement
Document is provided for the benefit of the recipient only, and should not be delivered to, or relied on by, any
other person.
United Kingdom
The Lead Manager has represented and agreed that:
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(a) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act
2000 (“FSMA”) with respect to anything done by it in relation to the Securities in, from or otherwise
involving the UK; and
(b) it has only communicated or caused to be communicated and will only communicate or cause to be
communicated in the UK any invitation or inducement to engage in investment activity (within the meaning
of Section 21 of FSMA) received by it in connection with the issue or sale of the Securities in circumstances
in which section 21(1) of FSMA does not apply to the Company.
United States
The Securities have not been and will not be registered under the U.S. Securities Act and, subject to certain
exceptions, may not be offered or sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities
laws.
The Securities are being offered (1) in the United States to “qualified institutional buyers” (as defined in Rule
144A under the U.S. Securities Act) pursuant to Section 4(a)(2) of the U.S. Securities Act and (2) outside the
United States in reliance upon Regulation S.
Each purchaser of the Securities will be deemed to have made the representations, agreements and
acknowledgements as described under “Transfer Restrictions”.
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INDIAN SECURITIES MARKET
The information in this section has been extracted from publicly available documents from various sources,
including the SEBI, the Stock Exchanges, and has not been prepared or independently verified by the Company
or the Book Running Lead Manager, or any of their respective affiliates or advisors.
The information in this section has been extracted from documents available on the website of SEBI and the
Stock Exchanges and has not been prepared or independently verified by our Company or the Book Running
Lead Managers or any of their respective affiliates or advisors.
India has a long history of organized securities trading. In 1875, the first stock exchange was established in
Mumbai.
Indian Stock Exchanges
Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the
Ministry of Finance, Capital Markets Division, under the Securities Contracts (Regulation) Act, 1956 (the
“SCRA”) and the Securities Contracts (Regulation) Rules, 1957 (the “SCRR”). On June 20, 2012, SEBI, in
exercise of its powers under the SCRA and the Securities and Exchange Board of India Act, 1992 from time to
time (the “SEBI Act”), notified the Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2012, which regulate inter alia the recognition, ownership and internal governance
of stock exchanges and clearing corporations in India together with providing for minimum capitalisation
requirements for stock exchanges. The SCRA, the SCRR and the Securities Contracts (Regulation) (Stock
Exchanges and Clearing Corporations) Regulations, 2012 along with various rules, bye-laws and regulations of
the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications for membership
thereof and the manner, in which contracts are entered into, settled and enforced between members of the stock
exchanges.
The SEBI Act empowers SEBI to regulate the Indian securities markets, including stock exchanges and
intermediaries in the capital markets, promote and monitor self-regulatory organisations and prohibit fraudulent
and unfair trade practices. Regulations concerning minimum disclosure requirements by public companies, rules
and regulations concerning investor protection, insider trading, substantial acquisitions of shares and takeover of
companies, buy-backs of securities, employee stock option schemes, stockbrokers, merchant bankers,
underwriters, mutual funds, foreign institutional investors, credit rating agencies and other capital market
participants have been notified by the relevant regulatory authority.
Most of the stock exchanges have their own governing board for self regulation. The BSE and the NSE together
hold a dominant position among the stock exchanges in terms of the number of listed companies, market
capitalization and trading activity.
Listing of Securities
The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws
including the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines and regulations issued
by the SEBI and the listing agreements of the respective stock exchanges. The SCRA empowers the governing
body of each recognised stock exchange to suspend trading of or withdraw admission to dealings in a listed
security for breach of or non-compliance with any conditions or breach of company’s obligations under such
listing agreement or for any reason, subject to the issuer receiving prior written notice of the intent of the
exchange and upon granting of a hearing in the matter. SEBI also has the power to amend such equity listing
agreements and bye-laws of the stock exchanges in India, to overrule a stock exchange’s governing body and
withdraw recognition of a recognized stock exchange.
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SEBI has notified the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 in
relation to the voluntary and compulsory delisting of equity shares from the stock exchanges. In addition, certain
amendments to the SCRR have also been notified in relation to delisting.
Index-Based Market-Wide Circuit Breaker System
In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to
apply daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index-
based market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index
movement, at 10%, 15% and 20%. These circuit breakers, when triggered, bring about a co-ordinated trading
halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by
movement of either the SENSEX of the BSE or the CNX NIFTY of the NSE, whichever is breached earlier.
In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise
price bands of 20% movements either up or down. However, no price bands are applicable on scrips on which
derivative products are available or scrips included in indices on which derivative products are available.
The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility.
Margin requirements are imposed by stock exchanges that are required to be paid by the stockbrokers.
BSE
Established in 1875, it is the oldest stock exchange in India. In 1956, it became the first stock exchange in India
to obtain permanent recognition from the Government under the SCRA. It has evolved over the years into its
present status as one of the premier stock exchanges of India.
NSE
The NSE was established by financial institutions and banks to provide nationwide online, satellite-linked,
screen-based trading facilities with market-makers and electronic clearing and settlement for securities including
government securities, debentures, public sector bonds and units. The NSE was recognised as a stock e xchange
under the SCRA in April 1993 and commenced operations in the wholesale debt market segment in June 1994.
The capital market (equities) segment commenced operations in November 1994 and operations in the
derivatives segment commenced in June 2000. NSE launched the NSE 50 Index, now known as S&P CNX
NIFTY, on April 22, 1996 and the Mid-cap Index on January 1, 1996. The securities in the NSE 50 Index are
highly liquid.
Internet-based Securities Trading and Services
Internet trading takes place through order routing systems, which route client orders to exchange trading
systems for execution. Stockbrokers interested in providing this service are required to apply for permission to
the relevant stock exchange and also have to comply with certain minimum conditions stipulated by SEBI. The
NSE became the first exchange to grant approval to its members for providing internet-based trading services.
Internet trading is possible on both the “equities” as well as the “derivatives” segments of the NSE.
Trading Hours
Trading on both the NSE and the BSE occurs from Monday to Friday, between 9:15 a.m. and 3:30 p.m. IST
(excluding the 15 minutes pre-open session from 9:00 a.m. to 9:15 a.m. that has been introduced recently). The
BSE and the NSE are closed on public holidays. The recognised stock exchanges have been permitted to set
their own trading hours (in the cash and derivatives segments) subject to the condition that (i) the trading hours
are between 9.00 a.m. and 5.00 p.m.; and (ii) the stock exchange has in place a risk management system and
infrastructure commensurate to the trading hours.
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Trading Procedure
In order to facilitate smooth transactions, the BSE replaced its open outcry system with BSE On-line Trading
facility in 1995. This totally automated screen based trading in securities was put into practice nation-wide. This
has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles and
improving efficiency in back-office work.
NSE has introduced a fully automated trading system called National Exchange for Automated Trading, which
operates on strict time/price priority besides enabling efficient trade. National Exchange for Automated Trading
has provided depth in the market by enabling large number of members all over India to trade simultaneously,
narrowing the spreads.
Takeover Regulations
Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the
Takeover Regulations, which provides specific regulations in relation to substantial acquisition of shares and
takeover. Once the equity shares of a company are listed on a stock exchange in India, the provisions of the
Takeover Regulations will apply to any acquisition of the company’s shares/voting rights/control. The Takeover
Regulations prescribes certain thresholds or trigger points in the shareholding a person or entity has in the listed
Indian company, which give rise to certain obligations on part of the acquirer. Acquisitions up to a certain
threshold prescribed under the Takeover Regulations mandate specific disclosure requirements, while
acquisitions crossing particular thresholds may result in the acquirer having to make an open offer of the shares
of the target company. The Takeover Regulations also provides for the possibility of indirect acquisitions,
imposing specific obligations on the acquirer in case of such indirect acquisition.
Prohibition of Insider Trading Regulations
The SEBI Prohibition of Insider Trading Regulations have been notified by SEBI to prohibit and penalize
insider trading in India. An insider is, among other things, prohibited from dealing in the securities of a listed
company when in possession of unpublished price sensitive information.
The SEBI Prohibition of Insider Trading Regulations also provide disclosure obligations for shareholders
holding more than a pre-defined percentage, and directors and officers, with respect to their shareholding in the
company, and the changes therein. The definition of “insider” includes any person who has received or has had
access to unpublished price sensitive information in relation to securities of a company or any person reasonably
expected to have access to unpublished price sensitive information in relation to securities of a company and
who is or was connected with the company or is deemed to have been connected with the company.
Depositories
The Depositories Act provides a legal framework for the establishment of depositories to record ownership
details and effect transfer in book-entry form. Further, SEBI framed regulations in relation to the registration of
such depositories, the registration of participants as well as the rights and obligations of the depositories,
participants, companies and beneficial owners. The depository system has significantly improved the operation
of the Indian securities markets.
Derivatives (Futures and Options)
Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in
February 2000 and derivatives contracts were included within the term “securities”, as defined by the SCRA.
Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a
separate segment of an existing stock exchange. The derivatives exchange or derivatives segment of a stock
exchange functions as a self-regulatory organisation under the supervision of the SEBI.
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DESCRIPTION OF SECURITIES
Set forth below is information relating to the Company's share capital, including a brief summary of certain
provisions of the Memorandum of Association and Articles of Association, the Companies Act, the SCRA and
the other related Indian legislation. The following description of the Securities is subject to and qualified in its
entirety by the Memorandum of Association and Articles of Association, the provisions of the Companies Act
which govern the affairs of the Company and other applicable provisions of Indian law.
General
Description of the Equity Shares
The Equity Shares have been listed on the Stock Exchanges since December 2009.
Dividends
In accordance with the Companies Act, the Board first recommends the payment of a dividend which is then
declared by the shareholders of the Company in a general meeting. The Board, however, is not obligated to
recommend a dividend. Under the Articles of Association and the Companies Act, the shareholders may, at the
AGM, declare a dividend of an amount less than that recommended by the Board, but they cannot increase the
amount of the dividend.
In India, dividends are generally declared as a percentage of the par value of a company's equity shares. The
dividend recommended by the Directors, if any, and subject to the limitations described above, is required to be
distributed and paid to the shareholders in proportion to the paid up value of their Equity Shares, as of the record
date that such dividend is payable, within 30 days of the approval by the shareholders at the AGM. Any dividend
so declared is required to be deposited in a separate bank account within a period of five days from the date of
declaration of such dividend. The amount deposited shall be used for payment of dividends only.
Pursuant to the Articles of Association, the Directors have discretion to declare and pay interim dividends
without shareholder approval. Under the Companies Act, dividends can only be paid in cash to the registered
shareholder on a record date fixed on or prior to the AGM or to its order or its banker's order. No shareholder is
entitled to a dividend while any lien in respect of unpaid calls on any of such shareholder's Equity Shares is
outstanding.
The Companies Act provides that any dividends that remain unpaid or unclaimed after the 30-day period referred
to above must be transferred to a special bank account within seven days. The Company is required to transfer
any dividends that remain unclaimed for seven years from the date of transfer to the special bank account to a
fund created by the Indian Government which promotes investor awareness and protection of investors' interests.
Following transfer to the Indian Government, such unclaimed dividends cannot be claimed by the shareholders.
No claim shall lie against such fund or us in respect of the amounts transferred.
Subject to certain conditions laid down by Section 123 of the Companies Act no dividend can be declared or
paid by a company for any fiscal year except out of the profits of the company for that year, calculated in
accordance with the provisions of the Companies Act or out of the profits of the company for any previous fiscal
year(s) arrived at as laid down by the Companies Act. Further, as per the Companies (Declaration and
Payment of Dividend) Rules, 2014, in the absence of profits in any year, company may declare dividend out
of surplus, provided: (a) the rate of dividend declared shall not exceed the average of the rates at which dividend
was declared by it in the three years immediately preceding that year; (b) the total amount to be drawn from
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such accumulated profits shall not exceed one-tenth of the sum of its paid up share capital and free reserves as
per the latest audited balance sheet; (c) the amount so drawn shall be first utilized to set off the losses incurred
in the financial year in which the dividend is declared before any dividend in respect of equity shares is
declared; (d) the balance of reserves after such withdrawal shall not fall below 15% of its paid up share capital
as per the latest audited balance sheet of the company; and (e) no company shall declare dividend unless
carried over previous losses and depreciation not provided in previous years are set off against profit of the
company of the current year the loss or depreciation, whichever is less, in previous years is set off against the
profit of the company for the year for which the dividend is declared or paid.
Provisions on changes in capital
The authorised capital of the Company can be altered by an ordinary resolution of the shareholders in a general
meeting. The Companies Act and the Articles of Association permit the Company to consolidate or subdivide the
par value of the Equity Shares pursuant to an ordinary resolution passed in a general meeting, provided the
nominal value of the Equity Shares cannot be in fractions.
The shareholders of the Company by a resolution of June 7, 2011 passed through postal ballot approved the sub-
division of the nominal value of the equity share capital from ` 10 each paid per equity shares into two equity
shares of ` 5 each paid up.
Pre-emptive rights and issue of additional shares
Subject to the provisions of the Companies Act, our Company may increase its share capital by issuing new
shares on such terms and with such rights as it, by action of its shareholders in a general meeting may
determine. According to Section 62(1)(a) of the Companies Act such new shares shall be offered to existing
shareholders in proportion to the amount paid up on those shares at that date. The offer shall be made by notice
specifying the number of shares offered and the date (being not less than 15 days and not exceeding 30 days
from the date of the offer) within which the offer, if not accepted, will be deemed to have been declined. After
such date the Board may dispose of the shares offered in respect of which no acceptance has been received
which shall not be disadvantageous to the shareholders of our Company. The offer is deemed to include a right
exercisable by the person concerned to renounce the shares offered to him in favor of any other person.
Under the provisions of Section 62(1)(c) of the Companies Act, new shares may be offered to any persons
whether or not those persons include existing shareholders, either for cash of for a consideration other than cash,
if the price of such shares is determined by the valuation report of a registered valuer subject to such conditions
as may be prescribed, if a special resolution to that effect is passed by our Company’s shareholders in a general
meeting.
The Articles of Association of our Company does give the shareholders of the Company the pre-emptive right to
subscribe for new Equity Shares in proportion to their respective existing shareholdings.
General Meetings of Shareholders
There are two types of general meetings of shareholders: (i) AGMs and (ii) EGMs. The Company is required to
convene an AGM within six months after the end of each fiscal year, and with an intervening period of no more
than fifteen months between AGMs. The Company may also, in accordance with its Articles of Association,
convene an EGM of shareholders when necessary or at the request of a shareholder or shareholders holding on
the date of the request at least 10% of the paid-up capital carrying voting rights. Written notice setting out the
agenda of the AGM/EGM must be given at least 21 clear days prior to the date of the general meeting to the
shareholders of record.
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A general meeting may be called after providing a shorter notice if consent is received from all shareholders
entitled to vote, in the case of an AGM, and from shareholders holding not less than 95% of the paid-up capital
in the case of any other general meeting. Shareholders who are registered as such on the date of the general
meeting are entitled to attend and vote at the meeting.
The AGM is held at the registered office or at such other place within Mumbai, the city where the registered
office is situated. Meetings other than the AGM may be held at any other place if so determined by the Board.
The registered office of the Company is located at Turner Morrison Building, 1st Floor, 16 Bank Street, Fort,
Mumbai – 400 001, Maharashtra, India.
Quorum
The Articles of Association provide that a quorum of a general meeting shall be at least five shareholders entitled
to vote and present in person.
Voting Rights
At a general meeting, upon a show of hands, every member holding shares and entitled to vote and present in
person has one vote. Upon a poll, the voting rights of each shareholder entitled to vote and present in person or
by proxy is in the same proportion as the capital paid up on each share held by such holder bears to our
Company’s total paid up capital. Voting is by a show of hands, unless a poll is ordered by the Chairman of the
meeting The Chairman of the meeting has a casting vote.
Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require
that the votes cast in favor of the resolution must be at least three times the votes cast against the resolution.
A shareholder may exercise his voting rights by proxy to be given in the form required by the Articles of
Association. The instrument appointing a proxy is required to be lodged with our Company at least 48 hours
before the time of the meeting. A proxy may not vote except on a poll and does not have a right to speak at
meetings
Shares with Differential Voting Rights
The Companies Act permits a company to issue shares with differential rights as to dividends, voting or
otherwise subject to certain conditions. For a company to issue shares with differential voting rights, it should
have distributable profits (as specified under the Companies Act) for a period of three fiscal years, it should not
have defaulted in filing annual accounts and annual returns for the immediately preceding three years, and the
articles of association of the company should permit the issuance of such shares with differential voting rights.
Register of Shareholders and Record Dates
The Company maintains a register of shareholders, and all transfers of Equity Shares should be notified to the
Company at its head office address. The register of index and beneficial owner maintained by a Depositary under
the Depositories Act is deemed to be an index of members and register and index of debenture holders. The
Company recognises as shareholders only those persons who appear on its register of shareholders and do not
recognise any person holding any Equity Share or part of it upon any trust, express, implied or constructive,
except as permitted by law. In the case of Equity Shares held in physical form, the Company register transfer of
Equity Shares on the register of shareholders upon lodgement of the share transfer form duly complete in all
respects accompanied by a share certificate, or, if there is no certificate, the letter of allotment in respect of
Equity Shares to be transferred together with duly stamped transfer forms. In respect of electronic transfers, the
Depositary transfers Equity Shares by entering the name of the purchaser in the books of the Company as the
beneficial owner of the Equity Shares. The Company then enter the name of the Depositary in the records of the
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Company as the registered owner of the Equity Shares. The beneficial owner is entitled to all the rights and
benefits as well as the liabilities with respect to the Equity Shares that are held by the depositary.
For the purpose of determining the shareholders entitled to annual dividends, the register is closed for a specified
period prior to the annual general meeting. The date on which this period begins is the record date.
To determine which shareholders are entitled to specified rights, the Company may close the register of
shareholders. The Company is required to give at least seven days' prior notice to the public and seven working
days' prior notice to the Stock Exchange before such closure. The Company may not close the register of
shareholders for more than 30 consecutive days and in no event for more than 45 days in a year. Trading of the
Equity Shares on the Stock Exchanges, however, may continue while the register of shareholders is closed.
Postal Ballot
Under the provisions of the Companies Act, certain resolutions, such as those listed below, must be voted on
only by a postal ballot:
amendments of the Memorandum of Association to alter the objects;
the issuance of Equity Shares with deferential rights;
the sale of the whole or substantially the whole of an undertaking by the Company;
varying the rights of the holders of any class of shares or debentures; and
buy-backs of Equity Shares.
Convertible Securities/Warrants
The Company may issue from time to time debt instruments that are partly and fully convertible into Equity
Shares and/or warrants to purchase Equity Shares subject to the SEBI Regulations. These provisions regulate the
conversion pricing of such convertible instruments issued on a preferential basis and also the tenor of such
convertible instruments.
Audit and Annual Report
A company's audited financial statements, the directors' report and the auditors' report must be approved at the
AGM. These documents also include certain other financial information, a report on corporate governance and
management's discussion and analysis of the financial results of the Company. These documents need to be made
available for inspection at the Registered Office during normal working hours for 21 days prior to the annual
general meeting.
Under the Companies Act, the Company is required to send a copy of every profit and loss account and balance
sheet (including the auditor's report and every other document required by law to be annexed or attached to the
balance sheet) to its shareholders, every trustee, holders of any debentures issued by it and all other applicable
persons, at least 21 clear days before the meeting at which the same are to be laid before its shareholders.
Under the Companies Act, the Company is required to file the balance sheet and the annual profit and loss
account presented to its shareholders within 30 days of the conclusion of the AGM with the Registrar of
Companies. The Company is required to file an annual return, which includes a list of the shareholders, and other
information within 60 days of the conclusion of the AGM of the Company. Copies of annual reports are also
required to be sent to the Stock Exchanges.
Under the listing agreements with the Stock Exchanges, the Company must furnish to them quarterly and semi-
annual unaudited results within 45 days after the end of each accounting quarter. The Company can opt to
publish audited results for the fourth quarter of the fiscal year along with the audited financial statements of the
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entire year within 60 days of the end of the fiscal year. The Company is required to publish its financial results in
at least one English language daily newspaper circulating in the whole or substantially the whole of India and
also in one newspaper published in the language of the region where the Registered Office is situated.
Transfer of Equity Shares
Equity Shares held through a Depository are transferred in the form of book entries or in electronic form in
accordance with regulations specified by the SEBI. These regulations provide the regime for the functioning of
Depositories and the participants and set forth the manner in which the records are to be kept and maintained and
the safeguards to be followed. Transfers of beneficial ownership of Equity Shares held through a Depositary are
exempt from stamp duty. The Company have entered into an agreement for such depositary services with
National Securities Depositary Limited and the Central Depositary Services (India) Limited.
Buy-Back
Under Section 68 of the Companies Act and the SEBI (Buy Back of Securities Regulations 1998), a company
may, if authorised by its articles of association, buy its shares out of its free reserves or securities premium
account or the proceeds of any shares or other specified securities, provided that no buy back of any kind of
shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind. If such
buy-back constitutes more than 10% of the total paid-up equity capital and free reserves of the company, it shall
require the approval of at least 75% of its shareholders present and voting at a general meeting of shareholders of
such company. A resolution of the board of directors will constitute sufficient corporate authorisation for a buy-
back below the 10% limit discussed above.
A company cannot buy-back more than 25% of its equity shares in a single fiscal year. Further, the total
consideration for the buy-back cannot exceed more than 25% of the paid-up capital and free reserves of a
company.
A company is not permitted to make any further issue (including a rights issue) of the same kind of shares within
a period of one year of such buy-back, except by way of a bonus issue or in discharge of certain existing
obligations such as the conversion into equity of warrants, stock options or preference shares.
The buy-back may be from (a) existing shareholders on a proportionate basis through a tender offer; (b) the open
market through a book-building process or the stock exchange; or (c) odd-lot holders. Provided that no offer of
buy-back for 15% or more of the paid up capital and free reserves of the company shall be made from the open
market Buy-backs by a company listed on a stock exchange through negotiated deals, whether on or off the stock
exchange or through spot transactions or through any other private arrangements, are not permitted.
Liquidation Rights
Subject to the rights of any creditors, employees and the holders of any shares entitled by their terms to
preferential repayment over the Equity Shares, in the event of the winding-up of the Company, shareholders are
entitled to be repaid the amounts of capital paid up or credited as paid up on the Equity Shares. All surplus assets
remaining after payments are made to employees, statutory creditors, secured and unsecured creditors and the
holders of any preference shares shall be made to the holders of equity shares in proportion to the amount paid up
or credited as paid-up on such equity shares, at the commencement of the winding up.
