Note 28: Amendment to Shareholders Agreement of Taj SATS Air Catering Limited

The Company has executed an amendment to the Subscription cum Shareholders Agreement ('SSHA') with SATS Limited ('SATS') and Taj SATS Air Catering Limited ('Taj SATS') on July 23, 2024. The SSHA, originally executed on September 25, 2001, comprised of terms governing rights of the shareholders in regard to various operational aspects of Taj SATS.

The amendment to the SSHA is effected in order to modify certain rights of both the shareholders in aspects of running the day-to-day affairs of Taj SATS without any changes in the shareholdings of IHCL and SATS in the equity share capital of Taj SATS. Under Indian Accounting Standards (Ind AS) notified under the Companies Act, 2013 ('the Act'), based on evaluation of "control", Taj SATS is being accounted for as a subsidiary company of IHCL instead of as a joint venture effective from the date of the execution of the amendment to the SSHA. Subsequently, the Investment in Taj SATS has been reclassified from "Investments in Joint Ventures (at cost)" to "Investments in Subsidiary Companies (at cost)".

Note 29: Acquisition of controlling stake in Rajscape Hotels Private Limited

On November 5, 2024, the Company had executed Subscription cum Shareholders Agreement ('SSHA') with Ambuja Neotia Hotel Ventures Limited ("ANHVL") and Rajscape Hotels Private Limited ("RHPL") to acquire 55% stake in RHPL. RHPL operates and manages 16 boutique properties under the brand name "Tree of Life" in different locations of India.

On January 13, 2025, the Company completed the acquisition of 7,989 equity shares, representing 55% stake, for an aggregate consideration of 117.66 crores at 122,100 per share as detailed below:

- Purchase of 3,464 RHPL shares of face value 110 each from ANHVL for an aggregate consideration of 17.66 crores

- Subscription of 4,525 shares in RHPL of face value 110 each at 122,100 per share aggregating to 110.00 crores

Note 30: Investments in subsidiaries

(a) During the year, the Company has infused additional equity in certain subsidiaries as per the details below:

(i) Invested 140.00 crores in Genness Hospitality Private Limited ("GHPL"), a wholly-owned subsidiary, through a subscription to its Equity Issue, and was allotted 40,00,00,000 shares. Resultantly, the Company's total investment in GHPL increased from 164.90 crores to 1104.90 crores. The issue proceeds will be utilised for the development of a greenfield hotel (Vivanta) in Ekta Nagar, near the site of Statue of Unity, Gujarat. Currently, this project is under development.

(ii) Invested 140.00 crores in Qurio Hospitality Private Limited ("QHPL"), a wholly-owned subsidiary, through a subscription to its Equity Issue, and was allotted 40,00,00,000 shares. Resultantly, the Company's total investment in QHPL increased from 144.90 crores to 184.90 crores. The issue proceeds will be utilised for the development of a greenfield hotel (Ginger) in Ekta Nagar, near the site of Statue of Unity, Gujarat. Currently, this project is under development.

(iii) Invested 172.00 crores in Zarrenstar Hospitality Private Limited ("ZHPL"), through a subscription to its Equity Issue, and was allotted 71,99,99,998 shares. Resultantly, the Company's total investment in ZHPL increased from 135 crores to 1107 crores. The issue proceeds are utilised for the development of the hotel at Cochin International Airport.

(iv) Invested 177.19 crores in IHOCO B.V., a direct Wholly Owned Subsidiary (WOS) in the Netherlands, through a subscription to its Equity Issue, and was allotted 8,89,328 shares. Resultantly, the Company's total investment in IHOCO BV increased from 13,323 crores to 13,400.19 crores.

Note 31: Contingent Liabilities (to the extent not provided for) and Contingent Assets:

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Company's businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

Footnotes:

(i) The above figures exclude interest demands of 155.48 crores (Previous year 173.79 crores).

(ii) In respect of Income Tax matters, the Company has ongoing disputes with Income Tax Authorities relating to treatment of certain items/ adjustments carried out by the Department for which the Company has got favourable outcome at DRP/CIT(A) in some of the years. These issues are being contested and are pending before various Appellate Authorities. The Company expects to receive favourable order and sustain its position at higher appellate level, thus same has been excluded from tax litigations of 1483.61 crores (Previous year 1494.37 crores) in the above disclosure.

(iii) In respect of regulatory matters please refer Note 39.

