PROFITS DIVIDEND AND RETAINED EARNINGS
The financial results of your Company summarised are as under:
|For the year ended ||For the year ended |
|31st March 2018 ||31st March 2017 |
| ||(' in lakhs) ||(' in lakhs) |
|Profits || || |
|a. Profit Before Tax ||1151.14 ||1830.91 |
|b. Tax Expense || || |
|Current Tax ||559.63 ||782.79 |
|Deferred Tax ||(103.89) ||(69.12) |
|c. Profit for the year ||695.40 ||1117.24 |
|d. Other Comprehensive Income ||(9335) ||(71.02) |
|e. Total Comprehensive Income ||602.05 ||1046.22 |
|Statement of Retained Earnings || || |
|a. At the beginning of the year ||12520.05 ||11882.77 |
|b. Add: Profit for the year ||695.40 ||1117.24 |
|Less: || || |
|c. Other Comprehensive Income || || |
|(net of tax) ||93.35 ||71.02 |
|d. Dividend paid including Income Tax || || |
|on Dividend paid ||408.94 ||408.94 |
|e. At the end of the year ||12713.16 ||12520.05 |
Your Directors are pleased to recommend a dividend of ' 4.25 per Equity Share of ' 10/-each for the year ended 31st March 2018 thereby maintaining last year's dividend.
Currently the Indian aviation industry is considered the third largest domestic civilaviation market in the world and is expected to become the world's largest in the next 10to 15 years as per Indian Brand Equity Foundation (IBEF). India's passenger traffic grewat 16.5% year on year (YoY) to reach 308.75 million. Domestic passenger traffic grew YoYby 18.3% to reach 243 million in the financial year 2018 due to higher disposable incomeand cheaper fares.
Whilst the growth is encouraging oil prices which constitute a significant part ofairlines' operating expenses have shot up in the last year. Continued increase in fuelprices will impact airfares and will have a dampening effect on demand.
During the year your Company managed to maintain and marginally grow its businessvolumes despite stiff competition from the traditional and online travel agents. Theaverage ticket prices did not show any growth in the year with competition in the airlinespace keeping prices muted. The Company's strategy of expanding in the small and mediumenterprise business travel space bore fruit and helped sustain business volumes.
Airlines continued their focus on reducing or in some cases doing away withcommissions on ticket sales thereby putting pressure on revenues. In an effort to maintainmarket share airlines also increased productivity targets in relation to performancelinked bonuses making it difficult to achieve and thereby impacting revenues from bonuses.
Your Company is also in the process of realigning its strategy to support futuregrowth. This has resulted in an increase in expenses which we expect will bear fruit inthe coming years in the form of higher business volumes and revenues.
Car Rental Business
The Indian car rental market is broadly segmented into organised and unorganisedsectors with the latter having a dominant share. A large number of travellers and keennessof consumers to try new offerings enabled by massive technology investments is drivingsignificant market growth and expansion and providing an attractive opportunity for newentrants.
Your Company is focusing on its core strengths of quality reliability and safety inthe chauffeur driven segment which still has considerable headroom for growth. In theface of stiff competition and rapid expansion of taxi aggregators your Company was ableto maintain its business volumes on the back of superior quality delivery and high levelsof safety and was successful in garnering a marginally higher revenue per trip. All carsprovided by your Company are equipped with GPS devices and monitored at a Central CommandCenter. An emergency button is available in all cars with a response time of under oneminute.The chauffeurs are trained in defensive driving techniques and receive continuousinputs during the year.
However input prices in this industry continued to rise with fuel prices showing anuptick during the year along with increase in manpower costs. Your Company has takenadequate steps to expand service delivery locations and redesign the operating structureto reduce costs. New business models on procurement of services were also rolled outduring the year to optimise input costs.
MICE - Meetings Incentives Conventions and Exhibitions - is an integral part of theglobal travel industry which stood at $752 billion in 2016 and is projected to grow at acompound annual growth rate (CAGR) of 7.5% in the next five years as per Allied MarketResearch.
However India has a market share of just $1.5 billion and ranks 35th in the worldaccording to a recent report by the International Congress and Convention Association(ICCA).