Board of Directors
Election
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The Articles of Association provide that the number of directors of the Company shall be not less than three and
not more than fifteen. In the general meeting of the Company, the Company may by special resolution, and
subject to provisions of the Articles of Association and Section 149 of the Companies Act, increase or reduce the
number of its Directors.
Notice and Quorum
Under the Articles of Association, and subject to Section 174 of the Companies Act, the quorum for a meeting of
the Board of the Company shall be one-third of the number of directors or two directors, whichever is higher;
provided that any time where the number of interested directors exceeds or is equal to two-thirds of the total
number of directors, the remaining disinterested directors present at the meeting and being not less than two in
number, shall constitute a quorum during such meeting. Notice of every meeting of the Board or committee
thereof shall be given in writing to every director for the time being in India and at his usual address in India and
to every other director.
Interested Directors
Interested directors are not allowed to take part in the discussion of, or vote on, any arrangement if the director is
in any way, directly or indirectly, interested in the arrangement. In addition, each interested director is required
to disclose the nature of his interest under Section 184 of the Companies Act.
Under Section 188 of the Companies Act, the consent of the Board is required where a director, his relative, a
firm in which such director or relative is a partner, any other partner in such firm or a private company of which
the director is a member or director proposes to enter into certain contracts with us. A special resolution of
members is also required if the thresholds prescribed in the Companies Act are to be exceeded for any such
transaction.
Qualifying Shares
Directors of the Company are not required to hold any Equity Shares to be qualified to serve on the Board of the
Company.
Borrowing Powers
The Directors may raise, borrow or secure the payment of any sums of money for the purposes as they deem
appropriate, provided that, in accordance with Section 180 of the Companies Act, without the consent of a
majority of the shareholders in a general meeting, the aggregate principal amount outstanding in respect of
monies raised, borrowed or secured by us may not exceed the aggregate of the paid-up share capital plus free
reserves of the Company.
Director Compensation
Director, other than the whole-time paid directors may be paid such fees as may be prescribed under Indian law
and as approved by the board of directors for each meeting of the board of directors or a committee thereof
attended by each such director. The directors may also be paid their expenses as decided by the board of directors
from time to time for attending a meeting of the board of directors or a committee thereof. The remuneration will
be decided in the general meeting through an ordinary resolution of members. The Directors are liable to retire in
accordance with the provisions of the Companies Act.
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TAXATION
STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO OUR SHAREHOLDERS UNDER
THE IT ACT PRESENTLY IN FORCE IN INDIA
The information provided below sets out the possible tax benefits available to the shareholders of an Indian
company in a summary manner only and is not a complete analysis or listing of all potential tax consequences of
the subscription, ownership and disposal of equity shares, under the current tax laws presently in force in India.
Several of these benefits are dependent on the shareholders fulfilling the conditions prescribed under the relevant
tax laws. Hence, the ability of the shareholders to derive the tax benefits is dependent upon fulfilling such
conditions, which, based on business imperatives a shareholder faces, may or may not choose to fulfil.
The following overview is only intended to provide general information to the investors and is not exhaustive or
comprehensive and is neither designed nor intended to be a substitute for professional advice. In view of the
individual nature of tax consequences and the changing tax laws, each investor is advised to consult his or her or
their own tax consultant with respect to the specific tax implications arising out of their participation in the issue,
particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or
may have a different interpretation on the benefits, which an investor can avail.
INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX CONSULTANT WITH RESPECT TO
THE INDIAN TAX IMPLICATIONS AND CONSEQUENCES OF PURCHASING, OWNING AND
DISPOSING OF EQUITY SHARES IN YOUR PARTICULAR SITUATION.
The law stated below is as per the Income-tax Act, 1961 as amended by the Finance (No. 2) Act, 2014 and on the
assumption that the Equity Shares would not be held by the shareholders as stock-in-trade.
A) BENEFITS / CONSEQUENCES UNDER THE IT ACT
I. Resident Shareholders
1. Dividends (whether interim or final) referred to in Section 115-O of the IT Act, declared, distributed or
paid by our Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of
the IT Act.
In the context of dividend payable by our Company to its shareholders, by virtue of section 115-O,
erstwhile our Company was liable to pay Dividend Distribution Tax (“DDT”) at the rate of 15% (plus
applicable surcharge and cess) on the total income declared, distributed, or paid as dividend. However, the
Finance Act (No 2), 2014 has with effect from October 1, 2014 amended the provisions of Section 115-O
to provide that tax on dividends to be distributed by domestic companies is to be computed on the grossed
up amount of dividend by the rate of tax on such dividend, instead of the net amount paid. Thus, where
the amount of dividend distributed or paid by a company is `85, then DDT under the amended provision
would be calculated as follows:
Dividend amount distributed = `85
Increase by `15 [i.e. (85*0.15)/(1-0.15)]
Increased amount = `100
DDT @ 15% of `100 = ` 15
Tax payable u/s 115-O is` 15
Dividend distributed to shareholders = `85
So DDT payable will be` 15 before surcharge and education cess and higher education cess.
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In calculating the amount of dividend on which DDT is payable, dividend shall be reduced by dividend
received from its subsidiary, subject to fulfillment of certain conditions.
As per section 94(7) of the IT Act, losses arising from sale/transfer of shares, where such shares are
purchased within three months prior to the record date and sold within three months from the record date,
will be disallowed to the extent such loss does not exceed the amount of dividend claimed as exempt.
2. Section 48 of the IT Act, which prescribes the mode of computation of capital gains, provides for
deduction of cost of acquisition/improvement and expenses incurred wholly and exclusively in connection
with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains.
However, in respect of Long Term Capital Gains, (“LTCG”)1 from transfer of shares of an Indian
company, the second proviso to Section 48 of the IT Act, permits substitution of cost of
acquisition/improvement with the indexed cost of acquisition/improvement, which adjusts the cost of
acquisition/improvement by a cost inflation index, as prescribed from time to time.
3. Under Section 10(38) of the IT Act, LTCG arising to a shareholder on transfer of equity shares would be
exempt from tax where the sale transaction has been entered into on a recognised stock exchange of India
and is chargeable to Securities Transaction Tax (“STT”).
4. Under Section 112 of the IT Act and other relevant provisions of the IT Act, LTCG, (other than those
exempt under Section 10(38) of the IT Act) arising on transfer of our shares would be subject to tax at the
rate of 20% (plus applicable surcharge and education cess) after indexation. The amount of such tax shall,
however, be limited to 10% (plus applicable surcharge and education cess) without indexation, at the
option of the shareholder in case the shares are listed.
5. As per Section 111A of the IT Act, Short Term Capital Gains (“STCG”)2 arising on transfer of our equity
share would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such
transaction of sale is entered on a recognised stock exchange in India and is liable to STT. STCG arising
from transfer of our shares, other than those covered by Section 111A of the IT Act, would be subject to
tax as calculated under the normal provisions of the IT Act.
6. As per Section 74 of the IT Act, Short Term Capital Loss computed for the given year is allowed to be set
off against Short Term as well as Long Term Gains computed for the said year. The balance loss, which is
not set off, is allowed to be carried forward for subsequent eight assessment years for being set off against
subsequent years’ Short Term as well as Long Term Gains. However, the long term capital loss (other
than the above long term capital assets whose gains are exempt under Section 10(38) of the IT Act))
computed for a given year is allowed to be set off only against the LTCG. The balance loss, which is not
set off, is allowed to be carried forward for subsequent eight assessment years for being set off against
subsequent years’ LTCG.
7. As per fifth proviso to Section 48 of the IT Act, no deduction of amount paid on account of STT will be
allowed in computing the income chargeable to tax as capital gains.
8. No withholding tax is applicable on income arising by way of capital gains to a resident shareholder on
transfer of shares of an Indian company.
1 Long term capital gains are gains from shares held (a) for a period exceeding twelve months in the case of listed
shares; and (b) for a period exceeding thirty six months in the case of unlisted shares.
2 Short term capital gains are gains from shares held (a) for a period not exceeding twelve months in the case of
listed shares; and (b) for a period not exceeding thirty six months in the case of unlisted shares.
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II. Non-resident shareholders other than Foreign Institutional Investor (“FII”s) and Foreign Venture
Capital Investors (“FVCI”)
1. Dividends (whether interim or final) referred to in Section 115-O of the IT Act, declared, distributed or
paid by our Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of
the Act.
In the context of the dividend payable by our Company to its shareholders, by virtue of section 115-O,
erstwhile our Company was liable to pay DDT at the rate of 15% (plus applicable surcharge and cess) on
the total income declared, distributed, or paid as dividend. However, the Finance Act (No 2), 2014 has
with effect from October 1, 2014 amended the provisions of Section 115-O to provide that tax on
dividends to be distributed by domestic companies is to be computed on the grossed up amount of
dividend by the rate of tax on such dividend, instead of the net amount paid. Thus, where the amount of
dividend distributed or paid by a company is `85, then DDT under the amended provision would be
calculated as follows:
Dividend amount distributed = ` 85
Increase by ` 15 - i.e. (85*0.15)/(1-0.15)
Increased amount = `100
DDT @ 15% of ` 100 = `15
Tax payable u/s 115-O is ` 15
Dividend distributed to shareholders = ` 85
So DDT payable will be ` 15 before surcharge and education cess and higher education cess.
In calculating the amount of dividend on which DDT is payable, dividend shall be reduced by dividend
received from its subsidiary, subject to fulfillment of certain conditions.
As per section 94(7) of the Act, losses arising from sale/transfer of shares, where such shares are
purchased within three months prior to the record date and sold within three months from the record date,
will be disallowed to the extent such loss does not exceed the amount of dividend claimed as exempt.
2. Under the First Proviso to Section 48 of the IT Act, in case of a non resident shareholder, in computing the
capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as
per exchange control regulations) (in cases not covered by Section 115E of the IT Act, discussed
hereunder), protection is provided from fluctuations in the value of rupee in terms of foreign currency in
which the original investment was made. Cost indexation benefits will not be available in such a case.
The capital gains/loss in such a case is computed by converting the cost of acquisition, sales consideration
and expenditure incurred wholly and exclusively in connection with such transfer into the same foreign
currency which was utilised in the purchase of the shares.
3. Under Section 10(38) of the IT Act, LTCG arising to a shareholder, being a non-resident, on sale of equity
shares would be exempt from tax where the sale transaction has been entered into on a recognised stock
exchange of India and is chargeable to STT.
4. Having regard to the provisions of Section 112 of the IT Act, other relevant provisions of the IT Act and
recent judicial precedents, LTCG, (other than those exempt under Section 10(38) of the IT Act) arising on
off-market transfer of our listed shares, at the option of the shareholder, should be subject to tax at a rate
of 10% (plus applicable surcharge and education cess), without indexation.
5. Under Section 111A of the IT Act and other relevant provisions of the IT Act, STCG arising on transfer of
equity share would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such
transaction of sale is entered on a recognised stock exchange in India and is chargeable to STT. STCG
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arising from transfer of our shares, other than those covered by Section 111A of the IT Act, would be
subject to tax as calculated under the normal provisions of the IT Act.
6. As per Section 74 of the IT Act, Short Term Capital Loss computed for the given year is allowed to be set
off against Short Term as well as Long Term Gains computed for the said year. The balance loss, which is
not set off, is allowed to be carried forward for subsequent eight assessment years for being set off against
subsequent years’ Short Term as well as Long Term Gains. However, the Long Term capital Loss (other
than the above long term capital assets whose gains are exempt under Section 10(38) of the IT Act))
computed for a given year is allowed to be set off only against the LTCG. The balance loss, which is not
set off, is allowed to be carried forward for subsequent eight assessment years for being set off against
subsequent years’ LTCG.
7. Where our shares have been subscribed in convertible foreign exchange, Non Resident Indians, i.e. an
individual being a citizen of India or person of Indian origin who is not a resident, (“NRI”) have the
option of being governed by the provisions of Chapter XII-A of the IT Act, which inter alia entitles them
to the following benefits:
(i) Under section 115E of the IT Act, where the total income of a NRI includes any income from
investments3 or income from capital gain of an asset other than a specified asset, such income shall
be taxable at 20% (plus applicable surcharge and education cess). Also, where share of the
company are subscribed to in convertible foreign exchange by a NRI, the LTCG arising to the NRI
shall be taxable at the rate of 10% (plus applicable surcharge and education cess). However, the
benefit of indexation of cost and deduction under Chapter VI-A of the IT Act, would not be
available in respect of such income.
(ii) Under Section 115F of the IT Act, LTCG (in cases not covered under Section 10(38) of the IT Act)
arising to an NRI from the transfer of our shares subscribed to in convertible foreign exchange shall
be exempt from Income tax, if the net consideration is reinvested in specified assets or in any
savings certificates referred to in Section 10(4B), within six months of the date of transfer. If only
part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The
amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred
or converted into money within three years from the date of their acquisition.
(iii) Under Section 115G of the IT Act, it shall not be necessary for an NRI to furnish his return of
income under Section 139(1) of the IT Act, if his income chargeable under the IT Act consists of
only investment income or LTCG or both, arising out of specified assets (inter-alia including shares
in an Indian Company) acquired, purchased or subscribed in convertible foreign exchange and tax
deductible at source has been deducted there from as per the provisions of Chapter XVII-B of the
IT Act.
(iv) In accordance with the provisions of Section 115H of the IT Act, where an NRI become assessable
as a resident in India, he may furnish a declaration in writing to the assessing officer along with his
return of income for that year under Section 139 of the IT Act to the effect that the provisions of
Chapter XII-A of the IT Act shall continue to apply to him in relation to such investment income
derived from the specified assets (which do not include shares in an Indian company) for that year
and subsequent assessment years until such assets are converted into money.
(v) As per provisions of Section 115-I of the IT Act, an NRI may elect not to be governed by
provisions of Chapter XII-A, and compute his total income as per other provisions of the IT Act.
3Investment income for Section 115E of the IT Act means any income derived (other than dividends referred to
in section 115-O) from specified asset (which inter-alia includes shares in an Indian company), as acquired or
purchased with, or subscribed to in, convertible foreign exchange.
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8. As per fifth proviso to Section 48 of the IT Act, no deduction of amount paid on account of STT will be
allowed in computing the income chargeable to tax as capital gains.
9. In respect of non-residents, the tax rates and consequent taxation mentioned above will be further subject
to any benefits available under the DTAA between India and the country of residence of the non-
resident/NRI. As per Section 90(2) of the IT Act, provisions of the applicable DTAA would prevail over
the provisions of the IT Act to the extent they are more beneficial to the non-resident/NRI. However, the
non-resident investor will have to qualify as a tax resident under the applicable DTAA and would need to
furnish a Tax Residency Certificate (“TRC”) of his being a resident in a country outside India, to get the
benefit of the applicable DTAA and such other document as may be prescribed as per the provisions of
Section 90(4) of the IT Act.
10. As per the provisions of Section 195 of the IT Act, any income by way of capital gains payable to non
residents (other than LTCG exempt u/s 10(38) of the IT Act) may be subject to withholding of tax at the
rate under the domestic tax laws or under the tax laws or under the DTAA, whichever is beneficial to the
assessee unless a lower withholding tax certificate is obtained from the tax authorities.
III. Foreign Institutional Investors (FIIs)
1. Dividends (whether interim or final) referred to in Section 115-O of the IT Act, declared, distributed or
paid by our Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of
the Act.
In the context of dividend payable by our Company to its shareholders, by virtue of section 115-O,
erstwhile our Company was liable to pay Dividend Distribution Tax (“DDT”) at the rate of 15% (plus
applicable surcharge and cess) on the total income declared, distributed, or paid as dividend. However, the
Finance Act (No 2), 2014 has with effect from October 1, 2014 amended the provisions of Section 115-O
to provide that tax on dividends to be distributed by domestic companies is to be computed on the grossed
up amount of dividend by the rate of tax on such dividend, instead of the net amount paid. Thus, where the
amount of dividend distributed or paid by a company is `85, then DDT under the amended provision
would be calculated as follows:
Dividend amount distributed = ` 85
Increase by `15 - i.e. (85*0.15)/(1-0.15)
Increased amount = ` 100
DDT @ 15% of ` 100 = `15
Tax payable u/s 115-O is ` 15
Dividend distributed to shareholders = ` 85
So DDT payable will be `15 before surcharge and education cess and higher education cess.
In calculating the amount of dividend on which DDT is payable, dividend shall be reduced by dividend
received from its subsidiary, subject to fulfilment of certain conditions.
As per section 94(7) of the IT Act, losses arising from sale/transfer of shares, where such shares are
purchased within three months prior to the record date and sold within three months from the record date,
will be disallowed to the extent such loss does not exceed the amount of dividend claimed as exempt.
2. As per section 2(14) of the IT Act, any securities held by a FIIs which has invested in such securities in
accordance with the regulations made under the Securities and Exchange Board of India Act, 1992, shall
be treated as capital assets. Accordingly, any gains arising from transfer of such securities shall be
chargeable to tax in the hands of FIIs as capital gains.
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3. Under Section 10(38) of the IT Act, LTCG arising to a shareholder on transfer of equity shares would be
exempt from tax where the sale transaction has been entered into on a recognised stock exchange of India
and is liable to STT.
4. Under Section 115AD(1)(ii) of the IT Act, STCG arising to an FII on transfer of shares shall be
chargeable at a rate of 15%, if such transaction of sale is entered on a recognised stock exchange in India
and is chargeable to STT. Other STCG are chargeable to tax at the rate of 30%. The above rates are to be
increased by applicable surcharge and education cess.
5. Under Section 115AD(1)(iii) of the IT Act, income by way of LTCG arising from the transfer of shares (in
cases not covered under Section 10(38) of the IT Act) held in the company will be taxable at the rate of
10% (plus applicable surcharge and education cess). The benefits of indexation of cost and of foreign
currency fluctuations are not available to FIIs.
6. As per fifth proviso to Section 48 of the IT Act, no deduction of amount paid on account of STT will be
allowed in computing the income chargeable to tax as capital gains.
7. As per Section 90(2) of the IT Act, the provisions of the applicable DTAA (entered between India and the
country of fiscal domicile of the non-resident), if any, would prevail over the provisions of the IT Act to
the extent they are more beneficial to the non-resident. However, the non-resident investor will have to
furnish a TRC of his being a resident in a country outside India, to get the benefit of the applicable DTAA
and such other document as may be prescribed as per the provisions of Section 90(4) of the IT Act.
8. As per Section 196D of IT Act, no tax is to be deducted from any income, by way of capital gains arising
to the FII from the transfer of securities referred to in section 115AD of the IT Act. Tax, if any, would be
required to be discharged by the concerned FII prior to making the remittance of the proceeds out of India.
9. The CBDT has issued a Notification No. 9 dated January 22, 2014 which provides that FPI registered
under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 shall be
treated as FII for the purpose of Section 115AD of the IT Act.
IV. Venture Capital Fund (VCF) / Venture Capital Company ("VCC")
1. Under Section 10(23FB) of the IT Act, any income of VCF/ VCC registered with the Securities and
Exchange Board of India (“SEBI”) on or before May 21, 2012 or VCF/ VCC registered with the SEBI as a
sub-category of Category-I Alternative Investment Fund, would be exempt from income-tax, subject to
fulfillment of conditions specified therein.
2. As per the provisions of section 115U of the IT Act, any income accruing or arising to or received by a
person out of investments made in a VCF / VCC (referred in section 10(23FB)) shall be chargeable to
income-tax in the same manner as if it were the income accruing or arising to or received by such person
had he made investments directly in the Venture Capital Undertaking.
V. Mutual Funds
Under Section 10(23D) of the IT Act, any income of mutual funds registered under SEBI or mutual funds
set up by public sector banks or public financial institutions or authorised by the RBI and subject to the
conditions specified therein, is exempt from tax subject to such conditions as the Central Government may
by notification in the Official Gazette, specify in this behalf.
VI. Provident Fund and Pension Fund
Under section 10(25) of the IT Act, any income received by trustees on behalf of a recognised provident
fund and a recognised superannuation fund is exempt from tax.
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VII. Exemption under Sections 54EC of the IT Act
Under Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, LTCG
(other than those exempt under Section 10(38) of the IT Act) arising on the transfer of our shares would be
exempt from tax if such capital gain is invested within six months after the date of such transfer, in the
bonds (long term specified assets) issued by:
(a) National Highway Authority of India constituted under Section 3 of The National Highway Authority
of India Act, 1988;
(b) Rural Electrification Corporation Limited, the company formed and registered under the Companies
Act, 1956.
The investment in the long term specified assets is eligible for such deduction to the extent of `5 million,
whether invested during the financial year in which the asset is transferred or subsequent year.
If only part of the capital gain is so reinvested, the exemption available shall be in the same proportion as
the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term
specified asset is transferred or converted into money within three years from the date of its acquisition,
the amount so exempted shall be chargeable to tax during the year of such transfer or conversion. For this
purpose, if any loans or advance is taken as against such specified securities, than such person shall be
deemed to have converted such specified securities into money. The cost of the long term specified assets,
which has been considered under this Section for calculating capital gain, shall not be allowed as a
deduction from the income-tax under Section 80C and section 88 of the IT Act for any assessment year
beginning on or after April 1, 2006.
VIII. Requirement to furnish Permanent Account Number (‘PAN’) under the IT Act
1. Section 139A(5A) of the IT Act
Section 139A(5A) requires every person from whose income tax has been deducted at source under
chapter XVII-B of the I.T. Act to furnish his PAN to the person responsible for deduction of tax at source.
2. Section 206AA of the IT Act
(a) Section 206AA of the IT Act requires every person entitled to receive any sum, on which tax is
deductible under Chapter XVIIB (‘deductee’) to furnish his PAN to the deductor, failing which tax
shall be deducted at the highest of the following rates:
(i) at the rate specified in the relevant provision of the IT Act; or
(ii) at the rate or rates in force; or
(iii) at the rate of twenty per cent.
(b) Where a wrong PAN is provided, it will be regarded as non furnishing of PAN and Para (a) above
will apply.
IX. Where the shareholder is a person located in a Notified Jurisdictional Area ("NJA") under section
94A of the IT Act
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Where the shareholder is a person located in a NJA (at present, Cyprus has been notified4 as NJA), as per
the provisions of section 94A of the IT Act:
All parties to such transactions shall be treated as associated enterprises under section 92A of the IT
Act and the transaction shall be treated as an international transaction resulting in application of
transfer pricing regulations including maintenance of documentations, benchmarking, etc.