(b) On account of lease agreements:

In respect of a plot of land, on which the Company has constructed a hotel, the lessor had made a claim during financial year ("FY") 2006-07 for the period September 1, 2006 to March 31, 2007, which exceeded the amount payable as per the lessor's own proposal by 113.97 crores. The said proposal of the lessor had been accepted by the Company in FY 2001-02, without prejudice to its rights under the lease deed that it had originally entered with the lessor. The claim of the lessor is also inconsistent with the decision of the Honorable Supreme Court of India ("SC") in 2004 which decided on the quantification of lease rent up to FY 2011-12. From FY 2006-07, the lessor has been raising excessive claims, which as of March 31, 2025, aggregate to 11,874 crores for periods commencing from September 1, 2006.

Based on legal advice, the Company has disputed the claims in a suit in the Honorable High Court of Judicature at Bombay ("Bombay HC"). The Bombay HC stayed the lessor's notices in FY 2018-19. Pending final disposal of the suit, the lessor has been restrained from disturbing or prejudicing the Company's possession of the plot/operation thereon, subject to the Company paying lease rentals as per the lessor's proposal that was accepted by the Company. The Company continues to pay lease rentals on this basis and accounts for these payments in accordance with its Accounting Policy 2(h) which explains the accounting of the Company's leases. The amount and timing of outflow of economic resources would depend on the outcome of the litigation.

(c) Others:

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented

The Company's management does not believe, based on currently available information, that the outcomes of the above matters will have a material adverse effect on the Company's financial position, though the outcomes could be material to the Company's operating results for any particular period, depending, in part, upon the operating results for such period. It is not practicable for the Company to estimate the timings of cash flows, if any, in respect of the above.

(d) Claims filed by the Company:

The Company has filed claims for Government incentives in case of a Greenfield project and an expansion hotel project. The claims are in initial stage of verification and in the absence of reasonable certainty at this stage, no income has been recognised in the financial statements.

Note 32: Guarantees given

(a) Guarantees/ Letters of Comfort given by the Company in respect of loans obtained by the Company's subsidiaries and outstanding as on March 31, 2025 - H90.73 crores (Previous year - H92.10 crores). Further guarantees given by the Company in connection to leases entered by the Company's subsidiary and outstanding as on March 31, 2025 - H93.08 crores (Previous year - Nil).

(b) The Company has given letter of financial support to two subsidiaries during the year.

Note 33: Capital Commitments

Commitments includes the amount of purchase order (net of advance) issued to parties for completion of assets. Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is H163.28 crores (Previous year - H117.58 crores).

Note 34: Revenue from contracts with customers

The Company's revenue primarily comprises of Revenue from Hotel operations, Management and Operating Fee and Membership fees income as tabulated below.

Note 35: Leases

The Company leases several assets including land, building and plant and equipment which are generally long-term in nature with varying terms, escalation clauses and renewal rights expiring within five to one hundred and ninety-eight years. On renewal, the terms of the leases are renegotiated.

Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either

observable or unobservable and consists of the following three levels:

(a) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price/ declared NAV. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

(c) Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in Level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

c) Inter level transfers:

There are no transfers between Levels 1 and 2 as also between Levels 2 and 3 during the year.

d) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for the equity instruments

- the fair value of certain unlisted shares is determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

- the fair value of the remaining financial instruments is determined using the discounted cash flow analysis

Note 37: Financial risk management

Risk management framework

The Company's Board of Directors has the overall responsibility for the establishment and oversight of the Company's risk management framework. The Board of Directors has established a Risk Management Committee, which is responsible for developing and monitoring the Company's risk management policies. The Committee reports regularly to the Board of Directors on its activities.

The Company's risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company's Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by the internal audit team. The internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

a) Credit risk

Credit risk arises from the possibility that customers or counterparty to financial instruments may not be able to meet their obligations. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits with banks, financial institutions and others, as well as credit exposures to customers, including outstanding receivables.

The Company's policy is to place cash and cash equivalents and short-term deposits with reputable banks and financial institutions.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before entering into contract. Credit limits are established for each customer, reviewed regularly and any sales exceeding those limits require approval from the appropriate authority. There are no significant concentrations of credit risk within the Company. The carrying amount of Trade Receivables was H450.66 crores and H402.74 crores as at March 31, 2025 and 2024 respectively.

Sensitivity

For the year ended March 31, 2025 and March 31, 2024, every 3% depreciation/ appreciation in the exchange rate between the Indian rupee and US dollar, shall affect the Company's profit before tax by approximately -0.01% and 0.01% respectively.

ii) Interest rate risk

The Company adopts a policy to hedge the interest rate movement in order to mitigate the risk with regards to floating rate linked loans based on the market outlook on interest rates. This is achieved partly by entering into fixed rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.