Your Company strengthened its MICE value proposition coupled with renewed sales andmarketing efforts during the year. The major domestic MICE events organised by yourCompany during the year were Auto Expo ACREX India Indiawood Mumbaiwood IndianCeramics Fire and Security India Expo Biofach India Electronica India etc.
The business of outbound corporate incentives did well and the major international MICEevents handled by your Company during the year were for Ambuja Cements Arvind BrandsIntex Technology Khadims Pernod Ricard etc.
Your Company holds a full-fledged money changers (FFMC) license issued by the ReserveBank of India at 8 of its business travel servicing locations across India.The margins inthis business are under increasing pressure due to intense competition and your Company isexploring options to fulfill this customer need through alternate servicing models.
Outbound & Inbound Business
India has become one of the fastest growing outbound travel markets in the world and itis estimated that 25 million Indians travelled overseas in 2017.
This market is growing very fast driven by increasing middle- class incomes changingconsumer attitudes towards spending low airfares group package tours etc. Indians aretravelling to international destinations more frequently and the average travel spend isalso on the rise.The Indian outbound tourism market is expected to surpass the figure ofUS$ 40 Billion by 2020.
Your Company's focused approach on this business resulted in your Company sending morethan 1500 individual travellers to foreign countries during the financial year 2017-18.
In 2016 foreign tourist arrival in India stood at 8.8 million. In 2017 Indiaattracted 9.45 million international tourist arrivals and by 2027 it is expected to reach17.3 million. This is due to flexible government policies improved rail & roadinfrastructure increase in international and domestic air-connectivity and easieravailability of e-visas to foreign tourists.
Your Company expects to grow in this business in the coming years supported by thelaunch of a new website and special product and service offerings leveraging its carrental and ground handling capabilities.
Your Company is realigning its strategy to keep pace with rapidly changing marketconditions in the travel industry and making investments in technology up-gradationupdating service delivery models and enhancing products and service capabilities.
As a part of the transformation your Company is also refreshing its brand logo brandpositioning and communication approach. The objective behind this is to present a moreprogressive and contemporary brand adapting to emerging millennial demands.
The new logo signifies a more contemporary identity while retaining the legacy. Thethree interconnected swirls forming the mnemonic of the new logo signify all aspects oftravel viz. air sea and ground while the new tagline keep going' written in aflowing handwritten font reflects the forward moving approach of the brand.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
The Company does not have any subsidiary associate or joint venture.
INTERNAL FINANCIAL CONTROLS
Corporate Governance in your Company operates at three interlinked levels with clearlydefined roles responsibilities and authorities across the three levels of the governancestructure. Your Company also has a Code of Conduct which requires management to conform tothe required financial and accounting policies systems and processes conduct businessethically and ensure strict compliance with all applicable laws and regulations. Boththese policies have been widely communicated across the organisation and together with theStrategy of Organisation' Planning & Review Processes and the Risk ManagementFramework create a control environment across the Company and provides the cornerstonefor Internal Financial Controls with reference to your Company's Financial Statements.
Your Company's Financial Statements are prepared on the basis of the SignificantAccounting Policies that are carefully selected by management and approved by the AuditCommittee and the Board. These Policies are supported by the Corporate Accounting Systemand Policies that apply to the entity as a whole and are practiced uniformly across theCompany. The Accounting Policies are reviewed and updated from time to time. These in turnare supported by a set of policies and Standard Operating Procedures (SOPs) that have beenestablished for individual businesses. Your Company uses Information Technology Systems asa business enabler and also to maintain its books of accounts. The SOPs in tandem with theInformation Management Policy reinforces the control environment. The whole gamut ofcontrols policies procedures and systems are reviewed by management and audited by theInternal Audit whose findings and recommendations are reviewed by the Audit Committee andtracked through to implementation.
Your Company has in place adequate internal financial controls with reference toFinancial Reporting. Such controls have been assessed during the year taking intoconsideration the essential
components of internal controls stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by The Institute of CharteredAccountants of India. Based on the results of this assessment carried out by managementno reportable material weakness or significant deficiencies in the design or operation ofinternal financial controls were observed. Nonetheless your Company recognises that anyinternal financial control framework no matter how well designed has inherentlimitations and accordingly regular audit and review processes ensure that such systemsare reinforced on an ongoing basis
Your Company continues its emphasis on a systems-based approach to business riskmanagement. Backed by strong internal control systems the current Risk Managementframework consists of the following key elements:
- The Corporate Governance Policy approved by the Board clearly lays down the roles andresponsibilities of the various entities in relation to risk management covering a rangeof responsibilities from strategic to operational. These role definitions provide thefoundation for your Company's Risk Management Policy that is endorsed by the Board and isaimed at ensuring formulation of appropriate risk management procedures their effectiveimplementation and independent monitoring and reporting by Internal Audit.