No deduction in respect of any payment made to any financial institution in a NJA shall be allowed
under the IT Act unless the assessee furnishes an authorisation in the prescribed form authorizing the
CBDT or any other income-tax authority acting on its behalf to seek relevant information from the
said financial institution (Section 94A(3)(a) of the IT Act read with Rule 21AC and Form 10FC).
No deduction in respect of any expenditure or allowance (including depreciation) arising from the
transaction with a person located in a NJA shall be allowed under the IT Act unless the assessee
maintains such documents and furnishes such information as may be prescribed (Section 94A(3)(b) of
the IT Act read with Rule 21AC).
If any assessee receives any sum from any person located in a NJA, then the onus is on the assessee to
satisfactorily explain the source of such money in the hands of such person or in the hands of the
beneficial owner, and in case of his failure to do so, the amount shall be deemed to be the income of
the assessee (Section 94A(4) of the IT Act).
Any sum payable to a person located in a NJA shall be liable for withholding tax at the highest of the
following rates:
(i) at the rate or rates in force;
(ii) at the rate specified in the relevant provision of the IT Act; or
(iii) at the rate of thirty per cent.
X. General Anti-Avoidance Rules ("GAAR")
1. In terms of Chapter XA of the IT Act, GAAR may be invoked notwithstanding anything contained in the
IT Act. Due to this any arrangement entered into by an assessee may be declared to be impermissible
avoidance arrangement, as defined in that Chapter and the consequence would be inter alia denial of tax
benefit. This would also include denial of the benefit of the DTAA to an investor if the Revenue
Authorities declares any arrangement to be an impermissible avoidance arrangement. The GAAR
provisions are applicable with effect from the Financial Year 2015-16.
2. However, the GAAR provisions can be said to be not applicable in certain circumstances viz. the main
purpose of arrangement is not to obtain a tax benefit etc. including circumstances enumerated in CBDT
Notification No. 75/2013 dated September 23, 2013.
B) BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957
Asset as defined under Section 2(ea) of the Wealth Tax Act, 1957 does not include shares in companies
and hence, our shares held by the shareholders would not be liable to wealth tax.
Notes:
4 Notification No. 86/2013, dated 1 November, 2013 published in Official Gazette through SO 4625 GI/13
162
1. The above benefits are as per the current tax law as amended by the Finance (No. 2) Act, 2014 (the “FA”).
2. As per the FA, surcharge is to be levied as under:
(a) In the case of individual or Hindu undivided family or association of persons or body of individuals,
whether incorporated or not, or every artificial juridical person, where his income or exceeds rupees 10
million, surcharge at 10% of tax is payable.
(b) In case of domestic company, where its income exceeds rupees 10 million but does not exceed rupees
100 million, a surcharge at the rate of 5% of tax liability is payable and when such income exceeds
rupees 100 million, surcharge at 10% of tax is payable.
(c) In case of foreign companies, where the income exceeds rupees 10 million but does not exceed rupees
100 million, a surcharge of 2% of such tax liability is payable and when such income exceeds rupees
100 million, surcharge at 5% of tax is payable.
Further, 2% education cess and 1% secondary and higher education cess on the total income tax (including
surcharge) is also applicable.
3. The above statement covers only certain relevant benefits under the Income-tax Act, 1961 and Wealth Tax
Act, 1957(collectively referred to as ‘direct tax laws’) and does not cover benefits under any other law.
4. The stated benefits will be available only to the sole/first named holder in case the shares are held by the
joint holders.
5. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further
subject to any benefits available under the DTAA, if any, between India and the country in which the non-
resident has fiscal domicile.
6. In respect of non-residents, taxes paid in India could be claimed as a credit in accordance with the provisions
of the relevant tax treaty.
7. The above statement of possible direct tax benefits sets out the provisions of law in a summary manner only
and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and
disposal of shares.
8. This statement is intended only to provide general information to the investors and is neither designed nor
intended to be substituted for professional tax advice. In view of the individual nature of tax consequences,
each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of
his/her participation in the scheme.
9. The above statement of possible direct-tax benefits sets out the possible tax benefits available to it’s the
shareholders of the Company under the current tax laws presently in force in India. Several of these benefits
available are dependent on the Company or its shareholders fulfilling the conditions prescribed under the
relevant tax laws.
10. No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our
views are based on the existing provisions of law and its interpretation, which are subject to changes from
time to time. We do not assume responsibility to update the views consequent to such changes.
Certain U.S. Federal Income Tax Considerations
163
The following is a discussion of certain U.S. federal income tax consequences of purchasing, owning and
disposing of Equity Shares. It does not purport to be a comprehensive description of all of the U.S. tax
considerations that may be relevant to a particular person's decision to acquire the Equity Shares. This section is
based on the United States Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, final,
temporary and proposed Treasury regulations issued under the Code, administrative pronouncements by the U.S.
Internal Revenue Service (the “IRS”) and judicial decisions, all as in effect or in existence as of the date of this
Placement Document and all of which at any time may be repealed, revoked or modified or subject to differing
interpretations so as to result in U.S. federal income tax consequences different from those discussed below,
possibly with retroactive effect. This discussion is not binding on the IRS or the courts. No ruling has been or
will be sought from the IRS with respect to the positions and issues discussed herein, and there can be no
assurance that the IRS will not take a different position concerning the U.S. federal income tax consequences of
an investment in the Equity Shares or that any such position would not be sustained.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR CONCERNING THE U.S. FEDERAL,
STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND
DISPOSING OF EQUITY SHARES IN YOUR PARTICULAR SITUATION.
The following discussion applies to you only if you are a U.S. Holder (as defined below), you acquire the Equity
Shares in this Issue, you hold the Equity Shares as capital assets for U.S. federal income tax purposes and you
are not resident in India for purposes of the Indian Income Tax Act, 1961 or the U.S. - India income tax treaty.
This section does not apply to you if you are a member of a special class of U.S. Holders subject to special tax
rules, including:
a dealer in securities or foreign currencies;
a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;
a bank or other financial institution;
a tax-exempt organization, retirement plan, individual retirement account or tax-deferred account;
an insurance company;
a holder liable for alternative minimum tax;
a holder that directly, indirectly or constructively owns 10% or more of the total combined voting power
of all classes of the Company's stock entitled to vote;
a holder that holds the Equity Shares as part of a straddle, hedging or conversion transaction;
a holder who is a U.S. expatriate; or
a holder whose functional currency is not the U.S. dollar.
This discussion does not address any aspect of U.S. federal gift or estate tax, or state, local or non-U.S. tax laws.
Additionally, the discussion does not consider the tax treatment of partnerships or other pass-through entities
(including entities treated as partnerships for U.S. federal income tax purposes) or persons who hold the Equity
Shares through such entities.
You are a “U.S. Holder” if you are a beneficial owner of Equity Shares and you are for U.S. federal income tax
purposes:
a citizen of the United States;
a permanent resident of the United States whose income is subject to U.S. federal income tax regardless of
its source;
a U.S. domestic corporation, or other entity treated as a domestic corporation for U.S. federal income tax
purposes;
an estate whose income is subject to U.S. federal income tax regardless of its source; or
a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more
U.S. persons are authorized to control all substantial decisions of the trust or (ii) the trust has a valid
election in effect under current Treasury regulations to be treated as a U.S. person.
Taxation of Dividends
Subject to the PFIC rules referred to below, if you are a U.S. Holder, you must include in your gross income the
gross amount of any dividend paid by the Company out of its current or accumulated earnings and profits (as
determined for U.S. federal income tax purposes) when you receive the dividend, actually or constructively. The
dividend is ordinary income that you must include in income when you receive the dividend, actually or
164
constructively. Dividends generally are subject to tax at ordinary income rates of up to 39.6%. However, if the
Company is not treated as a PFIC, U.S. Holders who are individuals may be eligible for the reduced tax rate
equal to the current U.S. federal capital gains tax rate of up to 20% if the Company qualifies for benefits under
the U.S. - India income tax treaty. U.S. Holders should consult their own tax advisor regarding their eligibility
for the reduced tax rate described above.
Dividends received generally will be income from non-U.S. sources. Such non-U.S. source income generally will
be “passive category income”, which is treated separately from other types of income for purposes of computing
the foreign tax credit allowable to you. You should consult your own tax advisor to determine the foreign tax
credit implications of owning the Equity Shares.
The amount of the dividend distribution that you must include in your income as a U.S. Holder will be the U.S.
dollar value of the Indian rupee payments made, determined at the spot Indian rupee/U.S. dollar exchange rate on
the date the dividend distribution, regardless of whether the payment is in fact converted into U.S. dollars.
Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you
include the dividend payment in income to the date you convert the payment into U.S. dollars will be treated as
ordinary income or loss. The gain or loss generally will be income or loss from sources within the United States
for foreign tax credit limitation purposes.
Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income
tax purposes, will be treated as a non-taxable return of capital to the extent of your adjusted tax basis in the
Equity Shares and thereafter as capital gain. However, the Company does not intend to maintain calculations of
its earnings and profits in accordance with U.S. federal income tax principles, so each U.S. Holder should
therefore assume that any distribution by the Company with respect to the Equity Shares will constitute ordinary
dividend income.
Taxation of Capital Gains
If you are a U.S. Holder and you sell or otherwise dispose of any of your Equity Shares, subject to the PFIC rules
referred to below, you will recognize capital gain or loss for U.S. federal income tax purposes equal to the
difference between the U.S. dollar value of the amount that you realize and your adjusted tax basis, determined
in U.S. dollars, in those Equity Shares that are sold or otherwise disposed of. Your adjusted tax basis in your
Equity Shares generally should be the acquisition cost for such shares. Capital gain or loss from the sale,
exchange or other disposition of shares held for more than one year is long-term capital gain or loss, and long-
term capital gain is eligible for a reduced rate of taxation for non-corporate taxpayers. Long-term capital gains
recognized by certain non-corporate U.S. Holders may generally qualify for a reduced rate of taxation of up to
20%. U.S. Holders should consult their own tax advisor regarding their eligibility for the reduced tax rate
described above. Your ability to deduct capital losses is subject to limitations.
Under the U.S. - India income tax treaty, India may generally tax capital gains in accordance with the provisions
of its domestic law. U.S. Holders should consult their Indian tax advisors concerning the Indian tax
consequences of capital gains arising from the sale or other disposition of their Equity Shares. If Indian tax is
imposed on a U.S. Holder’s capital gain on the sale or other disposition of Equity Shares, a foreign tax credit
may be available for U.S. federal income tax purposes with respect to such Indian tax. U.S. Holders should
consult their U.S. tax advisors concerning the U.S. tax treatment of any such Indian tax.
U.S. Holders should consult their own tax advisors regarding the treatment of any foreign currency gain or loss
(which generally will be treated as U.S. source ordinary income or loss) on any non-U.S. currency received in a
sale or exchange of the Equity Shares that is converted into U.S. dollars (or otherwise disposed of) on a date
subsequent to receipt.
Passive Foreign Investment Company Rules
If the Company were a PFIC for any year during a U.S. Holder’s holding period, then certain rules will affect the
U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition
of Equity Shares. The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income
of the Company for such tax year is passive income (the “income test”) or (b) 50% or more of the value of the
average quarterly assets held by the Company either produce passive income or are held for the production of
passive income, based on the fair market value of such assets (the “asset test”). “Gross income” generally means
all sales revenues less the cost of goods sold, and “passive income” includes, for example, dividends, interest,
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certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities
transactions.
In addition, for purposes of the PFIC income test and asset test described above, if the Company owns, directly
or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will
be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a
proportionate share of the income of such other corporation. For purposes of the PFIC income test and asset test
described above, “passive income” does not include any interest, dividends, rents, or royalties that are received
or accrued by the Company from a “related person” (as defined in the Code), to the extent such items are
properly allocable to the income of such related person that is not passive income.
The Company does not believe that it was a PFIC during the tax year ended March 31, 2014, and based on
current business plans and financial expectations, the Company does not believe that it will be a PFIC for the
current tax year. However, PFIC classification is fundamentally factual in nature and generally cannot be
determined until the close of the tax year in question and is determined annually. Additionally, the analysis
depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing
interpretations. Consequently, there can be no assurance that the Company has never been and will not become a
PFIC for any tax year during which U.S. Holders hold Equity Shares.
If the Company were a PFIC in any tax year and a U.S. Holder held Equity Shares, such U.S. Holder generally
would be subject to special rules with respect to “excess distributions” made by the Company on the Equity
Shares and with respect to any gain from the disposition of Equity Shares. An “excess distribution” generally is
defined as the excess of distributions with respect to the Equity Shares received by a U.S Holder in any tax year
over 125% of the average annual distributions such U.S. Holder has received from the Company during the
shorter of the three preceding tax years, or such U.S. Holder’s holding period for the Equity Shares. Generally, a
U.S. Holder would be required to allocate any excess distribution or gain from the disposition of the Equity
Shares ratably over its holding period for the Equity Shares. Such amounts allocated to the year of the disposition
or excess distribution would be taxed as ordinary income, and amounts allocated to prior tax years would be
taxed as ordinary income at the highest tax rate in effect for each such year and an interest charge at a rate
applicable to underpayments of tax would apply.
If the Company was a PFIC and, at any time, had non-U.S. subsidiaries that were classified as PFICs, the U.S.
Holder could incur liability for the deferred tax and interest charge described above if either (1) the Company
received a distribution from, or disposed of all or part of the Company’s interest in, a lower-tier PFIC or (2) the
U.S. Holder disposed of all or part of its Equity Shares. Additionally, if the Company is a PFIC for any taxable
year during which a U.S. Holder holds the Company’s Equity Shares, the Company generally will continue to be
treated as a PFIC with respect to such U.S. Holder for all succeeding taxable years during which such U.S.
Holder holds the Company’s Equity Shares. If the Company ceases to be a PFIC, a U.S. Holder may avoid some
of the adverse effects of the PFIC regime by making a deemed sale election with respect to the Equity Shares.
While there are U.S. federal income tax elections that sometimes can be made to mitigate these adverse tax
consequences (including, without limitation, the “QEF Election” and the “Mark-to-Market Election”), such
elections are available in limited circumstances and must be made in a timely manner. U.S. Holders should be
aware that, for each tax year, if any, that the Company is a PFIC, the Company will not satisfy the record
keeping requirements or make available to U.S. Holders the information such U.S. Holders require to make a
QEF Election with respect of the Company. A Mark-to-Market Election will only be available if the Equity
Shares qualify as “marketable stock” under the Code, but there can be no assurance that the Company’s Equity
Shares will qualify as marketable stock during all or any portion of a U.S. Holder’s holding period for the Equity
Shares.
The application and interpretation of certain aspects of the PFIC rules require the issuance of regulations which
in many instances have not been promulgated and which may have retroactive effect. There can be no assurance
that any of these regulations will be enacted or promulgated, and if so, the form they will take or the effect that
they may have on this discussion. The rules dealing with PFICs are affected by various factors in addition to
those described above.
If the Company was a PFIC for any taxable year during which a U.S. Holder held Equity Shares, the U.S. Holder
must file IRS Form 8621 for each taxable year in which the U.S. Holder recognizes any gain on a direct or
indirect sale or other disposition of Equity Shares, receives deemed or actual distributions from the Company, or
makes certain elections with respect to the Equity Shares.
166
U.S. Holders should consult their own tax advisors regarding the Company’s classification as a PFIC, the
potential U.S. federal income tax consequences arising from the ownership and disposition of shares in a
PFIC as well as the availability, advisability, timeliness and effectiveness of making a “mark-to-market”
election.
Medicare Contribution Tax
A United States person that is an individual, estate or a trust that does not fall into a special class of trusts that is
exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) such person’s "net investment income"
for the relevant taxable year and (2) the excess of such person’s modified adjusted gross income for the taxable
year over a certain threshold (which in the case of individual will be between $125,000 and $250,000, depending
on the individual's circumstances). A United States person’s net investment income will generally include its
dividend income and its net gains from the disposition of Equity Shares, unless such dividend income or net
gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that
consists of certain passive or trading activities).
United States persons are advised to consult their own tax advisors regarding the application of this tax and the
final Treasury Regulations (including any elections thereunder) with respect to an investment in Equity Shares.
Foreign Account Tax Compliance Act (“FATCA”)
U.S. return disclosure obligations (and related penalties) apply to U.S. Holders that hold certain specified foreign
financial assets in excess of $50,000 for tax years beginning after March 18, 2010. The definition of specified
foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also,
unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person,
any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S.
person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless
their Equity Shares are held in an account at a U.S. domestic financial institution. Penalties for failure to file
certain of these information returns are substantial. U.S. Holders should consult their own tax advisors regarding
the potential application of the FATCA rules to their Equity Shares.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to dividends in respect of Equity Shares or the
proceeds received on the sale, exchange or redemption of any of the Equity Shares paid within the United States
to U.S. Holders other than certain exempt recipients, such as corporations, and backup withholding tax at 28%
may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number and a
duly executed IRS Form W-9 (or to otherwise establish, in the manner provided by law, an exemption from
backup withholding) or to report dividends required to be shown on the U.S. Holder's U.S. federal income tax
returns.
Backup withholding is not an additional income tax, and the amount of any backup withholding from a payment
to a U.S. Holder will be allowed as credit against the U.S. Holder's U.S. federal income tax liability provided that
the appropriate returns are filed.
The foregoing does not purport to be a complete analysis of the potential tax considerations relating to the Issue,
and is not tax advice. Prospective investors should consult their own tax advisors as to the particular tax
considerations applicable to them relating to the purchase, ownership and disposition of the Equity Shares,
including the applicability of the U.S. federal, state and local tax laws or non-tax laws, any changes in applicable
tax laws and any pending or proposed legislation or regulations.
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OUTSTANDING LITIGATION
Except as disclosed in the following paragraphs, neither the Company, nor any of its property is subject to, any
pending legal proceedings which the Company considers to be potentially material to its respective business.
This section on Outstanding Litigations includes disclosures of (i) all criminal proceedings to which the
Company is currently a party, and (ii) all civil proceedings in which the amount involved exceeds `10,000,000.
Aggregate disputed amounts have been disclosed in respect of tax related cases filed against the Company.
S. No. Cause Title Particulars
1. Om Prakash Navani v. Cox & Kings
Limited & Others
Om Prakash Navani (the Plantiff) has filed a civil suit for specific
performance and a claim for damages against (1) Dr. Ajit Baburao
Kerkar, (2) Tulip Hotels Pvt. Limited, (3) V Hotels Limited, (4) Tulip
Star Hotels Limited, (5) Cox and Kings (India) Limited, (6) Ajay Ajit
Peter Kerkar, (7) Urrishila Kerkar, (8) Elizabeth Kerkar, (9) Kalpatharu
Resorts Pvt. Limited, (10) Trade Wings Limited, (11) Trade Wings
Hotels Limited, and (12) Dr. Shailendra Mittal in the High Court at
Bombay.
The Plantiff has filed a suit for specific performance of an alleged oral
contract, alleged to have been entered into by the Plantiff with the
defendant no. 1 for himself and representing defendant nos. 2, 4 and 6 to
8 for transfer of 25% of the shareholding of defendant No. 2 to 5 and
defendant no. 9.
In the alternative, the Plantiff has sought an order and a decree against
the defendant Nos. 1 to 8 to pay to the Plantiff an amount of ` 1,080
million as compensation and/or damages with an interest at 15%.
The Company is yet to file a written statement. The suit is pending
hearing and final disposal before the Bombay High Court.
2. Urrshila Kerkar v. Om Prakash
Navani & Ors.
Urrshila Kerkar has filed this present suit against the defendants to
declare her as a lawful tenant of a property located in Colaba, Mumbai.
The matter is posted for hearing on January 15, 2015 in the Small Causes
Court.
3. Junot. C. Pereira v. Urrshila Kerkar &
Ors.
Urrshila Kerkar (the Co-defendant) is in possession, as a tenant, of suit
property located in Colaba, Mumbai (the Premises) by virtue of paying
` 15, 000 per month as rent to Mr. Om Prakash Navani and Phool Om
Prakash Navani (the Defendants). The Co-defendant has been
impleaded as a party in the suit on account of her status as tenant in the
Premises. Mr. Pereira (the Plaintiff) in the instant suit contend that the
Defendants have no right to the Premises and the creation of tenancy
rights by the Defendants was invalid. Hence the Plaintiffs contend that
the Co-defendant may not continue residing as a tenant in the said
property. The court by way of an interim order appointed a court
receiver to the Premises. The matter is posted for further hearing.
168
4. Makemytrip v. Ezeego1 & Ors. Makemytrip filed a suit for defamation against Ezeego1, our Company
and Urrshila Kerkar, before the Court of Sessions Judge, Patiala House,
Delhi. The matter is posted for hearing on November 26, 2014.
5. Liz Investments v. Far Pavilions &
Ors.
A petition was filed before Company Law Board for reliefs in respect of
diversion of the TUI Nordic business by one of the defendants, Pranab
Pal, through the misuse of his position as a director of Far Pavilions. The
matter is posted for final arguments on December 1, 2014.
6. Dr. Khazane Aziz v. Cox & Kings Ltd. A petition has been filed before the State Commission, New Delhi
claiming deficiency of services, and a claim has been made for the tour
cost amount, compensation, medical expenses and interest. The matter
is posted for hearing on April 29, 2015.
7. IRCTC v. Cox & Kings Ltd. The Company had entered into a joint venture agreement with IRCTC in
December 2008. IRCTC has given a notice dated August 12, 2011 for
termination of the joint venture. The Company approached the Delhi
High Court under Section 9 of the Arbitration and Conciliation Act for
the grant of interim relief. The learned single bench of the Delhi High
Court ordered the arrangements for train journeys under the joint venture
agreement to continue until December 31, 2011, and appointed a court
receiver in the matter. IRCTC went in appeal against the judgment
before a division bench of the High Court. The division bench of the
High Court upheld the appeal of IRCTC. The Company has filed a
special leave petition before the Supreme Court of India. This petition
was dismissed. Thereafter the Company has invoked arbitration
proceedings against IRCTC. Two statements of claim have been filed
based on the articles of association and the joint venture agreement
respectively. The matter is now listed before the arbitral tribunal on
January 19- 21 2015 for further proceedings.
The Company has also initiated proceedings under the arbitration
agreement, while IRCTC has filed a petition regarding the matter before
the Company Law Board. The matter came up for hearing on February 2,
2012 and the Company Law Board rejected the interim relief sought by
IRCTC. The matter is posted for hearing on December 3, 2014.
