Mar 31, 2023
1. General Information
Thomas Cook (India) Limited (the "Company") is a Public Limited Company listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company is engaged in diversified businesses of travel and travel related businesses, working as travel agent and tour operator having registered office at 11th Floor, Marathon Futurex, N.M Joshi Marg, Lower Parel (East), Mumbai-400 013. The Company is also engaged as an authorised foreign exchange dealer.
The standalone financial statements of the Company for the year ended 31 March 2023, which includes the standalone financial statements of Thomas Cook (India) Limited Employee Trust for the year ended on that date, were approved by the board of directors and authorised for issue on 18 May 2023.
2 (A) Significant Accounting Policies
2.1 Basis of preparation
(a) Statement of compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with rule 4 of the Companies (Indian Accounting standards) Rules, 2015 and other relevant provisions of the Act as amended from time to time that are notified and effective as at 31 March 2023.
(b) Historical cost convention
Standalone financial statements have been prepared on a historical cost basis, except for the following:
⢠certain financial assets and liabilities - measured at fair value,
⢠defined benefit plans - defined benefit obligations less plan assets measured at fair value, and
⢠share based payment - measured at fair value
The standalone financial statements are presented in Indian Rupees "(INR)" or "(Rs.)" which is also the Company''s functional currency and all values are rounded off to nearest lakhs (''00,000) except where otherwise indicated. Wherever the amount is represented as ''0'' (''zero'') it construes a value less than fifty thousand.
2.2 Foreign currency translation and transactions
(a) Functional and presentation currency
A Company''s functional currency is the currency of the primary economic environment in which an entity operates and is normally the currency in which the entity primarily generates and expends cash.
(b) Transactions and balances
(i) Initial recognition
On initial recognition, foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction.
(ii) Subsequent recognition
As at the reporting date, non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the period end exchange rates are recognised in profit or loss. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss in the statement of profit and loss.
All monetary items denominated in foreign currency are restated at Foreign Exchange Dealers Association of India (FEDAI) rates and the exchange variations arising out of settlement / conversion at the FEDAI rates are recognised in the statement of profit and loss.
Profit or loss on purchase and sale of foreign exchange by the Company in its capacity as Authorised Foreign Exchange Dealer are accounted as a part of the revenue.
2.3 Revenue recognition
Revenue is measured based on transaction price, which is the consideration paid for services. Revenue is recognised upon transfer of control of promised services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those services. Revenue from rendering of services is net of Indirect taxes and discounts.
(a) Income from operations
The Company earns revenue from travel and related services and financial services
(i) Financial services
It comprise of income arising from the buying and selling of foreign currencies on the net margins earned, commissions on sale of foreign currency denominated prepaid cards, incentives earned in relation to these cards and agency commissions from Moneygram, Xpressmoney and Western Union on currency remittances. Revenue from financial services are recognized by reference to the time of services rendered.
(ii) Travel and related services
It comprises of leisure tours packages within India and outside India along with travel related services viz travel insurance and visa services. Revenue on leisure tours / holiday''s packages are recognized on the completion of the performance obligation which is on the date of departure of the tour.
It also includes income from the sale of airline tickets which is recognized as an agent on the basis of net commission earned, at the time of issuance of tickets, as the Company does not assume any performance obligation post the confirmation of the issuance of an airline ticket to the customer. Performance linked bonuses from airlines are recognized as and when the performance obligations under the schemes are achieved.
(b) Contract balances
(i) Contract assets
A contract asset is the right to consideration in exchange for services rendered to the customer. If the Company performs by rendering services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
(ii) Contract liabilities
A contract liability is the obligation to transfer services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company renders services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Company performs under the contract.
2.4 Taxes on income
The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Income tax for the period comprises of current tax and deferred tax. Income tax is recognised in the statement of profit and loss except to the extent that it relates to items recognised in ''Other comprehensive income or directly in equity, in which case the tax is recognised in ''Other comprehensive income'' or directly in equity, respectively.
(a) Current tax:
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the Balance Sheet date, and any adjustments to tax payable in respect of previous years. Interest income/expenses and penalties, if any related to
income tax are included in current tax expense.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The company offsets the current tax assets as against the liability for provision for tax.
(b) Deferred tax:
Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred taxes on items classified under Other comprehensive income (''OCI'') has been recognised in OCI.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
2.5 Leases
The company as a lessee
The company''s lease asset classes primarily consist of leases for buildings, vehicles and office equipments. The company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(1) the contract involves the use of an identified asset
(2) the company has substantially all of the economic benefits from use of the asset through the period of the lease and
(3) the company has the right to direct the use of the asset.
At the date of commencement of the lease, the company recognizes a "Right of Use" ("ROU") asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses if any and adjusted for any remeasurement of the lease liability.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the company changes its assessment if whether it will exercise an extension or a termination option.