- The Risk Assessment and Management Cell through focused interactions withbusinesses facilitates the identification and prioritisation of strategic and operationalrisks development of appropriate mitigation strategies and conducts periodic reviews ofthe progress on the management of identified risks.
- A combination of centrally issued policies and procedures which are regularlyreviewed and updated in the light of changing business and regulatory environment bringsrobustness to the process of ensuring that business risks are effectively addressed.
- Appropriate structures are in place to proactively monitor and manage the inherentrisks in businesses with unique / relatively high risk profiles.
- The Corporate Internal Audit is an independent function and carries out risk focusedaudits across all businesses enabling identification of areas where risk managementprocesses may need to be strengthened. The Audit Committee of the Board reviews InternalAudit findings provides strategic guidance on internal controls and seeks feedback onimplementation based on such guidance. The Audit Review Committee closely monitors theinternal control environment within your Company including implementation of action plansemerging out of internal audit findings.
- A framework of strategic planning and performance management ensures realisation ofbusiness objectives based on effective strategy implementation. The annual planningexercise requires identification of top risks and sets out a mitigation plan with agreedtimelines and accountability. Businesses are required to confirm periodically that allrelevant risks have been identified assessed evaluated and that appropriate mitigationsystems have been implemented.
The combination of policies and processes as outlined above adequately addresses thevarious risks associated with your Company's businesses.
AUDIT AND SYSTEMS
Your Company believes that internal control is a necessary adjunct to the principle ofgovernance that freedom of management should be exercised within a framework ofappropriate checks and balances. Your Company remains committed to ensuring an effectiveinternal control environment that provides assurance and comfort on orderly and efficientconduct of operations security of assets prevention and detection of frauds / errorsaccuracy and completeness of accounting records and timely preparation of reliablefinancial information.
Your Company's independent and robust Internal Audit processes provide assurance on theadequacy and effectiveness of internal controls compliance with operating systemsinternal policies and regulatory requirements.
The Internal Audit function consisting of an in-house team and outsourced professionalfirms resourced to deliver high standards of audit assurances. In the context of the ITenvironment of your Company systems and policies relating to Information Management areperiodically reviewed and benchmarked for contemporariness. Compliance with theInformation Management policies receives focused attention of the Internal Audit team.
The Audit Committee of your Board met four times during the year. The Terms ofReference of the Audit Committee included reviewing the adequacy and effectiveness of theinternal control environment monitoring implementation of the action plans emerging outof Internal Audit findings including those relating to strengthening of your Company'srisk management systems and discharge of statutory mandates.
HUMAN RESOURCE DEVELOPMENT
Your Company firmly believes that employees are the vital and most valuable assets andhence has created a favourable work environment that encourages innovation andmeritocracy. Your Company continues to innovate in the way human resources are managed anddeveloped striking a balance between business needs & individual aspirations.
Your Company's Human Resource policies and procedures continue to evolve to stay aheadwith the dynamic business environment and have enhanced organisational ability to remaincompliant with the changing regulatory requirements.
Your Company is committed to achieve sustainable organisational performance as anoverarching goal.
The Company provides a safe secure inclusive & a gender friendly workplace. Nocase of sexual harassment was reported during the year. The Company has put in place aGrievance Redressal Procedure and an Internal Complaints Committee to ensure thatgrievances in this regard if any are effectively addressed.
The Company's Whistleblower Policy encourages Directors and employees to bring to theCompany's attention instances of unethical behaviour actual or suspected incidents offraud or violation of the ITHL Code of Conduct that could adversely impact the Company'soperations business performance and / or reputation. The Policy provides that the Companyinvestigates such incidents when reported in an impartial manner and takes appropriateaction to ensure that the requisite standards of professional and ethical conduct arealways upheld. It is the Company's Policy to ensure that no employee is victimised orharassed for bringing such incidents to the attention of the Company.