169
Tax Litigation
S. No. Period of Demand Particulars
1 Assessment Year 2007-2008 Demand for ` 21,241,492 has been made by the Income Tax Department
on December 28, 2010. On appeal before the Additional Commissioner
of Income Tax (CIT-A), the matter was remanded back to the Assessing
Officer for verification of additional evidence. On verification, the
Assessing Officer has given a favorable remand report pertaining to the
initial demand. The Company believes that this demand will be
substantially reduced at the time of final hearing before the CIT-A.
2. Assessment year 2009-2010
Demand of ` 20,153,140 has been made by the Income Tax Department
on January 8, 2014 on the basis on additional income calculated by
determining the arms' length price of several transactions, income from
tour sales and disallowance under Section 14A of the Income Tax Act.
The Company has appealed against this demand to the Income Tax
Appellate Tribunal (ITAT) and believes that the demand will be
substantially reduced at the ITAT level.
3. April 1, 2005 to March 31, 2011 Demand of ` 1,290,777,449 made by the Commissioner of Service Tax,
Mumbai through an order dated March 12, 2012 for outbound tour
services provided by the Company during the period of April 1, 2005 to
March 31, 2011. The Company filed an appeal before the Customs,
Excise & Service Tax Appellate Tribunal (Tribunal) and secured a stay
order dated May 1, 2013 whereby the Tribunal waived the pre-deposit of
dues and stayed the recovery of the amount.
Inquiries, inspections or investigations under Companies Act
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Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any
previous company law in the last three years immediately preceding the year of circulation of the Placement
Document in the case of Company and all of its subsidiaries. Also if there were any prosecutions filed (whether
pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year
of the Placement Document and if so, section- wise details thereof for the Company and all of its subsidiaries
Nil
Material Fraud committed against our Company
Details of acts of material frauds committed against the Company in the last three years, if any, and if so, the
action taken by the Company.
Nil
Litigation or legal action pending or taken by any ministry or government department or statutory authority
against our promoters
Details of any litigation or legal action pending or taken by any Ministry or Department of the Government
or a statutory authority against any promoter of the Company during the last three years immediately
preceding the year of the circulation of the Placement Document and any direction issued by such Ministry
or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed.
Nil
Defaults in respect of dues payable
Our Company has no outstanding defaults in relation to statutory dues payable, dues payable to holders of any
debentures (including interest thereon) or dues in respect of deposits (including interest thereon) or any defaults
in repayment of loans from any bank or financial institution (including interest thereon).
Nil
Changes in accounting policies during the last three years and their effect on the profits and the reserves of
the Company
There has been no change in accounting policies of the Company during the last three years.
Reservation or Qualifications or Adverse Remarks of Auditors
The audit report of the last five financial years immediately preceding the year of circulation of Placement
Document are not qualified.
The following may, however, be noted:
The Royale India Rail Tours Ltd. (RIRTL) is a 50:50 joint venture between Indian Railway Catering and
Tourism Corporation (IRCTC) and Cox & Kings Ltd. The Supreme Court has dismissed the Special Leave
Petition filed by the Company and directed both the parties to go for arbitration which commenced on July
6, 2012. It also made it clear that the observations made by the Courts shall not, in any way, influence the
outcome of the arbitral proceedings, if resorted to by the parties. For the fiscal year 2 012, the Company
has not considered the financials of RIRTL for consolidation purpose since they were not made available,
and for the fiscal years 2013 and 2014, the Company has consolidated the last available financials of
RIRTL for year ended March 31, 2011.
171
INDEPENDENT AUDITORS
Our Company’s current statutory auditors, M/s Chaturvedi & Shah, who audited the Financial Statements as of
and for the Fiscal Years ended March 31, 2012, 2013 and 2014, included in this Placement Document, are
independent auditors with respect to our Company in accordance with the guidelines issued by the ICAI.
172
GENERAL STATEMENTS
1. The Company was incorporated as "Eastern Carrying Company Limited" on June 7, 1939 under the
Indian Companies Act, VII of 1913. The name of the Company was changed to "Cox and Kings (India)
Limited" and the consequent fresh certificate of incorporation was granted on February 23, 1950.
Subsequently, after the amendment of section 43A of the Companies Act, the word "Private" was added
to the name of the Company on October 12, 2001. Pursuant to a special resolution of the shareholders of
the Company at an extraordinary general meeting held on January 29, 2007, the Company became a
public limited company and the word "Private" was deleted from its name. The fresh certificate of
incorporation with this name was issued on March 28, 2007 by the registrar of companies. On June 16,
2010, the Board of Directors passed a resolution approving the change of name of our Company to "Cox
& Kings Limited". The resolution for a change of corporate name was approved by the shareholders by
postal ballot on July 17, 2010. The fresh certificate of incorporation with the current name was issued
on July 29, 2010 by the Registrar of Companies.
2. The Company's registered office is located at Turner Morrison Building, 1st Floor, 16 Bank Street, Fort,
Mumbai 400 001, Maharashtra, India.
3. The Issue was authorised and approved by the Board of Directors on October 9, 2014 and approved by
the shareholders via postal ballot on November 11, 2014.
4. The Company will apply for in-principle approval to list the Securities on the Stock Exchanges.
5. Copies of the Memorandum and Articles of Association of the Company will be available for inspection
during usual business hours on any working day between 10.00 A.M. to 1.00 P.M. (except Saturdays,
Sundays and public holidays) at the Company’s registered office.
6. Except for the sale of camping division and re-financing of Holidaybreak facilities, there has been no
material change in the Company's financial or trading position since March 31, 2014, the date of the last
audited consolidated financial statements included in this Placement Document, except as disclosed
herein.
7. Except as disclosed in this Placement Document, there are no litigation or arbitration proceedings
against or affecting the Company or its assets or revenues, which are material in the context of the Issue.
8. The Company confirms that it is in compliance with the minimum public shareholding requirements as
required under the terms of the listing agreements with the Stock Exchanges.
9. The Floor Price for the issue of Equity Shares is ` 309.18, calculated in accordance with Chapter VIII
of the SEBI Guidelines, as certified by M/s Chaturvedi & Shah, statutory auditors of the Company. The
committee of the Board of Directors of the Company, on November 25, 2014, approved a discount of ₹
4.18 on the Floor Price in terms of Regulation 85 of the SEBI Regulations.
10. Our Auditors have audited the standalone and consolidated financial statements for the periods ended
March 31, 2012, 2013 and 2014.
173
FINANCIAL STATEMENTS
Sl. No. Particulars Page
1. Audited Consolidated Financial statements for the years ended March 31,
2012, 2013 and 2014
F1-F56
2. Proforma financial statements for the years ended March 31, 2014 F57-F62
F-1
To
The Board of Directors,
Cox & Kings Limited
We have examined the accompanying Consolidated Financial Statements of Cox & Kings Limited (the Company), its
Subsidiaries, Joint Ventures and Associates (collectively referred to as "the Group") comprising Consolidated Balance
Sheet as at March 31, 2014, March 31, 2013 and March 31, 2012, the Consolidated Statement of Profit and Loss and the
Consolidated Cash Flow Statement for the year ended March 31, 2014, March 31, 2013 and March 31, 2012 and a
summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of
the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in
accordance with accounting principles generally accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those
Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the
consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, and based on the
consideration of the reports of the other auditors on the financial statements of the subsidiaries, joint venture and
associate, the attached consolidated financial statements give a true and fair view in conformity with the accounting
principles generally accepted in India:
(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31 2014, March
31, 2013, and March 31, 2012;
(ii) in the case of the Consolidated Statement of Profit and Loss, of the Profit of the Group for the year ended March
31, 2014, March 31, 2013, and March 31, 2012; and
F-2
(iii) in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year ended March
31, 2014, March 31,2013, and March 31,2012 respectively.
Other Matter
1. We did not audit the financial statements of all subsidiaries and joint venture, whose financial
statements/consolidated financial statements reflect total assets of Rs 99,033.5 Millions, Rs 90,849.6 Millions and Rs.
70,151.2 Millions as at March 31, March, 2014, March 31, 2013, March 31, 2012 respectively, total revenue of Rs
19,640.5 Millions, Rs. 14,717.5 Millions and Rs. 6,763.7 Millions for the year ended March 31, 2014, March 31,
2013, March 31, 2012 respectively and net cash flows amounting to Rs 1,345.1 Millions , Rs 3,052.2 Millions and
Rs. 2,374.8 Millions for the year ended March 31, 2014, March 31, 2013, March 31, 2012 respectively and financial
statements of an associate in which the share of (loss) or profit of the Group is (Rs. 15.4) Millions, Rs 403.5 Millions
and Rs. 146.2 Millions for the year ended March 31, 2014, March 31, 2013, March 31, 2012 respectively. These
financial statements and other financial information have been audited by other auditors whose reports have been
furnished to us, and our opinion is based solely on the report of other auditors.
2. In addition to above, we draw attention to note no. 35(c). The financials of the joint venture for the any financial year
after March 31, 2011 are not available with company for the reasons stated therein. The company has consolidated
the last available unaudited financials of the joint venture for the year ended 31st March, 2011 which reflects
Company’s share of total assets of Rs. 226 Millions as at 31st March, 2011.
3. We have not audited any consolidated financial statements of the Group as of any date or for any period subsequent
to March 31, 2014. Accordingly, we express no opinion on the consolidated financial position, results of operations
or cash flows of the Group as of any date or for any period subsequent to March 31, 2014.
4. These consolidated financial statements have been prepared from the audited consolidated financial statements of the
company for the year ended March 31, 2014, March 31, 2013, and March 31, 2012 on which we had issued our
separate report dated 30th May, 2014, 30
th May, 2013 and 13
th August, 2012 respectively. This report should not be in
any way construed as a re-issuance or redrafting of any of the previous audit reports issued by us and is not updated
for any events subsequent to the date of our previous audit reports.
Our opinion is not qualified in respect of the other matters.
Restriction on Distribution and Use
This report is for inclusion in the Offer Document being issued by the Company in connection with the proposed
placement of Equity shares under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 as amended, and is not to be used, referred to or distributed for any other
purpose without our prior written consent.
For Chaturvedi & Shah
Firm Registration No. 101720W
Chartered Accountants
Amit Chaturvedi
Partner
Membership No.: 103141
Place: Mumbai
Date : November 18, 2014.
F-3
CONSOLIDATED BALANCE SHEET (Rupees in Million)
Particulars Note
No.
As at As at As at
31st March, 2014 31st March, 2013 31st March, 2012
EQUITY AND LIABILITIES
Shareholder's Funds
Share Capital 1 682.64 682.64 682.64
Reserves and Surplus 2 16,865.51 12,575.98 11,240.32
Minority Interest 8,205.40 5,421.86 -
25,753.55 18,680.48 11,922.96
Non-Current Liabilities
Long-term borrowings 3 47,394.55 39,181.61 34,511.75
Deferred tax liabilities (Net) 4 699.90 746.37 766.31
Long term provisions 5 244.80 101.50 265.70
48,339.25 40,029.49 35,543.76
Current Liabilities
Short-term borrowings 6 3,463.38 2,563.64 2,549.96
Trade payables 7 5,427.69 4,699.74 4,249.17
Other current liabilities 8 21,179.45 17,169.03 21,718.11
Short-term provisions 9 643.33 375.62 514.68
30,713.85 24,808.03 29,031.92
Total 1,04,806.65 83,518.00 76,498.64
ASSETS
Non-current assets
Fixed assets
Tangible assets 10 22,882.20 18,776.80 18,460.80
Intangible assets 11 1,051.70 839.30 686.40
Capital work-in-progress 10 470.70 115.10 486.40
Intangible assets under development 11 1,717.30 1,319.30 751.10
Goodwill on Consolidation 40,532.05 27,332.90 26,628.90
66,653.95 48,383.40 47,013.60
Non-current investments 12 321.00 4,383.09 2,761.00
Deferred tax Assets (Net) 4 1.08 66.65 17.20
Long term loans and advances 13 150.74 151.30 341.61
Other non-current assets - - -
472.82 4,601.04 3,119.81
Current assets
Current investments 14 280.83 280.92 280.70
Inventories 15 199.09 185.95 172.59
Trade receivables 16 11,355.84 9,054.02 7,150.69
Cash and Cash Equivalents 17 13,786.25 12,692.47 10,532.84
Short-term loans and advances 18 12,041.32 8,287.09 8,211.91
Other current assets 19 16.55 33.10 16.50
37,679.88 30,533.55 26,365.23
Total 1,04,806.65 83,518.00 76,498.64
2.44 0.02
F-4
CONSOLIDATED STATEMENT OF PROFIT & LOSS ACCOUNT
(Rupees in Million)
Particulars Note
No.
For the year ended
31st March, 2014
For the year ended
31st March, 2013
For the year ended
31st March, 2012
INCOME : -
Revenue from operations 20 23,075.92 18,087.40 8,379.37
Other Income 21 430.67 587.85 355.64
Total Revenue 23,506.59 18,675.25 8,735.01
EXPENDITURE : -
Employee benefit expenses 22 8,747.87 6,957.55 3,852.54
Finance costs 23 3,235.76 3,704.50 1,841.95
Depreciation and amortization expense 1,711.30 1,473.60 491.30
Other expenses 24 3,222.09 3,949.13 1,550.15
Total Expenses 16,917.01 16,084.78 7,735.94
Profit before exceptional items and tax 6,589.57 2,590.47 999.07
Less: Exceptional Items 35(d) 456.17 620.80 311.80
Add: Profit / (Loss) on Disposal of
Subsidiary
- 77.10 -
Profit before tax 6,133.40 2,046.77 687.27
Tax Expenses:
Current tax 1,685.72 603.00 376.60
Deferred tax (102.70) (27.20) 19.80
Current tax expenses relating to prior
years
59.80 (54.80) 21.20
1,642.83 521.00 417.60
Profit after tax for the year 4,490.57 1,526.77 269.67
Add : Share of Income/(Loss) from
Investment in Associates (15.42) 403.50 146.20
Profit for the year 4,475.15 1,930.27 415.87
Share of Minority Interest 643.42 (555.80) -
Profit after Minority Interest 3,831.73 2,486.07 415.87
Earnings each per equity share (Face Value
per share Rs. 5 each):
29
Basic (In Rs.) 28.07 18.21 3.05
Diluted (In Rs.) 28.07 18.21 3.05
F-5
CASH FLOW STATEMENT
(Rupees in Million)
Particulars
For the year
ended
For the year
ended
For the year
ended
31.03.2014 31.03.2013 31.03.2012
Cash Flow from Operating Activities
Profit before Tax
6,133.40 1,968.60 6,87.40
Adjustment for:
Depreciation
1,711.30 1,473.60 4,91.30
Profit on sale of Investment
(0.17) - (81.89)
Dividend on Investment
(1.20) (7.82) (53.55)
Interest Income
(275.24) (358.42) (58.80)
Interest Expense
3,235.76 3,705.40 1,734.04
Bad Debts
4.89 2.76 5.27
Foreign Exchange Gain / Loss on Translation
(1,164.88) (442.71) (300.30)
Profit on Sale of Fixed Assets (Net)
(77.79) (80.28) (0.88)
Operating profit before working capital changes
9,566.07 6,261.13 2,422.58
Adjustment for:
(Increase)/Decrease in Inventories
1.91 (13.30) 42.30
(Increase)/Decrease in Trade Receivable
(2,034.36) (1,906.20) (600.90)
(Increase)/Decrease in Loans and Advances
(1,657.84) (1,466.70) (4,994.00)
Increase/(Decrease) in Current Liabilities
3,510.82 (30.90) 2,023.60
Cash Generated from Operations
9,386.59 2,844.03 (1,106.42)
Income Taxes Paid
(1,293.85) (806.00) (259.40)
Net cash flow from operating activities A 8,092.74 2,038.03 (1,365.82)
Cash Flow from Investing Activities
Purchase of Fixed Assets & Capital Work In Progress
(2,840.58) (1,694.90) (1,433.70)
Acquisition of Subsidiaries
- - (27,707.40)
Advances (given)/ Refund
- - 284.95
Sale of Fixed Assets
178.05 - 126.50
Interest Received
275.24 358.42 58.80
Dividend Received
1.20 351.20 53.60
Purchase of Investment
- - 250.40
Additional Investment in Meininger
(Refer Schedule 12)
(2,568.23) (1,719.00) -
Intercorporate Deposits given
(1,351.97) (310.60) -
Sale of Subsidiary
68.50 908.30 -
Sale of Investments
- - 1,763.00
Net cash used in investing activities B (6,237.80) (2,106.59) (26,603.85)
F-6
Cash Flow from Financing Activities
Proceeds of Long Term Borrowing
14,467.54 13,564.10 24,991.80
Repayment of Long Term Borrowing
(14,063.90) (13,433.30) (1,000.00)
Movements of Short Term Borrowing
899.74 13.70 2,550.00
Proceed from Issue of Preference Shares in Subsidiary
1,091.16 6,499.00 -
Expenses for Issue of Shares
(56.46) - (176.60)
Dividend Paid
(158.68) (158.80) (79.50)
Interest Paid
(3,365.25) (3,917.00) (1,449.20)
Net cash flow from financing activities C (1,185.85) 2,567.70 24,836.50
Net Increase in cash and Cash equivalents (A+B+C)
669.09 2,499.14 (3,133.16)
Cash and Cash equivalents
at the beginning of the period
12,644.72 10,144.10 9,608.00
as part of acquired subsidiary
390.00 - 3,669.20
Effect of Unrealised gain/(loss) on revaluation
40.41 1.61 -
at the end of the period
13,744.25 12,644.80 10,144.00
Net Increase in cash and Cash equivalents 669.12 2,499.09 (3,133.20)
Cash and cash equivalents are as per Note 17 to the financial statements (adjusted for the Book Overdraft as per Note 8)
F-7
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
A. Principles of consolidation
The financial statements of the Company and its subsidiary companies (which are not in the nature of joint
ventures) are combined on a line-by-line basis by adding together the book values of like items of assets,
liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions
resulting in unrealised profits or losses in accordance with Accounting Standard (AS) 21 - "Consolidated
Financial Statements".
In case of foreign subsidiaries, being non-integral foreign operations, revenue items are consolidated at the
average rate prevailing during the period. All assets and liabilities are converted at rates prevailing at the end
of the period. Any exchange difference arising on consolidation is recognised in the foreign exchange
translation reserve.
The difference between the costs of investment in the subsidiaries, over the net assets at the time of
acquisition of shares in the subsidiaries is recognised in the financial statements as Goodwill or Capital
Reserve as the case may be.
Minority Interest’s share of net profit of consolidated subsidiaries for the year is identified and adjusted
against the income of the group in order to arrive at the net income attributable to shareholders of the
Company.
Minority Interest’s share of net assets of consolidated subsidiaries is identified and presented in the
consolidated balance sheet separate from liabilities and the equity of the Company’s shareholders.
In case of associates where the company directly or indirectly through subsidiaries holds more than 20% of
equity, Investments in associates are accounted for using equity method in accordance with Accounting
Standard (AS) 23 - "Accounting for investments in associates in consolidated financial statements".
The Company accounts for its share in the change in the net assets of the associates, post acquisition, after
eliminating unrealized profits and losses resulting from transactions between the Company and its associates
to the extent of its share, through its profit and loss account to the extent such change is attributable to the
associates' profit and loss account and through its reserves for the balance, based on available information.
The difference between the cost of investment in the associates and the share of net assets at the time of
acquisition of shares in the associates is identified in the financial statements as Goodwill or Capital Reserve
as the case may be.
In case of joint venture companies (JVC’s), the consolidated financial statements include the interest of the
company in JVC’s, which has been accounted for using the proportionate consolidation method of accounting
and reporting whereby the Company’s share of each of the assets, liabilities, income and expenses of a jointly
controlled entity is considered as separate line items in the Consolidated Financial Statements.
As far as possible, the consolidated financial statements are prepared using uniform accounting policies for
like transactions and other events in similar circumstances and are presented in the same manner as the
Company's separate financial statements.
Investments other than in subsidiaries and associates have been accounted as per Accounting Standard (AS)
13 “Accounting for Investments”.
F-8
B. Other significant accounting policies
a. Basis of accounting:
The financial statements of the parent company are prepared as per historical cost convention on accrual basis
except certain fixed assets which are stated at fair value and comply with the generally accepted accounting
principles in India and the applicable accounting standards. The financial statements of the foreign subsidiaries
are prepared as per the Financial Reporting Standards prevalent in respective countries. Accordingly, United
Kingdom based subsidiaries are prepared in accordance with the UK financial reporting standards, UAE based
subsidiary company are prepared in accordance with International Financial Reporting Standards, Singapore
based subsidiaries are prepared in accordance with the Singapore Financial Reporting Standards and Australia
based subsidiaries are prepared in accordance with the Australia Financial Reporting Standards.
b. Use of estimates:
The preparation of financial statements requires estimates and assumptions to be made that affect the reported
amount of the assets and liabilities on the date of the financial statements and the reported amount of revenues
and expenses during the reporting period. Difference between the actual results and estimates are recognized in
the period in which the results are known/ materialized.
c. Turnover:
In line with generally accepted accounting practices, turnover comprises of net commissions earned on travel
management, service agency charges including margins in respect of tour and tour related services and
commissions/margins earned on foreign exchange transactions in the normal course of the business as Authorised
Dealer. The income arising from the buying and selling of foreign currencies has been included on the basis of
margins achieved.
d. Revenue Recognition:
In accordance with the Group’s accounting policy followed consistently, commissions/income arising from tours
and related services is accounted after netting off all direct expenditures relating thereto net of discounts. Income
from buying and selling of foreign currencies is accounted on net basis as stated in (c) above. All revenues are
accounted when there is reasonable certainty of its ultimate collection.
e. Expenditure:
All general business expenditure is accounted in the year in which it is incurred. All direct tour related expenses
including advertisement expenses for specific tour are accounted in the year in which the tours are undertaken.
Certain expenses such as cost of brochure productions and promotional materials are charged to Statement of
Profit & Loss over the season to which they relate to the extent that these costs are reasonably assured.
f. Fixed Assets:
Fixed Assets are stated at cost, less accumulated depreciation. Costs include all costs relating to acquisition and
installation of fixed assets. Intangible assets represent Software, Video Shoots and Trademarks stated at cost less
accumulated amortisation and impairments losses, if any.
g. Depreciation:
F-9
Parent Company provides depreciation on fixed assets on the written down value method at the rates prescribed
under Schedule XIV to the Companies Act, 1956. Intangible assets are amortised over a period of five to ten
years, being the expected period of use. The leasehold land is depreciated over the lease period. Leasehold
improvements are depreciated over the lease period or at the rates prescribed for Furniture in Schedule XIV to the
Companies Act, 1956, whichever is higher.