There are no borrowings as at March 31, 2025 and March 31, 2024.

iii) Other market price risks

The Company's exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2025 would increase/ decrease by 25.98% (for the year ended March 31, 2024: increase/ decrease by 5.85%).

(b) The Company operates post retirement defined benefit plans as follows:

a. Funded:

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded:

i. Pension to Executive Directors and Employees - Post retirement minimum guaranteed pension scheme for select existing and retired executive directors and certain categories of employees, which is unfunded.

ii. Post-Employment Medical Benefits to qualifying employees.

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices and the Company had replied to the notices. The Company has received adjudication cum demand of H12.06 crores (Previous year: H10.89 crores) on certain matters which has been disputed by the Company. This has been disclosed as Contingent Liability. The Company has filed appeals against these adjudication cum demand orders and the same are pending. For the balance Show Cause Notices, adjudication proceedings are pending. During the year, the Appellate Tribunal directed the Company to deposit 10% of the total adjudicated demand amount i.e., H1.20 crores during the pendency of the Appeals, which stand complied with. The Company has subsequently filed a writ petition before the Bombay High Court challenging the issuance of certain show cause notices and the same is pending.

Due to the restrictions in the type of investments that can be held by the gratuity and pension fund as per the prevalent regulations, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors. The above information has been certified by the actuary and has been relied upon by the Auditors.

The Company reviews its income tax treatments in order to determine its impact on the financial statements. As a practice, where the interpretation of income tax law is not clear, management relies on some or all of the following factors to determine the probability of its acceptance by the tax authority:

- Strength of technical and judicial argument and clarity of the legislation;

- Past experience related to similar tax treatments in its own case;

- Legal and professional advice or case law related to other entities.

After analysing above factors for each of such uncertain tax treatments, where the Company expects that the probability to sustain its position on ultimate resolution of such uncertain tax treatment is remote, the Company ensures that such uncertain tax positions are adequately provided for in the Company's financial Statements.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Company's activities and consistent with the internal reporting provided to the chief operating decision-maker and after considering the nature of its services, the ultimate customer availing those services and the methods used by it to provide those services, "Hotel Services" has been identified to be the Company's sole operating segment. Hotel Services include "Revenue from Operations" including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Company's management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2 in the summary of material accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:

Explanations to variance in Ratios:

1. Current ratio increased due to increase in current assets primarily attributable to internal accruals deployed in bank deposits.

2. The debt-equity ratio is currently nil as there are no outstanding debts.

3. Net profit ratio improved due to an increase in net profit after tax from improvement in business volumes.

4. Return on capital employed and return on equity improved with improvement in operating margins during the year.

5. Return on investments increased with increase in yields of the investment portfolio.

6. The Company has not presented Inventory turnover ratio since it holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to total assets.

b) Transaction with Struck off Companies:

The Company has reviewed transactions to identify if there are any transactions with struck off companies. To the extent information is available on struck off companies, there are 83 transactions with struck off companies.

c) Title deeds of leased assets not held in the name of the Company:

The title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date except in respect of one commercial / residential building aggregating to H0.66 crores (Gross block H1.30 crores) constructed on the leased land, which is in the possession of the Company, acquired pursuant to a scheme of amalgamation of TIFCO Holdings Limited (a wholly owned subsidiary). The lease of the said land has expired in the year 2000. Erstwhile TIFCO Holdings Limited has filed a writ Petition in High Court of Mumbai on January 15, 2013 for renewal of lease.

d) There are no borrowings from banks or financial institutions on the basis of security of current assets of the Company.

e) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds other than as disclosed in Note 30(b), to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) The Company has not received any funds from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

Note 47: Audit Trail

The Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and audit trail feature with respect to application and database layer changes in accounting software, has operated effectively throughout the year, except:

i) Access management tool was implemented during the year for revenue softwares on premise with effect from September 6, 2024 and audit trail (edit log) on database was hence enabled effective that date.

ii) In respect of a revenue software migrated to cloud infrastructure during the year and as confirmed directly by the software product owner, access to database is not available to any of their customers and database audit trails are active by default and cannot be disabled.

The audit trail has been preserved by the Company as per the statutory requirements for record retention.

Note 48: Dividends

Dividends paid during the year ended March 31, 2025 out of Retained Earnings was H1.75 per equity share for the year ended March 31, 2024, aggregating to H249.10 crores.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2025, retained earnings not transferred to reserves available for distribution was H3,057.66 crores.

On May 5, 2025, the Board of Directors of the Company have proposed a final dividend of H2.25 per equity share in respect of the year ended March 31, 2025, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of H320.27 crores.