The practice of the Whistleblower Policy is overseen by the Audit Committee and noemployee has been denied access to the Committee. The Whistleblower Policy is available onthe Company's website at https://www.travelhouseindia.com/policies/Whistleblower_Policy.pdf
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company's CSR policy outlines programmes and projects falling within the purviewof Schedule VII of the provisions of Section 135 of Companies Act 2013 (the Act')and the Companies (Corporate Social Responsibility Policy) Rules 2014.
The annual report on Corporate Social Responsibility activities as required underSections 134 and 135 of the Act 2013 read with Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 and Rule 9 of the Companies (Accounts) Rules 2014 isprovided in the Annexure forming part of this Report.
Your Company has not accepted any deposits from the public / members under Section 73of the Act read with the Companies (Acceptance of Deposits) Rules 2014 during the year.
Changes in Directors
During the year under review there were no changes in Directors.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Act read with Articles 143 and144 of the Articles of Association of the Company Mr Nakul Anand will retire by rotationat the ensuing Annual General Meeting (AGM') of your Company and being eligibleoffers himself for re-appointment. Your Board recommends his re-appointment.
Number of Board Meetings
During the year ended 31st March 2018 six meetings of the Board were held.
Attributes Qualifications & Independence of Directors and their Appointment
As reported last year the Nominations & Remuneration Committee of the Board hadapproved the criteria for determining qualifications positive attributes and independenceof Directors in terms of the Act and the Rules thereunder both in respect of IndependentDirectors and other Directors as applicable.The Governance Policy of the Company alsointer alia requires that Non-Executive Directors including Independent Directors bedrawn from amongst eminent professionals with experience in business / finance / lawpublic administration and enterprises.
The Board Diversity Policy of the Company requires the Board to have a balance ofskills experience and diversity of perspectives appropriate to the Company. The Articlesof Association of the Company provide that the strength of the Board shall not be fewerthan three nor more than twelve.
Directors are appointed / re-appointed with the approval of the members. All Directorsother than Independent Directors are liable to retire by rotation unless otherwiseapproved by the Members. One-third of the Directors who are liable to retire by rotationretire every year and are eligible for re-appointment.
The Independent Directors of your Company have confirmed that they meet the criteria ofindependence as prescribed under Section 149 of the Act and Regulation 16 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations 2015).
The Company's Policy relating to remuneration of Directors Key Managerial Personneland other employees is provided under the section Report on Corporate Governance' inthe Report and Accounts.
The Nominations & Remuneration Committee has approved the Policy on BoardEvaluation Evaluation of Board Committees' functioning and individual DirectorEvaluation.Board performance is assessed against the role and responsibilities of theBoard as provided in the Act and the Listing Regulations 2015 read with the Company'sGovernance Policy. The parameters for Board performance evaluation have been derived fromthe Board's core role of trusteeship to protect and enhance shareholder value as well asfulfil expectations of other stakeholders through strategic supervision of the Company.Evaluation of functioning of Board Committees is based on discussions amongst Committeemembers and shared by each Committee Chairman with the Board. Individual Directors areevaluated in the context of the role played by each Director as a member of the Board atits meetings and in assisting the Board in realising its role of strategic supervision ofthe functioning of the Company in pursuit of its purpose and goals.
While the Board evaluated its performance against the parameters laid down by theNominations & Remuneration Committee the evaluation of individual Directors wascarried out anonymously in order to ensure objectivity. The Board was briefed onfunctioning of Board Committees by the respective Committee Chairmen.
Key Managerial Personnel
During the year under review Mr Ghanshyam Arora stepped down as the Manager of theCompany with effect from close of work on 4th April 2017. Thereafter your Board on therecommendation of the Nominations & Remuneration Committee appointed Mr Ajay Kumar asthe Chief Executive Officer of the Company effective 5th April 2017.
AUDIT COMMITTEE & AUDITORS
The composition of the Audit Committee is provided under the section Board ofDirectors and Committees' in the Report and Accounts.
The Auditors Messrs. Deloitte Haskins & Sells LLP Chartered Accountants wereappointed with your approval at the Thirty Sixth AGM to hold such office till theconclusion of the Forty First AGM.