In case of foreign subsidiaries, depreciation on fixed assets is provided at the rates/method prescribed as per the
GAAPs of the respective countries which vary in case of following significant subsidiaries:
Prometheon Holdings (UK) Limited provides depreciation using the straight line method at rates calculated to
write off the cost, less residual value, of each asset over its expected useful economic life, as follows:
Freehold Land and Building - 50 years
Short Leasehold improvements - Terms of Lease
Camping Equipment - 2-5 years
Mobile Homes - 12 years
Office Equipments and Motor vehicles - 3-5 years
Costs in respect of the transfer of mobile homes from site to site have been capitalised within fixed assets
where there was a commercial reason for the move.
Cox and Kings (UK) Limited provide depreciation using the following rates on written down value method.
Short leasehold - 15%
Plant and machinery - 15%
Furniture, Fittings and Equipments - 15%
Motor vehicles - 25%
Cox and Kings Australia (Pty) Ltd. provides depreciation on following rates on Straight line method.
Furniture, Fixtures and Fittings - 20%
Office Equipment - 20%
Computer Equipment and Software - 40%
h. Impairment of assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss
is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The
impairment loss recognized in prior accounting period is reversed if there has been change in the estimate of
recoverable amount.
i. Investments:
Long-term investments are valued at cost. Provision for diminution in value of investments is made, if the
diminution is of a nature other than temporary. Current investments are valued at the lower of cost and market
value.
j. Inventory:
Inventories have been valued at lower of cost and realisable value as at the year-end. Cost represents purchase
price and is calculated using the FIFO method.
F-10
k. Employee Benefits:
(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of
profit and loss of the year in which the related service is rendered.
(ii) Post employment and other long term employee benefits are recognised as an expense in the profit and loss
account for the year in which the employee has rendered services. The expense is recognised at the present
value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to the Statement of profit and loss.
l. Foreign Currency Transactions:
(i) Transactions denominated in foreign currencies are recorded at spot rates / average rates.
(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) In respect of forward contracts, the premium paid, gains/losses on settlement and losses on restatement are
recognized in Statement of Profit and Loss.
(v) In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of
transaction or that approximates the actual rate on the date of transaction. Monetary assets and liabilities are
restated at the yearend rates.
(vi) Any income or expense on account of exchange difference either on settlement or on translation is recognised
in the profit and loss account.
.
m. Accounting for taxes on Income:
Provision for current tax is made, based on the tax payable under the relevant statute. Deferred tax on timing
differences between taxable income and accounting income is accounted for, using the tax rates and the tax laws
enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognized only to the
extent that there is a reasonable certainty of its realisation.
n. Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement are recognized when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor
disclosed in the financial statements.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-11
1 - Share Capital
(Rupees in Million)
As at As at As at
Particulars
31st March 2014 31st March 2013 31st March 2012
Authorised:
22,00,00,000 equity shares of Rs. 5 each
(In F.Y 2013-14 22,00,00,000 equity shares of Rs. 5 each, In F.Y 2012-13 22,00,00,000
equity shares of Rs.5 each and In F.Y 2011-12 22,00,00,000 equity shares of Rs.5 each). 1,100.00 1,100.00 1,100.00
1,100.00 1,100.00 1,100.00
Issued, Subscribed and Paid up:
13,65,27,890 equity shares of Rs. 5 each fully paid up
(In F.Y 2013-14 13,65,27,890 equity shares of Rs. 5 each fully paid up , In F.Y 2012-13
13,65,27,890 equity shares of Rs. 5 each fully paid up and In F.Y 2011-2012
13,65,27,890 equity shares of Rs. 5 each fully paid up).
682.64 682.64 682.64
Total 682.64 682.64 682.64
1.1 In 2012-13 3,88,87,890 equity share of face value Rs.5/- each out of issued, subscribed & paid up share capital were allotted as bonus share in the past five years
by capitalisation of reserves.
In 2011-12 3,88,87,890 equity share of face value Rs.5/- each out of issued, subscribed & paid up share capital were allotted as bonus share in the past five years by
capitalisation of reserves.
1.2 In 2012-13 20,82,630 equity share of face value Rs.5/- each out of issued, subscribed & paid up share capital were allotted in the past five years pursuant to the
contract without payment being received in cash.
In 2011-12 23,99,630 equity share of face value Rs.5/- each out of issued, subscribed & paid up share capital were allotted as bonus shares in the five years to the
contract without payment being received in cash.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-12
1.4 Reconciliation of the no. of shares outstanding at the beginning and at the end of
the year:
For the year ended on
31st March 2014
For the year ended on
31st March 2013
For the year ended
on
31st March 2012
No of shares No of shares No of shares
No of Equity Shares outstanding at the beginning of the year
13,65,27,890 13,65,27,890 6,82,63,945
Add: Subdivision (Refer Note 1.5)
- - 6,82,63,945
Less: Equity Shares forfeited/Bought back during the year
- - -
No of Equity Shares outstanding at the end of the year
13,65,27,890 13,65,27,890 13,65,27,890
1.5 The equity shares of the company of Face value of Rs. 10/- each were sub-divided into equity shares of Rs.5/- with effect from June 22, 2011
1.6 Terms/rights attached to equity shares:
The company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The
company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing
Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after
distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
1.3 Number of Equity Shares held by each shareholder holding more than 5% shares in the company are as follows:
Particulars As at 31st March, 2014 As at 31st March, 2013 As at 31st March, 2012
No of Shares
Share Holding
in %
No of Shares
Share
Holding in %
No of Shares
Share
Holding in %
Sneh Sadan Graphic Services Limited 3,30,38,368 24.20% 3,35,38,368 24.57% 3,33,53,368 24.42%
Kubber Investments (Mauritius) Pvt Ltd 1,83,46,560 13.44% 1,83,46,560 13.44% 1,83,46,560 13.44%
Liz Investments Pvt Ltd 1,51,60,849 11.10% 1,44,82,526 10.61% 1,37,63,328 10.08%
Smallcap World Fund Inc 1,05,92,000 7.76% 1,05,92,000 7.76% 1,05,92,000 7.76%
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-13
2 - Reserves And Surplus
(Rupees in
Million)
As at As at As at
Particulars
31st March
2014
31st March
2013
31st March
2012
Capital Reserves
As per last Balance Sheet
3.24 3.17 3.17
Securities Premium Account:
As per last Balance Sheet
7,438.88
7,438.88
7,615.51
Less : NCDs issue expenses
56.46
176.63
7,382.42
7,438.88
7,438.88
Debenture Redemption Reserve
As per last Balance Sheet
314.48
469.68
151.85
Additions/Deletions on account of debentures for the year: - - 318.83
Add: Transfer from Profit & Loss 198.29 - -
Less: Transfer to General Reserves -
155.20
512.77
314.48
469.68
Foreign Exchange Earning Reserve:
As per last Balance Sheet - -
5.62
Less: Transfer to General Reserves - -
(5.62)
- -
-
Revaluation Reserve:
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-14
As per last Balance Sheet
33.27
27.57
33.27
Add/( Less) : during the year
55.46
5.70
(5.70)
88.73
33.27
27.57
Foreign Exchange Translation Reserve:
As per last Balance Sheet
(27.25)
(550.20)
(320.54)
Less: Prior Period Expense (Refer note 2.1) -
(899.90)
-
Additions during the year
618.47
1,422.85
(229.66)
591.22 (27.25) (550.20)
General Reserve
As per last Balance Sheet 259.22 63.92 -
Add: Transfer from Statement of Profit and Loss
84.50
40.10
58.30
Add: Transfer from Foreign Exchange Earning Reserve - -
5.62
Less: Transfer to Debenture Redemption Reserve - - -
Add: Transfer from Debenture Redemption Reserve - 155.20 -
343.72
259.22
63.92
Surplus i.e. Balance in Profit and Loss statement
As per last Balance Sheet
4,554.21
3,787.30
3,907.24
Add: Profit for the year
3,831.73
2,484.23
416.13
Less: Appropriations
Prior Period Adjustment (Refer note 2.1) -
1,517.84
-
Debenture Redemption Reserve
198.29 -
318.83
Tax on Dividend payment for Previous Year -
0.70
0.30
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-15
Proposed Dividend*
136.53
136.53
136.53
Tax on Proposed Dividend
23.21
22.15
22.11
Transfer to General Reserves
84.50
40.10
58.30
7,943.41
4,554.21
3,787.30
Total
16,866.51
12,575.98
11,240.32
* Dividend amount per equity share proposed to be distributed to Shareholders in F.Y 2013-14 Rs.1/- per share In F.Y 2012-13 Rs.1/- per share and In F.Y 2011-12 Rs.1/- per share.
2.1 Adjustment to Reserves: In one of the Group’s subsidiaries, Prometheon Holdings (UK) Limited, there has been a change in accounting policy to treat inter-company loan
funding as non-monetary items, translating the balances at the rate prevailing when first recognised to reflect the position that such funding was in substance quasi-equity. During
the current financial year, these loans have since been capitalised as equity within Prometheon Holdings (UK) Limited. The change in accounting policy is in accordance with SSAP
20 of UK GAAP. The impact of the change in accounting policy has been to reverse a gain recognised in the prior year of STG 10.9 million(Rs.899.9 Million ) . In the previous
year, a loss of STG 12.8 Million ( Rs.1,056.70 Million) arose in respect of certain US dollar forward currency contracts to which the subsidiary, Prometheon Holdings (UK) Ltd was
a party and which matured on 19th January 2012. In the accounts for the year ended 31st March 2012, a proportion of this loss was capitalised as a debt issue cost, which should
have been recognised as an expense in that period. Further, there were certain expenses to the tune of STG 5.53 million (Rs. 461.8 Million) in relation to Debt for the acquisition of
Holiday Break Ltd. which were either capitalised or were being amortised over the period of debt in the accounts for the year ended 31st March 2012. In accordance with the UK
GAAP, the above amounts totalling to Rs. 1,518.50 Million pertaining to prior period have been adjusted in the opening reserves apart from Foreign Exchange Gain of Rs. 899.9
Million which has been adjusted against Foreign Exchange Translation Reserve on consolidation.
3 - Long Term Borrowings
(Rupees in Million)
As at 31st March
2014
As at 31st March
2013 As at 31st March 2012
Particulars Current
Non
Current Current
Non
Current Current
Non
Current
Secured
Non Convertible Debentures 1,250.00 2,950.00 - 2,700.00 - 6,000.00
Term Loans from Banks 2,538.62 43,702.14 4,058.24 35,912.08 8,987.80 25,712.75
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-16
Vehicle Loans from Banks 0.15 0.52 0.14 0.67 1.24 -
Vehicle Loans from Others 0.29 1.07 0.11 0.51 0.62 -
Term Loans from Financial Institutions 196.40 317.20 - - - -
Lease Obligations (Refer Note No.28) 315.98 173.62 458.79 318.36 566.80 799.00
Unsecured
Non Convertible Debentures - 250.00 - 250.00 - 2000.00
Term Loans from Banks 676.60 - 500.00 - - -
Total 4,978.05 47,394.55 5,017.29 39,181.61 9,556.47 34,511.75
3.1 Term Loans comprising of:
In the year 2013-14
(a) Secured Non Convertible debentures to the extent Rs.1,700 Million are secured by First Pari Passu charge on all Fixed and Current Assets of the Company.
(b) Secured Non Convertible debentures to the extent Rs.1,000 Million are secured by First Pari Passu charge on all Current Assets of the Company.
(c) Secured Non Convertible debentures to the extent Rs.750 Million are secured by Pari Passu charge on receivables of the Company.
(d) Secured Non Convertible debentures to the extent Rs.750 Million are secured by Subservient charge on Current Assets of the Company.
(e) Secured Term Loan from Financial Institution to the extent of Rs.513.6 Million is secured by subservient charge on the fixed assets, second charge on current
assets, pledge of 14,02,500 shares of Tulip star Hotel Ltd.held by the company.
(f) Secured Term Loan from Bank Rs.34.8 Million are secured by Second charge on over all assets of Cox & Kings Travel Ltd.and Cox & Kings (UK) Ltd. and
Fixed charge on Fixed assets and current assets of East India Travel Company Inc.,
(g) Secured Term Loan from Bank Rs.567.7 Million are secured by bank guarantee given by parent company for Cox & Kings Singapore Pvt. Ltd.
(h) Secured Term Loan from Bank Rs.3,286.7 Million are secured by First Charge on the Debt Service Reserve account , Corporate guarantees and Pledge of
100% shares given by Cox & Kings Singapore Pvt. Ltd , Cox & Kings Travel Ltd and Cox & Kings (UK) Ltd.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-17
(i) Secured Term Loan from Bank Rs.1,792.7 Million are secured by Corporate guarantees of Cox & Kings Ltd , Cox & Kings (Australia) Pty Ltd and Cox &
Kings Tours LLC, Dubai . Pari-Pasu share security of Cox & Kings Singapore and Cox & Kings Ltd.and First and exclusive security over all the shares and assets
of Cox & Kings (Australia) Pty Ltd and all its subsidiaries.
(j) Secured Term Loan from Bank Rs.10,912.1 Million are secured by pledge of shares of Holidaybreak Ltd., Corporate Guarantee of the Company and First
charge on receivables of Prometheon Holdings (UK) Ltd.
(k) Secured Term Loan from Bank Rs.18,200 Million are secured by freehold properties of certain subsidiary undertakings of Holidaybreak Ltd.
(l) Secured Finance Lease Obligations to the extent Rs.480 Million are secured by freehold properties of certain subsidiary undertakings of Holidaybreak Ltd.
(m) Secured Finance Lease Obligations to the extent Rs.9.6 Million are secured by IT Servers of Cox and Kings Travel Ltd.
(n) Secured Term Loan from Bank Rs.11,446.70 Million are secured by pledge of shares of Prometheon Enterprises Ltd, Corporate Guarantee of the Company
and second charge on fixed Assets and Current Assets of the Company.
(o) Vehicle Loans are secured by hypothecation of respective vehicles purchased.
(p) Two of the Promoter Directors has given Personal Guarantee for Unsecured Loan from Bank.
In the year 2012-13
(a) Secured Non Convertible debentures to the extent Rs.1,700 Million are secured by First Pari Passu charge on all Fixed and Current Assets of the Company.
(b) Secured Non Convertible debentures to the extent Rs.1,000 Million are secured by First Pari Passu charge on all Current Assets of the Company.
(c) Secured Term Loan from Bank to the extent Rs.267.7 Million is secured against Credit Card Receivables, second charge on the current assets of the company,
present and future, and Personal Guarantee of two Directors.
(d) Secured Term Loan from Bank to the extent Rs.223.7 Million is secured by first ranking charge on all Current Assets, both present and future, excluding credit
card receivables.
(e) Secured Term Loan from Bank Rs.406.5 Million are secured by first charge on Fixed assets and current assets of East India Travel Company Inc., pledge of
shares of East India Travel Company Inc. and second charge over all assets of Cox and Kings Travel Ltd. and Cox & Kings (UK) Ltd.
(f) Secured Term Loan from Bank Rs. Nil Million are secured by fixed charged on all current and future revenue, moveable and immovable assets including
intangible assets of Cox and Kings (Australia) Pty Ltd. And its subsidiaries and a collateral security by way of pledge of shares of the company and its
subsidiaries.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-18
(g) Secured Term Loan from Bank Rs. 1,783 Million are secured by bank guarantess given by parent company for Cox and Kings Singapore Pvt. Ltd..
(h) Secured Term Loan from Bank Rs. 10,850.2 Million are secured by pledge of shares of Holidaybreak Ltd., Corporate Guarantee of the Company and First
charge on receivables of Prometheon Holdings (UK) Ltd.
(i) Secured Term Loan from Bank Rs. 15,707.8 Million are secured by freehold properties of certain subsidiary undertakings of Holidaybreak Ltd.
(j) Secured Finance Lease Obligations Rs. 777.2 Million are secured by freehold properties of certain subsidiary undertakings of Holidaybreak Ltd.
(k) Secured Term Loan from Bank Rs. 10,731.4 Million are secured by pledge of shares of Prometheon Enterprises Ltd, Corporate Guarantee of the
Company and second charge on fixed Assets and Current Assets of the Company.
(l) Vehicle Loans are secured by hypothecation of respective vehicles purchased.
(m) A Promoter Director has given Personal Guarantee for unsecured loan Rs.500 Million.
In the year 2011-12
(a) Secured Non Convertible debentures to the extent Rs.5,000 Million are secured by First Pari Passu charge on Fixed & Current Assets of the Company.
(b) Secured Non Convertible debentures to the extent Rs.1,000 Million are secured by First Pari Passu charge on Current Assets of the Company.
(c) Secured Term Loan from Bank to the extent Rs.473.5 Million is secured against Credit Card Receivables, second charge on the current assets of the company ,
present and future and Personal Guarantee of two Directors.
(d) Secured Term Loan from Bank to the extent Rs.95 Million is secured by pledge of shares held by company in JV Company and Personal Guarantee of two
directors.
(e) Secured Term Loan from Bank to the extent Rs.500 Million is secured by Subservient charge on Present & Future Fixed assets & Second Pari Passu charge on
Current Assets of the Company.
(f) Secured Term Loan from Bank to the extent Rs.333.1 Million is secured by first ranking charge on all Current Assets, both present and future, excluding credit
card receivables.
(g) Secured Term Loan from Bank Rs.572.8 Million are secured by fixed and floting charged over all assets of Cox and Kings Travel Ltd.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-19
(h) Secured Term Loan from Bank Rs.524.0 Million are secured by fixed charged on all current and future revenue, moveable and immovable assets including
intangible assets of Cox and kings (australia) Pty Ltd. And its subsidiaries and a collateral security by way of pledge of shares of the company and its subsidiaries.
(i) Secured Term Loan from Bank Rs. 2,495.3 Million are secured by bank guarantees given by parent company for Cox and Kings Singapore Pvt. Ltd..
(j) Secured Term Loan from Bank Rs. 29,706.8 Million are secured by freehold properties of certain subsidiary undertakings pledge of shares of Prometheon
Holdings (UK) Ltd and subsequent Pari Passu charge on fixed Assets of the Company .
(g) Vehicle Loans are secured against the respective vehicles purchased.
In the year 2013-14
3.2 Maturity Profile and rate of interest of Non-convertible debentures are set
out below:
(Rupees in Million)
Rate of Interest 2015-16 2016-17 2017-18 2018-19
Secured Debentures
400 Non Convertible Debentures 11.25% - 150.00 - -
1,300 Non Convertible Debentures 11.30% - 1,300.00 - -
1,000 Non Convertible Debentures 11.25% - - - -
750 Non Convertible Debentures 11.75% - 750.00 - -
750 Non Convertible Debentures 10.50% - - - 750.00
Unsecured Debentures
250 Non Convertible Debentures 10.60% 250.00 - - -
Total
250.00 2,200.00 - 750.00
3.3 Maturity Profile of other loans is set out below: (Rupees in Million)
2015-16 2016-17 2017-18 2018-19
Secured Loans:
Term Loan from Banks 21,107.48 6,423.83 6,897.36 9,273.13
Vehicle Loan 0.60 0.55 0.54 -
Term Loan from Others 227.20 60.00 30.00
Unsecured Loans:
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-20
Term Loan from Banks 112.72 40.56 20.28 -
Total 21,449.00 6,524.95 6,948.19 9,273.13
In the year 2012-13
3.2 Maturity Profile and rate of interest of Non-convertible debentures are set out below: (Rupees in Million)
Rate of Interest 2014-15 2015-16 2016-17
Secured Debentures
400 Non Convertible Debentures 11.25% - 250.00 150.00
1,300 Non Convertible Debentures 11.30% - - 1,300.00
1,000 Non Convertible Debentures 11.25% 1000.00 - -
Unsecured Debentures
250 Non Convertible Debentures 10.60% 250.00 - -
- -
Total
12,500 2,500 14,500
3.3 Maturity Profile of other loans is set out below:
(Rupees in Million)
2014-15 2015-16 2016-17
2017-18 &
After
Secured Loans:
Loan from Banks 3,649.45 3,714.52 4,051.85 24,814.62
Vehicle Loan 0.27 0.30 0.33 0.29
Total 3,649.71 3,714.81 4,052.18 24,814.91
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-21
In the year 2011-12
3.2 Maturity Profile and rate of interest of Non-convertible debentures are set out
below:
(Rupees in Million)
Rate of
Interest 2013-14 2014-15 2015-16 2016-17
Secured Debentures
2,500 Non Convertible Debentures 11.25% - 750.00 750.00 1000.00
1,200 Non Convertible Debentures 11.70% - 400.00 400.00 400.00
1,300 Non Convertible Debentures 11.30% - - - 1,300.00
1,000 Non Convertible Debentures 11.25% - 1,000.00 - -
Unsecured Debentures
2,000 Non Convertible Debentures 10.60% - 1,000.00 1,000.00 -
Total
- 3,150.00 2,150.00 2,700.00
3.3 Maturity Profile of other loans is set out below:
(Rupees in Million)
2013-14 2014-15 2015-16 2016-17 2017-18
& After
Term Loan from Banks 14,883.57 2,597.90 1,517.70 1,576.72 5,136.77
Vehicle Loan 1.76 - - - -
Total 14,885.33 2,597.90 1,517.70 1,576.72 5,136.77
4 - Deferred Tax Liability (Net):
(Rupees in Million)
As at As at As at
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Deferred Tax Liability
Related to Fixed Assets 699.90 746.37 766.31
699.90 746.37 766.31
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-22
Deferred Tax Assets
Related to Fixed Assets 1.08 66.65 17.20
1.08 66.65 17.20
5 - Long- Term Provisions
(Rupees in Million)
Particulars
As at
31st March, 2014
As at
31st March, 2013
As at
31st March, 2012
Provision for Employee Benefits 244.80 101.50 265.70
Total 244.80 101.50 265.70
6 - Short Term Borrowings
(Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
Secured Loan
From Banks
- Working Capital Loan 1,568.64 1,813.64 1,000.00
- Other Short Term Loan 394.74 - -
Unsecured Loan
- Other Short Term Loan 1,500.00 750.00 1,549.96
Total 3,463.38 2,563.64 2,549.96
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-23
In the year 2013-14
6.1 Working Capital Loan Rs.1,157.6 Million is secured by First Pari Passu charge on all Fixed & Current Assets of the Company and personal guarantee
of two directors.
6.2 Working Capital Loan Rs.411.00 Million is secured by first charge on over all assets of Cox and Kings Travel Ltd.and Cox & Kings (UK) Ltd. and
second charge on Fixed assets and current assets of East India Travel Company Inc.First charge on freehold residential property of Cox & Kings Travel
Limited and Corporate guarantee of Cox & Kings Limited, the holding company.
6.3 Other short Term Loan Rs.244.70 Million is secured by by first charge on over all assets of Cox and Kings Travel Ltd.and Cox & Kings (UK) Ltd. and
second charge on Fixed assets and current assets of East India Travel Company Inc.
6.4 Other short Term Loan Rs.150.00 Million is secured by residential flats owned by Promoter Director having Market Value at around 100 Million &
Pledge of Shares capital aggregating Rs.300 Million comprising of Equity (Rs.100 Million) as well as preference shares (Rs.200 Million).
In the year 2012-13
6.1 Working Capital Loan Rs.1,450.50 Million is secured by First Pari Passu charge on all Fixed & Current Assets of the Company and personal guarantee
of two directors.
6.2 Working Capital Loan Rs.Nil Million is secured by First charge on one Residential flat and whole of Current Assets of the Company.
6.3 Working Capital Loan Rs.363.10 Million is secured by First charge on Fixed & Current Assets of Cox and Kings Travel Ltd.
In the year 2011-12
6.1 Working Capital Loan is secured by First Pari Passu charge on Fixed & Current Assets of the Company.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-24
7 - Trade Payables
(Rupees in Million)
As at As at As at
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Trade payables
Micro, Small and Medium Enterprises - - -
Others 5,427.69 4,699.74 4,249.17
Total 5,427.69 4,699.74 4,249.17
7.1 Micro, Small and Medium Enterprises:
The particulars required to be disclosed under the Micro, Small and Medium Enterprises Act, 2006 (MSMED Act) in respect of principal amount remaining unpaid to any
supplier as at the end of the year, amount due to the suppliers beyond the appointed day during the year, amount of interest if any, accrued and remaining unpaid as at the
end of the year etc. could not be disclosed for want of information whether sundry creditors include dues payable to any such undertakings.
8 - Other Current Liabilities (Rupees in Million)
Particulars
As at
31st March
2014
As at
31st March
2013
As at
31st March
2012
Current maturities of long-term debt (Refer Note No. 3) 4,662.07 4,558.50 8,989.67
Current maturities of finance lease obligations (Refer Note No. 3) 315.98 458.79 566.80
Interest accrued but not due on borrowings 26.65 156..15 367.80
Unpaid dividends* 0.18 0.14 0.10
Unpaid Application money* # [Rs.0.17 Million Rs..0.17 Million & Rs.
0.17 Million in FY 2013-14, FY 2012-13 & FY 2011-12 respectively)
0.02 0.02 0.02
Book overdraft 42.01 47.74 388.67
Income received in advance (Unearned revenue) 10,326.95 7,067.14 6,999.29
Other payables (including statutory dues payable and advance from
customers)
5,805.59 4,878.62 4,403.76
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-25
Total 21,179.45 17,167.09 21,717.10
*No amount is due to Investor Education and Protection Fund.
9 - Short-Term Provisions (Rupees in Million)
Particulars
As at
31st March,
2014
As at
31st March,
2013
As at
31st March,
2012
Provision-Others:
Provision for Employee Benefits 20.38 43.80 103.71
Proposed Dividend 136.53 136.53 136.63
Tax on proposed dividend 23.21 22.15 22.14
Provision for Tax (Net of Advance Tax) 463.21 174.13 253.20
Total 643.33 375.62 514.68
10. Fixed Assets - Tangible
(Rupees in Million)
Description of Assets
Gross Block Accumulated Depreciation Net Block
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
As at 31st
March, 2014
As at 31st
March,
2013
As at 31st
March,
2012
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
Owned Assets:
Lease Hold Land 46.90 39.70 77.10 26.40 19.80 24.60 20.50 19.90 52.50
Land & Building 14,459.40 11,790.60 11,765.30 662.80 514.40 328.90 13,796.60 11,276.20 11,436.40
Computer and Printers 1,714.10 1,451.50 1,355.20 951.00 730.80 599.80 763.10 720.70 755.40
Electrical Installations & Fittings 367.30 306.50 289.70 140.90 100.90 114.30 226.40 205.60 175.40
Office Equipments 376.90 332.40 311.40 156.10 138.30 116.00 220.80 194.10 195.40
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-26
Furniture & Fixtures 1,371.50 954.50 840.20 351.90 256.20 189.40 1,019.60 698.30 650.80
Mobile Homes &
Camping Equipment 9,585.70 7,702.20 7,579.00 4,604.10 3,648.50 3,361.90 4,981.60 4,053.70 4,217.10
Motor Car 78.90 79.80 93.40 38.80 35.10 40.70 40.10 44.70 52.70
Lease Assets:
Lease Hold Improvements 2,030.20 1,696.60 1,126.80 216.70 133.00 201.70 1,813.50 1,563.60 925.10
TOTAL 30,030.90 24,353.80 23,438.10 7,148.70 5,577.00 4,977.30 22,882.20 18,776.80 18,460.80
Previous Year 24,353.80 23,438.10 1,566.60 5,577.00 4,977.30 687.10 18,776.80 18,460.80 879.50
Add: Capital Work In Progress -
Tagible
470.70 115.10 486.40
10.1 Additions to gross block includes Rs.304.9 Million, Rs. Nil and Rs.23.014.6 Million in FY 2013-14, FY 2012-13 & FY 2011-12 respectively on account of consolidation of
new subsidiaries at its net Assets value.
10.2 Disposal/Adjustments to gross block includes Rs.4,636.6 Million, Rs. 305.5 Million & Rs. 145.6 Million in FY 2013-14, FY 2012-13 & FY 2011-12 respectively and
depreciation adjustments includes Rs. 1,053.9 Million, Rs. 365 Million & Rs. 766 Million in FY 2013-14, FY 2012-13 & FY 2011-12 respectively on account of foreign exchange
difference on consolidation.
10.3 Capital Work in Progress and addition includes rent capitalised Rs. Nil Million, Rs. 16.4 Million & Rs. 73.9 Million in FY 2013-14, FY 2012-13 & FY 2011-12 respectively.
11. Fixed Assets – Intangible
(Rupees in Million)
Description of Assets
Gross Block Accumulated Depreciation Net Block
As at 31st
March,
2014
As at 31st
March, 2013
As at 31st
March, 2012
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
Computer Softwares
2,250.00
1,621.80
1,462.10
1,226.40
818.00
817.60
1,023.60
803.80
644.50
Trade Marks
3.10
4.70
3.10
0.80
1.00
0.60
2.30
3.70
2.50
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-27
Videos
47.40
47.40
47.40
21.60
15.60
8.00
25.80
31.80
39.40
TOTAL
2,300.50
1,673.90
1,512.60
1,248.80
834.60
826.20
1,051.70
839.30
686.40
Previous Year
1,673.90 1,512.60
273.90
834.60
826.20
132.40
839.30
686.40
141.50
Add: Capital Work In
Progress - Intangible
1,717.30
1,319.30
751.10
11.1 Disposal/Adjustments to gross block includes Rs.215.5 Million, Rs.30.9 Million & Rs. 14.2 Million in FY 2013-14, FY 2012-13 & FY 2011-12
respectively and depreciation adjustments includes Rs.122.2 Million, Rs.10.8 Million & Rs.12.4 Million in FY 2013-14, FY 2012-13 & FY 2011-12
respectively on account of foreign exchange difference on consolidation.
11.2 Intangible under development and additions include Employee Benefit Expenses Capitalised Rs.89.5 Million Rs.118 Million & Rs.77.9 Million in FY
2013-14, FY 2012-13 & FY 2011-12 respectively and rent Rs.12.7 Million, Rs. 4.2 Million & Rs. Nil Million in FY 2013-14, FY 2012-13 & FY 2011-12
respectively.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-28
12 - Non Current Investments
(Rupees in Million)
Particulars
As at 31st
March 2014
As at 31st March
2013
As at 31st March
2012
Non CURRENT INVESTMENTS (Unquoted, Non Trade)
Investments in Equity Instruments of Others:
Ezeego One Travel and Tours Limited 100.00
100.00
100.00
In F.Y 2013-14 9,000 Equity Share of Rs.10/- Each fully paid-up,
In F.Y 2012-13 9,000 Equity Share of Rs.10/- Each fully paid-up and
In F.Y 2011-12 9,000 Equity Share of Rs.10/- Each fully paid-up.
Business India Publications Limited 2.48
2.50
2.50
In F.Y 2013-14 45,000 equity shares of Rs 10/- each fully paid-up,
In F.Y 2012-13 45,000 equity shares of Rs 10/- each fully paid-up and
In F.Y 2011-12 45,000 equity shares of Rs 10/- each fully paid-up.
New Media Spark Plc 0.99
0.81
0.81
In F.Y 2013-14 10,000 equity shares of GBP 1 each fully paid-up,
In F.Y 2012-13 10,000 equity shares of GBP 1 each fully paid-up and
In F.Y 2011-12 10,000 equity shares of GBP 1 each fully paid-up.
Greater Bombay Co-Op Bank Limited - - *0
In F.Y 2013-14 Nil shares at Rs.Nil Million
In F.Y 2012-13 Nil shares at Rs.Nil Million and
In F.Y 2011-12 40 shares at Rs. 25 each fully paid-up (*Rs.0.01 Million).
Radius the Global Travel Company
In F.Y 2013-14 619.78 Shares of Class B Common Voting shares fully paid-
up,
In F.Y 2012-13 619.78 Shares of Class B Common Voting shares fully paid-
up & In F.Y 2011-12 649 Shares of Class B Common Voting shares fully
paid-up.
176.34
133.27
147.47
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-29
In F.Y 2013-14 10 Shares of Class A Common Non-Voting Shares fully paid-
up.
In F.Y 2012-13 10 Shares of Class A Common Non-Voting Shares fully paid-
up.
In F.Y 2011-12 10 Shares of Class A Common Non-Voting Shares fully paid-
up.
0.55
0.55
0.61
Meininger Holding GMBH* -
4,096.07
2,471.26
In F.Y 2013-14 Nil Shares
In F.Y 2012-13 22,200 Equity shares of Euro 1 each fully paid-up and
In F.Y 2011-12 15,000 Equity shares of Euro 1 each fully paid-up
Adventure Travel Experience Inc 13.72
11.39
7.93
In F.Y 2013-14 1000 Shares of $ 0.01 each
In F.Y 2012-13 1000 Shares of $ 0.01 each
In F.Y 2011-12 1000 Shares of $ 0.01 each
Tutors Direct Limited 24.92
20.70
-
In F.Y 2013-14 250,000 preference shares of £1 each , 667,000 ordinary
shares of £0.001 each
In F.Y 2012-13 250,000 preference shares of £1 each , 667,000 ordinary
shares of £0.001 each
In F.Y 2011-12 Nil preference shares , Nil ordinary shares .
Tute Education Limited 1.92
1.65
-
In F.Y 2013-14 4000 Ordinary Share of £0.001 each , 5000 Ordinary Share
of £0.001 each (purchased @ £ 4 each)
In F.Y 2012-13 4000 Ordinary Share of £0.001 each , 5000 Ordinary Share
of £0.001 each (purchased @ £ 4 each)
In F.Y 2011-12 Nil Ordinary Share , Nil Ordinary Share .
Non CURRENT INVESTMENTS (Quoted, Non Trade)
Investments in Equity Instruments of Associates:
Tulip Star Hotels Limited 0.08
16.14
30.41
In F.Y 2013-14 14,02,500 Equity Shares of Rs.10/- each fully paid-up,
In F.Y 2012-13 14,02,500 Equity Shares of Rs.10/- each fully paid-up and
In F.Y 2011-12 14,02,500 Equity Shares of Rs.10/- each fully paid-up
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-30
Pledge against the loans taken from Banks/Financial Institutions by
Company/Subsidiaries.
Total 321.00
4,383.09
2,761.00
Aggregate Amount of quoted investments 0.08
16.14
30.41
Aggregate Amount of unquoted investments 320.92
4,366.95
2,730.58
Market Value of quoted investments 106.73
182.33
230.01
In F.Y 2013-14 * The Company acquired the balance 26% in the subsidiary
Meininger Holidays GMBH on 30th April, 2013 for Rs.2,568.20 Million. The
financials are consolidated, line by line basis, from the date of such
acquisition, as company attained full management control as per shareholder's
agreement from such date. Until then, the accounts were consolidated only as
share of profit from associates. Hence, the comparative figures of previous
financial year are not comparable with current year.
13 - Long Term Loans And Advances
(Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
(Unsecured and considered good)
Capital Advances - - 19.29
Deposits (Including Security & EMD Deposits) 150.74 151.30 322.32
Total 150.74 151.30 341.61
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-31
14 - Current Investments
(Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
CURRENT INVESTMENTS (Unquoted, Non Trade)
Investments in Debentures:
V Hotels Limited 180.00 180.00 180.00
In F.Y 2013-14 1,800,000 24% Convertible Debentures of
Rs 100/- each fully paid-up,
In F.Y 2012-13 1,800,000 24% Convertible Debentures of
Rs 100/- each fully paid-up and
In F.Y 2011-12 1,800,000 24% Convertible Debentures of
Rs 100/- each fully paid-up.
Ezeego One Travel and Tours Limited 100.00 100.00 100.00
In F.Y 2013-14 100,000 12% Fully Convertible Debentures
of Rs. 1,000/- each fully paid-up,
In F.Y 2012-13 100,000 12% Fully Convertible Debentures
of Rs. 1,000/- each fully paid-up and
In F.Y 2011-12 100,000 12% Fully Convertible Debentures
of Rs. 1,000/- each fully paid-up,
Investments in Units of Mutual Funds:
Kotak Indo World Infrastructure Fund - Growth Plan 0.63 0.70 0.70
In F.Y 2013-14 58,567 Units of Rs. 10 each fully paid up.
In F.Y 2012-13 100,000 Units of Rs. 10 each fully paid up
and
In F.Y 2011-12 100,000 Units of Rs. 10 each fully paid up. Axis Liquid Fund-Daily Dividend 0.20 0.11 -
In F.Y 2013-14 115.905 Units of Rs.1,000 each fully paid up
In F.Y 2012-13 108.887 Units of Rs.1,000 each fully paid up
In F.Y 2011-12 Nil Units.
Total 280.83 280.92 280.70
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-32
15 - Inventories
(at cost or net realisable value whichever is lower) (Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
Foreign Currency 42.22 61.52 58.49
Stock - tickets, food, mobile homes and other retail items 156.87 124.44 114.10
Total 199.09 185.95 172.59
16- Trade Receivables
(Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
(Unsecured and considered good)
Outstanding for a period exceeding six month from the date that
are due for payments 281.78 152.67 42.19
Others 11,074.06 8,901.35 7,108.50
Total 11,355.84 9,054.02 7,150.69
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-33
17 - Cash and Bank Balances
(Rupees in
Million)
Particulars
As at 31st
March 2014
As at 31st
March 2013
As at 31st
March 2012
Cash and Cash Equivalent
Balances with banks
In Current Accounts 9,532.33 8,181.88 8,421.75
In Unpaid Dividend Accounts 0.20 0.14 0.08
Cash on hand 54.29 39.95 22.35
* Includes cheques on hand In F.Y 2013-14 for Rs.Nil
In F.Y 2012-13 for Rs. 4,921
In F.Y 2011-12 for Rs.Nil.
Other Bank Balance
Margin Money Deposit 1,788.72 84.90 37.07
(Given as security for Bank Guarantee & Overdraft limits)
Fixed Deposits* 2,410.72 4,385.60 2,051.60
* In F.Y 2013-14 Rs.23,739 Million ,In 2012-13 Rs.43,856 Million & In 2011-12 Rs.20,748
Million Fixed Deposits having original maturity period more than twelve months.
*In F.Y 2013-14 Rs.368 Million ,In 2012-13 Rs.NIL & In 2011-12 Rs.NIL of fixed Deposits
having original maturity period not more than three months.
Total 13,786.25 12,692.47 10,532.84
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-34
18 - Short Term Loans And Advances (Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
(Unsecured and considered good)
Loans and Advances to related parties (Refer Note No. 26) 931.24 925.44 839.40
Loans and Advances to others 2,144.85 792.88 482.31
Advance Tax Paid (Net of Provision) 95.85 136.64 -
Deposits (Including Security & EMD Deposits) 97.52 284.83 -
Others (including Advances against supplies and services, Staff
Advances, prepaid expenses and other advances) 8,772.71 6,147.31 6,890.20
Total 12,042.17 8,287.09 8,211.91
19 - Other Current Assets (Rupees in Million)
As at As at As at
Particulars 31st March 2014 31st March 2013 31st March 2012
Others 16.55 33.10 16.50
Total 16.55 33.10 16.50
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-35
20 - Revenue From Operations
(Rupees in Million)
For the year ended For the year ended For the year ended
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Income from operation
Travel and Tours Commission 22,691.29 17,827.36 8,238.28
Income from Forex Division 311.33 248.97 137.39
Other Operating Income 73.29 11.06 3.70
Total 23,075.92 18,087.40 8,379.37
21 - Other Income
(Rupees in Million)
For the year ended For the year ended For the year ended
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Interest
From Current Investment 76.05 62.85 60.45
From Banks 14.01 15.49 53.00
From Others 185.17 280.08 59.44
Dividend
From Current Investment 1.20 7.82 53.55
Net Gain on Sale of Investments
From Current Investment 0.17 - 81.89
Other Non operating Income
Profit on Sale of Fixed Assets 95.07 81.38 0.88
Others 58.99 140.23 46.42
Total 430.67 587.85 355.64
(Rupees in Million)
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-36
22 - Employee Benefit Expenses
For the year ended For the year ended For the year ended
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Salaries and wages 7,662.33 6,181.30 3,414.37
Contribution to provident and other funds 858.76 600.90 352.89
Staff welfare expenses 226.78 175.35 84.28
Total 8,747.87 6,957.55 3,852.54
23 - Finance Costs
(Rupees in Million)
For the year ended For the year ended For the year ended
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Interest expense 3,191.49 3,227.60 1,734.04
Other borrowing costs 44.26 477.90 108.91
Total 3,235.76 3,704.50 1,841.95
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-37
24 - Other Expenses
(Rupees in Million)
For the year ended For the year ended For the year ended
Particulars 31st March, 2014 31st March, 2013 31st March, 2012
Rent 1,382.77 535.26 332.10
Rates & Taxes (excluding taxes on income) 4.89 0.67 24.25
Electricity Charges 229.03 84.46 45.50
Insurance 158.79 131.60 102.28
Payment to Auditors
Audit Fees 79.80 67.61 56.21
Certification Fees 12.62 7.82 1.71
Taxation Matter 25.30 18.80 18.68
11.77 9.42 7.66
Communication and Courier Expenses 158.05 340.26 167.41
Professional Charges 232.23 321.95 258.52
Travelling Expenses 301.89 364.34 241.24
Advertisement, Publicity & Business Promotion 1,056.79 1,251.12 987.21
Bad debts 4.89 2.76 5.27
Donation 9.13 22.26 12.36
Directors Sitting Fees & Commissions 2.30 2.45 4.24
Computer Expenses 488.73 255.32 146.32
Miscellaneous expenses 1,262.08 497.17 451.50
Loss on sale of assets 17.29 1.13 -
Exchange Fluctuation (2,204.50) 44.16 (1,304.65)
Total 3,222.09 3,949.13 1,550.15
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-38
25 - Segment Reporting:
The Company is mainly engaged in Tours and Travel activity. All activity of the company revolves around this main business. As such, there are no separate
reportable segments as per the Accounting Standard 17 (Segment Reporting) notified by Companies (Accounting Standard) Rules, 2006.
Reporting in respect of secondary segment is as under:
(Rupees in Million)
Particulars As at 31st March, 2014 As at 31
st March, 2013 As at 31
st March, 2012
Segment Revenue (External Turnover):
India
4,247.55 3,773.06 2,989.50
Rest of World
18,828.37 14,314.29 5,389.80
Segment Assets:
India
24,104.47 21,168.81 23,582.50
Rest of World
80,703.06 62,282.54 52,915.90
Segment Liabilities:
India
23,121.33 10,055.42 14,024.30
Rest of World
72,798.16 54,781.18 50,550.40
Capital Expenditure:
India
523.64 724.40 1,009.70
Rest of World 6,533.50 970.50 23,178.00
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-39
26 - As per the Accounting Standard 18, the disclosure of transactions with the related parties as defined in the accounting standards, are given below
(a) List of the related parties where control exist and related parties with whom transactions have taken place and relationship.
Sr. No. Name of the Related Party
A Associate:
1 Tulip Star Hotels Ltd.
2 Radius Global Travel Ltd.
3 Adventure Travel Experience Inc
4 Meininger Holding GmbH (Upto 30th April 2013)
5 Tutors Direct Limited (With effect from 20th April 2012)
6 Tute Education Limited (With effect from 22nd August 2012)
B Key Managerial Personnel:
7 Mr. A.B.M Good – Chairman
8 Mr. Peter Kerkar – Director
9 Ms. Urrshila Kerkar – Director
C Others:
(i) Joint Venture:
10 Royale Indian Rail Tours Limited
(ii) Enterprises over which Key Managerial Personnel have exercise significant influence:
11 Far Pavilions Tours and Travels Pvt. Ltd.
12 Ezeego One Travel and Tours Limited
(iii) Relatives of Key Managerial Personnel exercise significant influence:
13 Mrs. Elizabeth Kerkar
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-40
(b) Transaction during the year with related parties:
(Amount in Rs. In Million)
Related
Party Nature of Transaction FY 2013-14 FY 2012-13 FY 2011-12
Associates
Transaction durring the year:
Purchase/Subscription of Investments
- 1,718.80 2,626.00
Loans and advances given/(returned/taken)
47.80 40.40 22.70
Purchase
58.18 79.00 38.50
Sales
44.14 41.60 -
Interest Received on Loans/Advance
3.48 - 24.50
Dividend Received
162.85 351.20 -
Commission
- - 15.40
Balance as at 31st March, 2014 Investments
60.57 4,169.00 2,645.90
Trade Receivable
0.28 7.10 -
Loan & Advances
312.70 259.00 218.20
Trade payable - 10.30 -
Key
Managerial
Personnel
Transaction during the year:
Sales
2.44 - -
Payment to Key Managerial Person
17.69 17.40 18.10
Director Fees & commission paid 0.26 0.30 0.20
Others
Transaction durring the year:
Loans and advances given/(returned/taken)
(57.51) 46.80 67.90
Purchase
3,884.27 301.40 538.90
Sales
3,162.54 3,241.80 3,916.50
Interest Received on Loans/Advance
12.00 12.00 92.50
Reimbursement of Expenses
- 12.61 -
Balance as at 31st March, 2014 Investments
225.00 225.00 225.00
Trade Receivable
1,026.90 613.20 624.20
Advance from Customer
- (0.20) -
Loan & Advances
618.54 666.40 621.20
Trade payable
160.81 89.20 112.50
Advance to Vendors - (7.30) -
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-41
Disclosure in respect of significant related party transaction during the year.