Your Board appointed Messrs. PB & Associates Company Secretaries to conduct thesecretarial audit of the Company for the financial year ended 31st March 2018. Theirreport is provided in the Annexure forming part of this Report in terms of Section 204 ofthe Act.
RELATED PARTY TRANSACTIONS
All contracts or arrangements entered into by the Company with its related partiesduring the financial year were in accordance with the provisions of the Act and theListing Regulations 2015. All such contracts or arrangements have been approved by theAudit Committee. No material contracts or arrangements with related parties were enteredinto during the year under review. Accordingly no transactions are being reported in FormNo. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts)Rules 2014.
Your Company's Policy on Related Party Transactions as adopted by your Board can beaccessed on the Company's website at https://www.travelhouseindia.com/ policies / RelatedParty.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134 of the Act your Directors confirm having:
a) followed in the preparation of the Annual Accounts the applicable AccountingStandards with proper explanation relating to material departures if any;
b) selected such accounting policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your Company at the end of the financial year and of the profit ofyour Company for that period;
c) taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the provision of the Act for safeguarding the assetsof your Company and for preventing and detecting fraud and other irregularities;
d) prepared the Annual Accounts on a going concern basis;
e) laid down internal financial controls to be followed by your Company and that suchinternal financial controls were adequate and operating effectively; and
f) devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
Compliance with the conditions of Corporate Governance
The certificate of the Auditors Messrs. Deloitte Haskins & Sells LLP CharteredAccountants confirming compliance with the conditions of Corporate Governance asstipulated under the Listing Regulations 2015 is annexed.
Compliance with Secretarial Standards
The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Act.
Going Concern Status
There is no significant or material order passed during the year by any regulatorcourt or tribunal impacting the going concern status of the Company or its futureoperations.
Extract of Annual Return
The information required under Section 134 of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 is annexed.
Particulars of Loans Guarantees or Investments
During the year ended 31st March 2018 the Company has neither given any loan orguarantee nor has made any investment under the provisions of Section 186 of the Act.
Particulars relating to Conservation of Energy and Technology Absorption
Particulars as required under Section 134 of the Act relating to Conservation of Energyand Technology Absorption are provided below:
Conservation of Energy:
Steps taken on conservation of energy and impact thereof: NIL
Steps taken by the Company for utilising alternate sources of energy: NIL
Capital investment on energy conservation equipment: NIL. Technology Absorption:
I) Efforts in brief made towards technology absorption and benefits derived as aresult of the above efforts e.g. product improvement cost reduction productdevelopment import substitution etc.:
New features and contents have been added to ITH SMART the Company's reservations andbooking platform to keep it contemporary.
Your Company has also proceeded to migrate and enhance its internal applications ofPayroll and Foreign Exchange to scalable efficient and available cloud based setups.
Improved customer service delivery integrity availability usage and optimisation offulfillment process.
II) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished:
A) Details of technology imported - NIL
B) Year of import - NIL
C) Whether the technology has been fully absorbed - NIL
D) If not fully absorbed areas where absorption has not taken place and the reasonstherefor - NIL
III) Expenditure incurred on research and development - NIL
The total number of employees of the Company as on 31st March 2018 stood at 639.
The details of employee(s) drawing remuneration more than the limit specified in Rule5(2) of the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014along with the details of top ten employees of the Company in terms of remuneration drawnas required under the said Rule are given in the Annexure forming part of this Report.
This Report contains forward-looking statements that involve risks and uncertainties.When used in this Report the words anticipate' believe' estimate'expect' intend' will' and other similar expressions as they relate tothe Company and / or its Businesses are intended to identify such forward-lookingstatements. The Company undertakes no obligation to publicly update or revise anyforwardlooking statements whether as a result of new information future events orotherwise. Actual results performances or achievements could differ materially from thoseexpressed or implied in such forward-looking statements. Readers are cautioned not toplace undue reliance on these forward-looking statements that speak only as of theirdates. This Report should be read in conjunction with the financial statements includedherein and the notes thereto.
Your Directors and employees look forward to the future with confidence and standcommitted to creating an even brighter future for all stakeholders.
|On behalf of the Board |
|A Rajput ||J Singh |
|Director ||Director |
Place : New Delhi
Date : 17th April 2018