1. Purchases of Investment includes Rs. Nil Million, Rs. 1,718.80 Million & Rs. 2,479.20 Million in the financial year 2013-14, 2012-13 & 2011-12 respectively
in Meininger Holding Gmbh. Rs. Nil, Rs. Nil & Rs.146.80 Million in the financial year 2013-14, 2012-13 & 2011-12 respectively in Radius Global Travel
Ltd.
2. Loan given during the year inlcludes Rs.Nil Million, Rs.29.30 Million & Rs.22.70 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively to
Tulip Star Hotel Ltd., Rs.25.60 Million, Rs. 34.20 Million & Rs. 48.20 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively to Ezeego One
Travels & Tours Ltd., Rs.Nil Million, Rs. 11.70 Million & Rs. 11.30 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively to Far Pavilion
Tours & Travels Ltd. Rs.72.10 Million, Rs. 11.10 Million & Rs. Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively to Tute Education
Limited, Rs. Nill, Rs. Nil & Rs.8.50 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively to Royale Indian Rail Tours Ltd.
Loan returned during the year inlcludes Rs.24.30 Million, Rs. Nil & Rs. Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively by Tulip Star
Hotel Ltd. and Rs.83.10 Million, Rs. Nil & Rs. Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively by Far Pavilion Tours & Travels Ltd.
3. Purchases include Rs.3,884.30 Million, Rs. 301.40 Million & Rs. 361.70 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively from
Ezeego One Travels & Tours Ltd., Rs.8.60 Million, Rs. 79 Million & Rs. Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively from Meininger
Holding GmbH and Rs.Nil, Rs.Nil & Rs.177.20 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively from Royal Indian Rail Tours Ltd.
4 Sales include Ezeego One Travels and Tours Ltd. Rs.3,162.50 Million, Rs.3,241.80 Million & Rs. 3,864.60 Million in the financial year 2013-14, 2012-13 and
2011-12 respectively, Rs.40.70 Million, Rs.41.60 Million & Rs. Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively by Meininger Holding
Gmbh and Rs.Nil, Rs. NIL & Rs. 51.90 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively by Royal Indian Rail Tours Ltd.
5 Payment to Key Management Person includes Rs.16 Million, Rs.16 Million & Rs. 18.10 Million in the financial year 2013-14, 2012-13 and 2011-12
respectively paid to Ms. Urrshila Kerkar and Rs.1.70 Million, Rs.1.40 Million & Rs. 2.10 Million in the financial year 2013-14, 2012-13 and 2011-12
respectively paid to Peter Kerkar.
6 Director fees paid to Key Management Person includes Rs.0.2 Million, Rs. 0.1 Million & Rs. 0.1 Million in the financial year 2013-14, 2012-13 and 2011-12
respectively paid to Mr. A.B.M.Good and Rs.0.1 Million, Rs.0.2 Million & Rs. 0.1 Million in the financial year 2013-14, 2012-13 and 2011-12 respectively to
Mr. Peter Kerkar.
7 Interest received includes Ezeego One Tours & Travels Ltd. Rs.12. Million, Rs. 12 Million & Rs. 58.60 Million in the financial year 2013-14, 2012-13 and
2011-12 respectively and Rs. Nil, Rs.Nil & Rs. 24.50 Million from Tulip Star Hotels Ltd.in the financial year 2013-14, 2012-13 and 2011-12 respectively.
8 Dividend received includes Rs.162.80 Million, Rs.351.20 Million & Rs.Nil in the financial year 2013-14, 2012-13 and 2011-12 respectively by Meininger
Holding Gmbh.
9 Commission paid on sales of Adventure Travel Experience Inc. Rs. Nil, Rs. Nil & Rs.15.40 Million in the financial year 2013-14, 2012-13 and 2011-12
respectively.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-42
27 - In compliance with AS – 27 ‘Financial Reporting of Interests in Joint Ventures’, the required information is as under:
a) Jointly controlled entities
Particulars Country of
Incorporation Percentage of ownership interest
as on
31.03.2014
as on
31.03.2013
as on
31.03.2012
Royal Indian Rail Tours Limited India 50% 50% 50%
b) The Company's share of assets, liabilities, income, expenditure, contingent liabilities and capital commitments compiled on the basis of unaudited financial
statements received from joint ventures is as follows:
(Rs. in Million)
Particulars As at 31.03.2014*
As at
31.03.2013*
As at
31.03.2011*
(i) Assets
225.97
– Long Term Assets 23.25
– Current Assets 202.72
(ii) Liabilities 312.83
– Loans (Secured & Unsecured 131.25
– Current Liabilities and Provisions 181.28
– Deferred Tax 0.30
(iii) Income 136.38
(iv) Expenses 210.80
(v) Miscellaneous Expenditure to extent not written off 16.55
For the reasons stated in note 37 (b), the company has not received the financials of the Joint Venture for financial year 2011-12, 2012-13 & 2013-14.
Hence, the figures of the company’s share in the assets and liabilities of the joint venture as at 31st March, 2014 and the income and expenses for the year
ended on that date as required by Accounting Standard AS 27 – Financial Reporting of Interests in Joint Venture have not been stated.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-43
28 - Leases
A. Tangible assets includes assets given on operating lease
(Rupees in Million)
Description of Assets
Gross Block Accumulated Depreciation Net Block
FY
2014-13
FY
2012-13
FY
2011-12
FY
2014-13
FY
2012-13
FY
2011-12
FY
2014-13
FY
2012-13
FY
2011-12
Owned Assets
Building # 1.70
1.70
1.70 1.00
0.90
0.90
0.07
0.08
0.08
Furniture & Fixtures ** 43.50 - - 3.90 - -
3.96 - -
Electrical Equipments ** 4.40 - - 0.40 - -
0.40 - -
Office Equipments ** 1.40 - - 0.10 - -
0.13 - -
Total Amount (Rs.) 51.00 1.70 1.70 5.40 0.90 0.90
4.56 0.08 0.08
* Depreciation for the year includes Rs.0.039 Million.
# In respect of the above arrangements, lease rent of Rs. 0.3 Million, Rs.0.3 Million & Rs.0.2 Million for the FY 2014 , FY 2013 and FY 2012 respectively are
recognised in the Statement of Profit and Loss for the year and included under Other Income.
** In respect of the above arrangements, lease rent of Rs. 5.7 Million in FY 2014 and Previous years Rs. Nil are recognised in the Statement of Profit and Loss for the
year and included under Other Operating Income.
B. The minimum lease rentals and the present value of minimum value of minimum lease payments in respect of assets acquired under leases are as follows:
(Rupees in Million)
Particulars Total Minimum Lease Payments Outstanding
Future Interest on Outstanding
Lease Payments
Present Value of minimum lease
payments
As at 31st
March, 2014
As at 31st
March, 2013
As at 31st
March, 2012
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
As at 31st
March,
2014
As at 31st
March,
2013
As at 31st
March,
2012
Not later than one year 325.26 473.87 566.85 9.27 15.06 24.44
315.98 458.81 542.41
Later than one year but not later
than five years 178.89 325.25 799.00 5.27 6.86 57.02
173.62 318.39 741.98
Later than five year - - - - - -
- - -
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-44
C. The company has operating lease in respect of office premises. Further lease rentals payable in respect of the above which are non cancellable is as
follows:
(Rupees in Million)
Particulars As at 31
st
March, 2014
As at 31st
March, 2013
As at 31st
March, 2012
Not later than one year 2,937.19 1,455.57 263.33
Later than one year but not later than five years 5,064.12 750.02 628.82
Later than five year 9,033.49 115.09 NIL
29 - Earnings Per Share (EPS) Basic and Diluted
Particulars
As at 31st
March, 2014
As at 31st
March, 2013
As at 31st
March, 2012
Net Profit after Tax as per Statement of Profit & Loss attributable to Equity
Shareholders before exceptional item (Rs. in Million)
4,287.90 3,027.82 727.76
Net Profit after Tax as per Statement of Profit & Loss attributable to Equity
Shareholders after exceptional item (Rs. in Million)
3,831.73 2,484.17 415.97
Weighted average number of Equity Shares (Basic) (No. in Million) 136.50 136.50 136.50
Weighted average number of Equity Shares (Diluted) (No.in Million) 136.50 136.50 136.50
Basic & Diluted Earnings Per Share before exceptional item (EPS) (In Rs.) 31.41 22.18 5.33
Basic & Diluted Earnings Per Share after exceptional item (EPS) (In Rs.) 28.07 18.20 3.05
Face Value Per Equity Shares (In Rs.) 5/- 5/- 5/-
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-45
30 - Commitments
(Rupees in Million)
Particulars
As at 31st
March, 2014
As at 31st March,
2013
As at 31st March,
2012
Estimated amount of contracts remaining to be executed on capital account
and not provided 0 27.10 75.90
31. Financial Derivative Instruments:
A. Derivative contract entered into by the company for hedging currency risk and outstanding:
Nominal amount of forward contract entered into by the company and outstanding amounting to Rs.8,594.60 Million, Rs. 125.90 Million and Rs. 1,975.40
Million as on 31st March 2014, 31st March 2013 and 31st March 2012 respectively.
(Rupees in Million)
Particulars Amount in foreign
Currency
Equivalent amount
in Rs.
As at As at As at As at As at As at
31st March,
2014
31st March,
2013 31st March, 2012
31st March,
2014
31st March,
2013
31st March,
2012
EUR 38.77 0.13 0.33 3,185.96 16.41 16.70
GBP 2.70 1.22 24.00 269.71 100.36 1,954.90
USD 81.93 0.30 0.06 4,895.92 9.09 3.80
NOK 3.25 - - 32.31 - -
CHF 0.01 - - 0.99 - -
ZAR 5.05 - - 27.49 - -
THB 5.00 - - 8.85 - -
MAD 4.00 - - 27.45 - -
BWP 1.20 - - 7.78 - -
CAD 0.80 - - 41.67 - -
AUD 1.25 - - 69.07 - -
NZD 0.55 - - 27.41 - -
Total 144.51 1.65 24.38 8,594.61 125.86 1,975.40
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-46
B. Derivative contract entered into by the company for hedging Interest rate risk and outstanding:
Nominal amount of interest rate swap contract entered into by the company and outstanding amounting to Rs. 20,682.20 Million, Rs. 11,558.60 Million and
Rs.10,621.80 Million on 31st March 2014, 31st March 2013 and 31st March 2012 respectively.
(Rupees in Million)
Particulars
Amount in foreign
Currency
Equivalent amount
in Rs.
As at As at As at As at As at As at
31st March,
2014
31st March,
2013
31st March,
2012
31st March,
2014 31st March, 2013
31st March,
2012
GBP 190.00 140.00 130.40 18,889.46 11,558.60 10,621.80
USD 30.00 - - 1,792.74 - -
Total 220.00 140.00 130.40 20,682.20 11,558.60 10,621.80
C. Derivative contract entered into by the company for hedging Composite (FX & Interest rate) risk and
outstanding:
Nominal amount of interest rate swap contract entered into by the company and outstanding amounting to Rs. 11,930.20 Million, Rs. 6,604.90 Million and Rs. Nil
as on 31st March 2014, 31st March 2013 and 31st March 2012 respectively.
(Rupees in Million)
Particulars Amount in foreign
Currency
Equivalent amount
in Rs.
As at As at As at As at As at As at
31st March,
2014
31st March,
2013
31st March,
2012
31st March,
2014 31st March, 2013
31st March,
2012
GBP 120.00 80.00 - 11,930.18 6,604.91 -
Total 120.00 80.00 - 11,930.18 6,604.91 -
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-47
D. Foreign Currency Exposure that are not hedged by derivative instruments:
Foreign Currency Exposure that are not hedged by derivative instruments amounting to Rs.20,117.20 Million, Rs. 26,091.60 Million and Rs.
544.70 Million as on 31st March 2014, 31st March 2013 and 31st March 2012 respectively.
(Rupees in Million)
Particulars Equivalent amount in USD Amount in INR
As at As at As at As at As at As at
31st March,
2014
31st March,
2013
31st March,
2012
31st March,
2014 31st March, 2013
31st March,
2012
Trade Receivables 50.45 24.72 0.10 3,019.61 1,342.18 2.60
Trade Payables (8.91) (10.20) (0.74) (533.52) (553.50) (58.10)
Advances to Vendor 5.68 2.88 1.43 340.20 156.32 33.35
Banks 10.12 15.62 1.10 605.81 847.72 63.58
Borrowing 260.94 425.79 6.70 15,617.36 23,114.11 333.10
Unsettled Travellers' Cheque 0.01 1.43 1.10 0.72 77.74 54.00
Total 318.30 460.25 9.69 19,050.18 24,984.57 428.53
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-48
32 - Contingent Liabilities:
(Rupees in Million)
Particulars
As at 31st March,
2014
As at 31st March,
2013 As at 31st March, 2012
Guarantees:
Guarantees given by Bank 4,195.88 4,349.65 2,800.20
Bonds given by insurance companies 1,403.29 987.68 -
Others 27.98 426.15 3,282.70
Tax demands
Disputed income Tax Demand 43.82 95.38 75.40
Disputed Service Tax demand 1,290.78 1,290.78 1,290.78
Legal Claims
Claim against the Company not acknowledged as debts 139.34 107.12 105.30
Total 7,101.08 7,256.77 7,554.38
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-49
33. Basis of consolidation
a) The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss and Consolidated Cash flow Statement (together referred to as Consolidated
Financial Statements) comprises financial statements of Cox & Kings Limited and its subsidiaries and the interest of the Company in joint ventures, in the
form of jointly controlled entities for the year ended 31st March, 2014.
b) Subsidiary companies considered in these Consolidated Financial Statements are:
Name of Subsidiary Company Country of
Incorporation
Proportion of ownership interest
As at 31st
March, 2014
As at 31st
March,
2013
As at 31st
March,
2012
Cox & Kings (UK) Ltd. UK 100.00% 100.00% 100.00%
Step down subsidiaries :
C & K Investments Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings (Agents) Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Finance (Mauritius) Ltd. Mauritius 100.00% 100.00% 100.00%
Cox & Kings Enterprises Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Finance Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Holdings Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Shipping Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Special Interest Holidays Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Tours Ltd. UK 100.00% 100.00% 100.00%
Cox & Kings Travel Ltd. UK 100.00% 100.00% 100.00%
East India Travel Company Inc. USA 100.00% 100.00% 100.00%
ETN Services Ltd. UK 100.00% 100.00% 100.00%
Grand Tours Ltd. UK 100.00% 100.00% 100.00%
Clearmine Ltd. UK 100.00% 100.00% 100.00%
Step down subsidiary :
Cox & Kings Destination Management Services Ltd. UK 100.00% 100.00% 100.00%
Cox and Kings (Australia) PTY Ltd. Australia 100.00% 100.00% 100.00%
Step down subsidiaries :
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-50
Cox and Kings Nordic PTY Ltd. Australia 100.00% 100.00% 100.00%
Tempo Holidays NZ Ltd New Zealand 100.00% 100.00% 100.00%
Tempo Holidays PTY Ltd Australia 100.00% 100.00% 100.00%
Ltd. UK 100.00% 100.00% 100.00%
Step down subsidiaries :
Cox & Kings Global Services Sweden AB Sweden 100.00% 100.00% -
Cox & Kings Singapore Pvt. Ltd. Singapore 100.00% 100.00% 100.00%
Cox & Kings Tours LLC UAE 100.00% 100.00% 100.00%
Cox & Kings (Japan) Ltd. Japan 100.00% 100.00% 100.00%
Cox & Kings Asia Pacific Travel Ltd Hong Kong 100.00% 100.00% 100.00%
Cox and Kings Global Services Private Ltd India 100.00% 100.00% 100.00%
Quoprro Global Services Pvt. Ltd. India 100.00% 100.00% 100.00%
Cox and Kings Global Services (Singapore) Pte. Ltd. Singapore 100.00% 100.00% 100.00%
Step down subsidiaries :
Cox & Kings Global Services Management (Singapore) Pte. Ltd. Singapore 100.00% 100.00% 100.00%
Cox & Kings Global Services LLC UAE 100.00% 100.00% 100.00%
Cox and Kings Consulting Service (Beijing) Co. Ltd. China 100.00% 100.00% -
Quoprro Global Hellas Greece 100.00% 100.00% 100.00%
Cox and Kings Gmbh Germany 100.00% 100.00% 100.00%
Quoprro Global Services Pte. Ltd. Singapore 100.00% 100.00% 100.00%
Quoprro Global Services Pvt. Ltd. Hongkong 100.00% 100.00% 100.00%
Cox & Kings Egypt Egypt 100.00% 100.00% -
Cox & Kings Global Services Lanka Pvt. Ltd. Srilanka 100.00% 100.00% -
Cox and Kings Destinations Management Services Pvt. Ltd. Singapore 100.00% 100.00% 100.00%
Prometheon Holdings Private Ltd Mauritius 100.00% 100.00% 100.00%
Step down subsidiary
Prometheon Holdings Ltd UK 100.00% 100.00% 100.00%
Prometheon Enterprise Ltd. UK 100.00% 100.00% 100.00%
Step down subsidiaries : -
Prometheon Holdings (UK) Ltd. UK 65.58% 66.50% 100.00%
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-51
Step down subsidiary
Prometheon Limited UK 65.58% 66.50% 100.00%
Holidaybreak Limited UK 65.58% 66.50% 100.00%
SASu Le Chateau d’Ebblinghem France 65.58% 66.50% 100.00%
SARL Chateau d’Ebblinghem France 65.58% 66.50% 100.00%
PGL Air Travel Ltd. England 65.58% 66.50% 100.00%
PGL Voyages Ltd. England 65.58% 66.50% 100.00%
PGL Travel Ltd. England 65.58% 66.50% 100.00%
PGL Adventure Ltd. England 65.58% 66.50% 100.00%
Freedom of France Ltd. England 65.58% 66.50% 100.00%
Noreya SL Spain 65.58% 66.50% 100.00%
PGL Adventure SAS France 65.58% 66.50% 100.00%
Travelplus Group Gmbh Germany 65.58% 66.50% 100.00%
Simpar Sasu France 65.58% 66.50% 100.00%
Chateau de Lamorlaye SCI France 65.58% 66.50% 100.00%
SCI Domaine de Segries France 65.58% 66.50% 100.00%
Hertford Travel Group Ltd. England - 66.50% 100.00%
European Study Tours Ltd. England 65.58% 66.50% 100.00%
NST Holdings Ltd. England 65.58% 66.50% 100.00%
NST Travel Group Ltd. England 65.58% 66.50% 100.00%
PGL Group Ltd. England 65.58% 66.50% 100.00%
EST Transport Purchasing Ltd. England 65.58% 66.50% 100.00%
Explore Worldwide Ltd. England 65.58% 66.50% 100.00%
Explore Aviation Ltd. England 65.58% 66.50% 100.00%
Explore Worldwide Adventures Ltd. Canada 65.58% 66.50% 100.00%
Regal Diving and Tours Ltd. England 65.58% 66.50% 100.00%
Djoser BV (Upto 8th
February 2013) Netherlands - 66.50% 100.00%
Djoser-Divantoura BVBA (Upto 8th
February 2013) Belgium - 66.50% 100.00%
Superbreak Mini-Holidays Ltd. England 65.58% 66.50% 100.00%
Business Reservations Centre Holland BV Netherlands 65.58% 66.50% 100.00%
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-52
Bookit BV Netherlands 65.58% 66.50% 100.00%
BV Weekendjeweg.nl Netherlands 65.58% 66.50% 100.00%
Business Reservations Centre Holland Holding BV Netherlands 65.58% 66.50% 100.00%
Superbreak Mini Holidays Group Ltd. England 65.58% 66.50% 100.00%
Greenbank Holidays Ltd. England 65.58% 66.50% 100.00%
ECampBV (formerly known as Easycamp BV) Netherlands 65.58% 66.50% 100.00%
RM&S Reise Marketing & Service Gmbh
(formerly Ecamp Gmbh) Germany
65.58% 66.50% 100.00%
Holidaybreak Reisevermittlung Gmbh
(formerly Eurocamp Travel Gmbh) Germany
65.58% 66.50% 100.00%
Eurocamp Travel AG Switzerland 65.58% 66.50% 100.00%
Ecamp AG Switzerland 65.58% 66.50% 100.00%
Eurosites BV Holland 65.58% 66.50% 100.00%
Parkovi Sunca d.o.o Croatia 65.58% 66.50% 100.00%
Camping in Comfort BV Netherlands 65.58% 66.50% 100.00%
Edge Adventures Limited
(formerly known as Keyline Continental Ltd.)
England 65.58% 66.50% 100.00%
Keycamp Holidays Netherlands BV Netherlands 65.58% 66.50% 100.00%
Keycamp Holidays Ireland Ltd. Ireland 65.58% 66.50% 100.00%
Eurosites AS Denmark 65.58% 66.50% 100.00%
Eurocamp Travel BV Netherlands 65.58% 66.50% 100.00%
Camping Division Ltd. England 65.58% 66.50% 100.00%
Sites Services SARL France 65.58% 66.50% 100.00%
Greenbank Packages Ltd. England 65.58% 66.50% 100.00%
Greenbank Services Ltd. England 65.58% 66.50% 100.00%
Own A Holiday Home Ltd. England 65.58% 66.50% 100.00%
Holidaybreak Trustee Ltd. England 65.58% 66.50% 100.00%
Holidaybreak Holding Company Ltd. Isle of Man 65.58% 66.50% 100.00%
Holidays Ltd. England 65.58% 66.50% 100.00%
Holidaybreak Education Ltd. England 65.58% 66.50% 100.00%
Meininger Travel Holdings Gmbh Germany - 66.50% 100.00%
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-53
NST Ltd. Ireland 65.58% 66.50% 100.00%
NST Transport Services Ltd. England 65.58% 66.50% 100.00%
Depot Starvillas SARL France 65.58% 66.50% 100.00%
Eurocamp Independent Limited England 65.58% 66.50% 100.00%
Eurocamp Limited England 65.58% 66.50% 100.00%
GHL Transport Limited England 65.58% 66.50% 100.00%
Holidaybreak Quest Trustee Limtied England 65.58% 66.50% 100.00%
Hotelnet Limited England 65.58% 66.50% 100.00%
SAS Travelworks France France 65.58% 66.50% 100.00%
Select Sites Ltd England 65.58% 66.50% 100.00%
Starvillas Ltd England 65.58% 66.50% 100.00%
Travelplus Group Gmbh Austria 65.58% 66.50% 100.00%
Travelworks UK Limited England 65.58% 66.50% 100.00%
Hole In The Wall Management Limited England 65.58% - -
Holidaybreak Hotel Holdings Limited Germany 65.58% - -
Holidaybreak Hotel Holdings GmbH England 65.58% - -
Meininger Amsterdam Amstelstation BV Germany 65.58% - -
PGL Travel PTY Limited Australia 65.58% - -
PGL Property PTY Limited Australia 65.58% - -
PGL Adventure Camps PTY Limited Australia 65.58% - -
Meininger Amsterdam B.V. Netherlands 65.58% - -
Meininger Shared Services Gmbh Germany 65.58% - -
Meininger Berlin Hauptbahnhof Gmbh Germany 65.58% - -
Meininger “10” Hamburg Gmbh Germany 65.58% - -
Meininger Airport Frankfurt Gmbh Germany 65.58% - -
Meininger Brussels Gmbh Germany 65.58% - -
Meininger West Gmbh & Co. Kg Germany 65.58% - -
Meininger West Verwaltungs Gmbh Germany 65.58% - -
Meininger “10” City Hostel Köln Gmbh Germany 65.58% - -
Meininger “10” Frankfurt Gmbh Germany 65.58% - -
Meininger Oranienburger Straße Gmbh Germany 65.58% - -
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-54
Meininger Nürnberg Gmbh Germany 65.58% - -
Meininger “10” City Hostel Berlin-Mitte Gmbh Germany 65.58% - -
Meininger “10” Hostel Und Reisevermittlungs Gmbh Germany 65.58% - -
Meininger Airport Hotels Bbi Gmbh Germany 65.58% - -
Meininger Potsdamer Platz Gmbh Germany 65.58% - -
Meininger Barcelona Gmbh Germany 65.58% - -
Meininger City Hostels & Hotels Gmbh Austria 65.58% - -
Meininger Limited England 65.58% - -
Meininger Hotelerrichtungs Gmbh Austria 65.58% - -
Meininger Wien Gmbh Austria 65.58% - -
Meininger Wien Schiffamtsgasse Gmbh Austria 65.58% - -
Meininger Holiding GmbH Germany 65.58% - -
Results of subsidiaries acquired are included in the consolidated financial statements from the effective dates of acquisition and upto disposal.
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-55
c. Associate companies considered in these Consolidated Financial Statements are:
Name of Subsidiary Company
Country of
Incorporation
Proportion of ownership interest
As at 31st
March, 2014
As at 31st
March, 2013
As at 31st
March, 2012
Tulip Star Hotel Ltd. India 30.42% 30.42% 30.42%
Radius Global Travel Ltd. USA 29.09% 28.33% 28.33%
Meininger Holding Gmbh* (Upto 30th April 2013) Germany 74.00% 74.00% 50.00%
Adventure Travel Experience Inc USA 48.00% 48.00% 48.00%
Tutors Direct Ltd England 40.00% 40.00% -
Tute Education Ltd England 40.00% 40.00% -
* The Company acquired the balance 26% in the subsidiary Meininger Holidays GMBH on 30th April, 2013 for Rs.2,568.20 Million. The financials
are consolidated, line by line basis, from the date of such acquisition, as company attained full management control as per shareholder's agreement
from such date. Until then, the accounts were consolidated only as share of profit from associates. Hence, the comparative figures of previous financial
year are not comparable with current year.
d. Joint Venture companies considered in these Consolidated Financial Statements are:
Name of Joint Venture Companies Country of
Incorporation
Proportion of ownership interest
As at 31st
March, 2014
As at 31st
March, 2013
As at 31st
March, 2012
Royale Indian Rail Tours Ltd. India 50.00% 50.00% 50.00%
Cox & Kings Limited
Notes to Consolidated Financial Statements for the year ended 31st March, 2014
F-56
34. The audited financial statement of foreign Subsidiaries has been prepared in accordance with the Generally Accepted Accounting Principles of its country of
incorporation or International Financial Reporting Standard, as applicable. Material differences in accounting policies of the Company and its subsidiaries are
not material except as stated under: -
Name of Subsidiary Particulars For year ended
31st March 2014
For year ended
31st March 2013
For year ended
31st March 2012
Cox and Kings (Australia) Pty. Ltd. and its subsidiaries Depreciation (Rs. in Million) 9.20 12.80 37.70
Proportion to the item 1% 1% 8%
Prometheon Enterprise Limited and its subsidiaries Depreciation (Rs. in Million) 1,351.80
1,150.20 268.10
Proportion to the item 79% 78% 55%
35 - Other Notes
(a) Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification /
disclosure.
(b) The Royale India Rail Tours Ltd.(RRITL) is a 50:50 joint venture between Indian Railway Catering and Tourism Corporation (IRCTC)
and Cox and Kings Ltd. The Supreme Court has dismissed the Special Leave Petition filed by the company and
directed both the parties to go for arbitration. It also made it clear that the observations made by the Courts shall not, in any way,
influence the outcome of the arbitral proceedings, if resorted to by the parties. The arbitration proceedings were continuing as at the year
end. The company consolidated the last available financial for year ended 31st March 2011.
(c) In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the company’s business,
which is at least equal to the amount at which they are stated in the balance sheet.
(d) Exceptional items for the year ended 31st March 2014 comprises of costs of restructuring and realigning businesses of Holidaybreak
Limited, UK subsequent to it's acquisition and for the year ended 31st March 2013 it comprises of Rs. 192.50 Million towards
redundancy cost in the Campaign business in UK, Denmark & Netherland; Rs. 77.10 Million profit on sale of Djoser BV; Rs. 428.30
Million towards foreign exchange loss on revalution of Bank Loan and Inter Company Loans for acquisition purposes.
F-57
To,
The Board of Directors
Cox & Kings Limited
Turner Morrison Building, 1st Floor
16 Bank Street, Fort
Mumbai 400 001
Maharashtra, India
Independent Auditors’ Report on Proforma Consolidated Financial Results for the year ended March 31, 2014 and six
month period ended September 30, 2014 in connection with the Proposed qualified institutions placement of equity shares
of face value of Rs. 5 each (the “Equity Shares”) of the Company under Chapter VIII of Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI Regulations”) and section
42 of the Companies Act, 2013 (the “Issue”).
Ladies and Gentlemen:
1. This report is issued in accordance with the terms of our engagement letter dated November 14, 2014.
2. The accompanying Proforma Consolidated Financial Results for the year ended March 31, 2014 and six month period ended
September 30, 2014 ( (hereinafter referred to as the “Proforma Consolidated Financial Results”) of Cox & Kings Limited
(hereinafter referred to as the “Company”) read with the notes thereto, has been prepared by the Management of the Company
to reflect the impact of sale of camping businesses operated through subsidiary Holidaybreak Limited situated in United
Kingdom in September 2014 and as further set out in the basis of preparation paragraph included in the notes to the Proforma
Results, which is initialled by us for identification purposes only.
3. For our examination of Proforma Consolidated Financial Results, we have placed reliance on the following:
a) the audited consolidated financial statements of the Company for the year ended March 31, 2014 on which we have
expressed an unmodified opinion in our reports dated May 30, 2014.
b) the management certified consolidated results for the six months period ended September 30, 2014 publish as per
requirement of clause 41 of the listing agreement.
c) the financial information for the year ended March 31, 2014 and six month period ended September 30, 2014 relating to
the camping businesses on which subsidiary’s auditor have given their report dated November 10, 2014.
4. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical
financial information used in compiling the Proforma Consolidated Financial Results, nor have we, in the course of this
engagement, performed an audit or review of the financial information used by the Management in the compilation of the
Proforma Consolidated Financial Results.
Managements’ Responsibility for the Proforma Consolidated Financial Results
5. The preparation of the Proforma Consolidated Financial Results which is to be included in the Preliminary Placement
Document/Placement Document prepared in connection with the proposed qualified institutions placement of equity shares is
the responsibility of the Management of the Company. The Board of Directors’ responsibility includes designing,
implementing and maintaining internal control relevant to the preparation and presentation of the Proforma Consolidated
Financial Results.
Auditors’ Responsibilities
6. Our responsibility to express an opinion on whether the Proforma Consolidated Financial Results of the Company for year
ended March 31, 2014 and six month period ended September 30, 2014, as attached to this report, read with the notes thereto
have been properly prepared by the Management of the Issuer Company on the basis stated in the note no. 2 to the Proforma
Consolidated Financial Results.
7. We conducted our engagement in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes,
issued by the Institute of Chartered Accountants of India. Our examination of the Proforma Results has not been carried out in
accordance with the auditing standards generally accepted in the United States of America (“U.S.”) and accordingly should not
be relied upon by U.S.investors as if it had been carried out in accordance with those standards or any other standards besides
the standards referred to in this report.
8. The purpose of the Proforma Consolidated Financial Results is to reflect the impact of sale of camping businesses operated
through subsidiary Holidaybreak Limited situated in United Kingdom in September 2014, as set out in the note no. 2 to the
Proforma Consolidated Financial Results and solely to illustrate the impact this significant event on the historical consolidated
financial results of the Company, as if the event had occurred at an earlier date selected for purposes of illustration and based
F-58
on the judgements and assumptions of the Management of the Company to reflect the hypothetical impact, and, because of its
hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be
indicative of the consolidated financial results of the Company for year ended March 31, 2014 or six month period ended
September 30, 2014 or any future periods.
9. Our work consisted primarily of comparing the respective columns in the Proforma Consolidated Financial Results to the
underlying audited historical financial information, referred to in paragraph 3 above, considering the evidence supporting the
adjustments and reclassifications, performing procedures and discussing the Proforma Consolidated Financial Results with the
Management of the Company. This engagement did not involve independent examination of any of the underlying financial
information.
10. We have not audited any financial statements of the Company as of any date or for any period subsequent to March 31, 2014.
Accordingly, we do not express any opinion on the financial position, results or cash flows of the Company as of any date or
for any period subsequent to March 31, 2014.
11. We have no responsibility to update our report for events and circumstances occurring after the date of the report.
12. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to
provide us with sufficient evidence to issue this report.
13. We believe that the procedures performed by us provide a reasonable basis for our opinion.
Opinion
14. In our opinion the Proforma Consolidated Financial Results of the Company for year ended March 31, 2014 and six month
period ended September 30, 2014, as attached to this report, read with respective the notes thereto have been properly prepared
by the Management of the Company on the basis stated in the note no. 2 to the Proforma Consolidated Financial Results.
Restrictions on Use
15. This report is addressed to and is provided to enable the Board of Directors of the Company to include this report in the
Preliminary Placement Document/Placement Document prepared in connection with the proposed qualified institutions
placement of equity shares.
For M/s Chaturvedi & Shah
Chartered Accountants
Firm Registration Number: 101720W
Amit Chaturvedi
Partner
Membership Number: 103141
Place: Mumbai
Date : November 18, 2014
F-59
Statement of Consolidated Proforma Audited Financial Results for Year Ended March 31, 2014
(Rs. in Million)
Year Ended March 31,2014
Particulars Audited
Adjustments for
Camping Operations
disposal
Proforma
1. Income from operations
(a) Net Sales / income from operations 23,075.92 (3,779.84) 19,296.08
(b) Other operating income - - -
Total Income from operations (net) 23,075.92 (3,779.84) 19,296.08
2. Expenses
a) Employee benefit expense 8,747.87 (1,789.19) 6,958.68
b) Depreciation and amortization expense 1,711.30 (733.90) 977.40
c) Other expenses 3,222.09 (311.59) 2,910.49
Total expenses ( a to c) 13,681.26 (2,834.69) 10,846.57
3. Profit/ (Loss) from operations before other income,
finance costs and exceptional items (1-2) 9,394.66 (945.15) 8,449.51
4. Other income 430.67 (111.29) 319.38
5.
Profit/ (Loss) from ordinary activities before finance
costs and exceptional items (3+4) 9,825.33 (1,056.44) 8,768.89
6. Finance costs 3,235.76 (134.53) 3,101.23
7.
Profit/ (Loss) from ordinary activities after finance
costs but before exceptional items (5-6) 6,589.57 (921.92) 5,667.66
8. Exceptional items 456.17 (240.15) 216.02
9.
Profit / (Loss) from ordinary activities before tax
(7+8) 6,133.40 (681.76) 5,451.64
10. Tax expense 1,642.83 120.89 1,763.72
11.
Net Profit / (Loss) from ordinary activities after tax
(9-10) 4,490.57 (802.65) 3,687.92
12. Extraordinary items - - -
13. Net Profit / (Loss) for the period (11-12) 4,490.57 (802.65) 3,687.92
14. Share of profit/ (loss) of associates
(15.42) -
(15.42)
15. Minority Interest (643.42) 276.27
(367.15)
16.
Net profit/ (loss) after taxes, minority interest and
share of profit/ (loss) of associates(13+14+15) 3,831.73 (526.38) 3,305.35
F-60
Statement of Consolidated Proforma Financial Results for half year ended September 30, 2014
(Rs. in Million)
Half year ended September 30,2014
Particulars Unaudited
Adjustments
for Camping
Operations
disposal
Proforma
1. Income from operations
(a) Net Sales / income from operations 16,061.98 (3,583.93) 12,478.04
(b) Other operating income - - -
Total Income from operations (net) 16,061.98 (3,583.93) 12,478.04
2. Expenses
a) Employee benefit expense 5,133.00 (1,306.13) 3,826.87
b) Depreciation and amortization expense 1,422.21 (831.73) 590.48
c) Other expenses 3,460.67 (151.34) 3,309.33
Total expenses ( a to c) 10,015.88 (2,289.20) 7,726.68
3. Profit/ (Loss) from operations before other income,
finance costs and exceptional items (1-2) 6,046.09 (1,294.73) 4,751.36
4. Other income 266.66 2.42 269.08
5. Profit/ (Loss) from ordinary activities before finance costs and
exceptional items (3+4) 6,312.75 (1,292.31) 5,020.44
6. Finance costs 1,818.32 (9.98) 1,808.34
7. Profit/ (Loss) from ordinary activities after finance costs but
before exceptional items (5-6) 4,494.44 (1,282.33) 3,212.10
8. Exceptional items 3,058.24 (1,748.16) 1,310.08
9. Profit / (Loss) from ordinary activities before tax (7+8) 1,436.20 465.83 1,902.02
10
. Tax expense 1,159.34 (551.43) 607.91
11
. Net Profit / (Loss) from ordinary activities after tax (9-10) 276.85 1,017.25 1,294.11
12
. Extraordinary items - - -
13
. Net Profit / (Loss) for the period (11-12) 276.85 1,017.25 1,294.11
14
. Share of profit/ (loss) of associates (5.72) - (5.72)
15
. Minority Interest (67.55) (350.14) (417.69)
16
.
Net profit/ (loss) after taxes, minority interest and share of
profit/ (loss) of associates(13+14+15) 338.69 1,367.39 1,706.08
F-61
Notes to Proforma Consolidated Financial Results for the year ended March 31, 2014 and six month period ended
September 30, 2014
1. Basis of Preparation
The Pro forma Consolidated Financial Results of the Company for the year ended March 31, 2014 and six month period ended
September 30, 2014, read with the notes (together referred to as Proforma Consolidated Financial Results”) has been prepared
at the request of the Book Running Lead Managers to reflect the sale of camping businesses operated through subsidiary
Holidaybreak Limited situated in United Kingdom in September 2014. Because of their nature, the pro forma financial
information addresses a hypothetical situation and, therefore, do not represent Cox and Kings Limited’s (the “Company”)
actual results of the operations. They purport to indicate the results of operations that would have resulted had the sale of
camping businesses been completed at the beginning of the period presented, but are not intended to be indicative of expected
results or operations in the future periods. The pro forma adjustments are based upon available information and assumptions
that the management of the Company believes to be reasonable. Such pro forma financial information has not been prepared
in accordance with the requirements of Regulation S-X of the U.S. Securities and Exchange Commission or generally
accepted practice in the United States of America ("U.S."). Accordingly, the degree of reliance placed by U.S. investors on
such pro forma information should be limited. In addition, the rules and regulations related to the preparation of pro forma
financial information in other jurisdictions may also vary significantly from the basis of preparation as set out in paragraphs
below to prepare these Pro forma Consolidated Financial Results.
The Pro forma Consolidated Financial Results are based on:
a) the audited consolidated profit and loss account of the Company for the year ended March 31, 2014 redrawn as per the
format prescribed in clause 41 of the listing agreement;
b) the management certified consolidated results for the six months period ended September 30, 2014 publish as per
requirement of clause 41 of the listing agreement.
c) the financial information relating to the operations of the subsidiaries engaged in camping businesses for the year ended
March 31, 2014 and six month period ended September 9, 2014 derived by the management from the consolidation
workings of the subsidiary Holidaybreak Limited for the relevant period.
2. Proforma Adjustments
The following adjustments have been made to present the Proforma Consolidated Financial Results:
a) On June 2, 2014, the company entered into the agreement to sell all of the camping business that were operated through
subsidiary Holidaybreak Limited. The camping businesses were located in Europe and were operated through different
subsidiaries of the Holidaybreak Limited. The sale was completed on receipt of regulatory approvals on September 10,
2014. The financial results of the subsidiaries engaged in camping businesses have been consolidated into the
consolidated financial results of the company for the year ended March 31, 2014 and six months ended September 30,
2014 upto September 9, 2014.
b) The operating results of the subsidiaries in camping businesses for the period from April 1, 2013 to March 31, 2014 and
April 1, 2014 to September 9, 2014 were aggregated from the consolidation workings of the financial results of the
Holidaybreak Limited for respective periods. These operating results are converted into Indian Rupees at the exchange
rate of Rs.96.02 and Rs.100.83, being the average rate for the year ended March 31, 2014 and six months period ended
September 30, 2014 respectively. The operating results of camping businesses in Indian Rupees are reduced from the
Audited Consolidated Results for the year ended March 31, 2014 and Management certified Consolidated Results for six
months period ended September 30, 2014. .
c) Dividend income of ₤ 20.7 million (Rs.1,987.67 million) and interest income of ₤ 1.03 ( Rs.99) million received by
Holidaybreak Limited during the year ended March 31, 2014 from the subsidiaries engaged in camping businesses has not
been considered in proforma results.
F-62
d) The transactions between the subsidiaries engaged in camping businesses and rest of the group which were eliminated
have been included in proforma.
e) Holidaybreak Limited accounted gain of Rs.3,498.90 million due to sale of camping businesses and loss due to writeoff
of goodwill relating to camping division of Rs.5,518.59 million in its consolidated results for six month ended
September 30, 2014. These gain/losses have been eliminated in these Proforma Consolidated Financial Results.
174
DECLARATION
Our Company certifies that all the relevant provisions of Chapter VIII read along with Schedule XVIII of the
SEBI Regulations have been complied with and no statement in this Placement Document is contrary to the
provisions of Chapter VIII read along with Schedule XVIII of the SEBI Regulations and that all approvals and
permissions required to carry on our business have been obtained and are currently valid and have been complied
with. Our Company further certifies that all the statements in this Placement Document are true and correct.
Signed by:
Urrishila Kerkar
Director
Date: November 25, 2014 Place: Mumbai
175
DECLARATION
We, the Directors of the Company certify that:
(i) the Company has complied with the provisions of the Companies Act 2013 and the rules
made thereunder;
(ii) the compliance with the Companies Act 2013 and the rules does not imply that payment of dividend
or interest or repayment of debentures, if applicable, is guaranteed by the Central Government; and
(iii) the monies received under the offer shall be used only for the purposes and objects indicated in the
Placement Document (which includes disclosures prescribed under Form PAS-4).
Signed by: (Urrshila Kerkar) (Pesi Patel)
Director Director
I am authorized by the Board of Directors of the Company, by resolution dated 9 October 2014 to sign this
form and declare that all the requirements of Companies Act 2013 and the rules made thereunder in respect of
the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in
this form and in the attachments thereto is true, correct and complete and no information material to the
subject matter of this form has been suppressed or concealed and is as per the original records maintained by
the entities subscribing to the Memorandum of Association and the Articles of Association.
It is further declared and verified that all the required attachments have been completely, correctly and
legibly attached to this form.
Signed:
Director Urrshila Kerkar
Date: November 25, 2014
Place: Mumbai
176
COX & KINGS LIMITED
Registered Office
Turner Morrison Building, 1st Floor
16 Bank Street, Fort
Mumbai 400 001
Maharashtra, India
Tel: +91-22-2270 9100,
Fax: +91-22-2270 4600 / 9161
Corporate Office
Turner Morrison Building, 1st Floor
16 Bank Street, Fort
Mumbai 400 001
Maharashtra, India
Tel: +91-22-2270 9100,
Fax: +91-22-2270 4600 / 9161
CIN: L63040MH1939PLC011352
Contact Person
Rashmi Jain, Company Secretary
Address of Compliance Officer
Turner Morrison Building, 1st Floor
16 Bank Street, Fort
Mumbai 400 001
Maharashtra, India
Website: www.coxandkings.com
Email: [email protected]
GLOBAL COORDINATOR AND BOOK RUNNING LEAD MANAGER
Axis Capital Limited
Axis House, 1st Floor
P. B. Marg
Mumbai 400 025, India
LEGAL ADVISOR TO THE BOOK RUNNING LEAD MANAGER
(as to Indian law)
Trilegal
One Indiabulls Centre
14th Floor, Tower One
Elphinstone Road
Mumbai 400 013, India
INTERNATIONAL LEGAL ADVISOR TO THE BOOK RUNNING LEAD MANAGER
DLA Piper Singapore Pte. Ltd.
80 Raffles Place
#48-01 UOB Plaza 1
Singapore 048624
AUDITORS TO THE COMPANY
Chaturvedi & Shah
714-715, Tulsiani Chambers
212 Nariman Point
Mumbai- 400 021, India
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