The company as a lessor
Leases for which the company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
2.6 Impairment of assets
(a) Financial assets
A financial asset not carried at fair value is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset
is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not otherwise consider, indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security. The entity considers evidence of impairment for receivables for each specific asset. All individually significant receivables are assessed for specific impairment.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset''s original effective interest rate. Losses are recognized in statement of profit and loss and are reflected as an allowance account against receivables. Interest on the impaired asset continues to be recognized as income through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through statement of profit and loss.
The company assess at each date of Balance sheet whether a financial assets or group of financial assets is impaired. In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure:
The Company follows ''simplified approach'' for recognition of impairment loss allowance on Trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. The Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
(b) Non financial assets
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Total impairment loss of a cash generating unit (CGU) is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognized in the statement of profit and loss and is not reversed in the subsequent period.
2.7 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, cheques/drafts on hand, remittances in transit, balances with bank held in current account, demand deposits with original maturities of three months or less, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are repayable on demand and form an integral part of an entity''s cash management, and are included as a component of cash and cash equivalents. Bank overdrafts are shown within borrowings in current financial liabilities in the balance sheet.
2.8 Financial instruments
(i) Initial recognition and measurement
Financial assets are recognised when the entity becomes a party to the contractual provisions of the instruments. Transaction costs are expensed in the statement of profit and loss, except for financial instruments carried at amortized cost, where transaction costs are adjusted in the amortized cost of the asset.
(ii) Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other comprehensive income (''FVOCI'') or fair value through profit or loss (''FVTPL'') on the basis of:
(i) the entity''s business model for managing the financial assets and
(ii) the contractual cash flow characteristics of the financial asset.
(a) Measured at amortized cost: Financial assets which have contractual cash flows that are solely payments of principal and interest on the principal outstanding and is held within a business model with the objective of holding the assets to collect contractual cash flows, are subsequently measured at amortized cost using the effective interest rate (''EIR'') method, less impairment, if any. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in interest income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. On derecognition, gain or loss, if any, is recognised in the statement of profit and loss.
(b) Measured at fair value through other comprehensive income : Financial assets which have contractual cash flows that are solely payments of principal and interest on the principal outstanding and is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, is measured at fair value through other comprehensive income. It is subsequently measured at fair value with unrealised gains or losses recognised in the other comprehensive income (''OCI''), except for interest income which is recognised as ''other income'' in the Statement of Profit and Loss using the EIR method. The losses arising from impairment are recognised in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to ''other income'' in the statement of profit and loss.
(c) Measured at fair value through profit or loss: A financial asset not measured at either amortised cost or FVOCI, is measured at FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as ''other income'' in the statement of profit and loss.
All investments in equity instruments classified under financial assets are subsequently measured at fair value (except for investment in subsidiaries). Equity instruments which are held for trading are measured at FVTPL. For all other equity instruments, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument shall be recognised as ''other income'' in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognised in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised as ''other income'' in the Statement of Profit and Loss when the company''s right to receive payments is establishes.
(iii) Investments in subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The accounting policy on impairment of non-financial assets is disclosed in Note 2.6. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the statement of profit and loss.
(iv) Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset. On transfer of the financial asset, the Company evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a fair value basis that reflects the rights and obligations that the Company has retained.
(b) Financial liabilities
(i) Initial recognition and measurement:
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially recognised at fair value plus transaction costs for all financial liabilities not carried at FVTPL. Financial liabilities carried at FVTPL are initially recognised at fair value, and transaction costs are expensed in the statement of profit and loss.
(ii) Subsequent measurement:
Financial liabilities are subsequently measured at amortized cost using EIR method. Financial liabilities carried at FVTPL are measured at fair value with all changes in fair value recognised in the statement of profit and loss.
(iii) Derecognition:
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
(c) Guarantee
Financial guarantee contracts are recognized as a financial liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the higher of amount determined in accordance with Ind AS 37 and the amount initially recognized less cumulative amortization, where appropriate.
The fair value of financial guarantees is determined as the present value of the differences of the difference in net cash flows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
(d) Derivative financial instruments
The Company uses derivative financial instruments, such as forward foreign exchange contracts, to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value, with changes in fair value recognised in statement of profit and loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
2.9 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
2.10 Property, plant and equipment
Property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit and loss during the period in which they are incurred. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. Losses arising from the retirement of, and gains or losses arising from disposal of assets which are carried at cost is recognised in the statement of profit and loss.
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is provided on a straight-line method over the estimated useful lives of the assets. The depreciation rates are prescribed in Schedule II to the Companies Act, 2013. If the management''s estimate of the useful life
of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter or longer than that envisaged in the aforesaid Schedule, depreciation is provided at a higher or lower rate respectively, based on the management''s estimate of the useful life/remaining life.
Depreciation methods, estimated useful lives and residual value:
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, as follows:
Assets |
Useful Life |
Computers |
3 years |
Computer servers and networks |
6 years |
Furniture and fixtures |
10 years |
Office equipments |
5 years |
Building |
60 years |
Vehicles |
8 years |
Plant and machinery |
15 years |
Leasehold improvements are amortised over the period of the lease or useful life of the asset, whichever is lower.
Property, plant and equipment not ready for the intended use on the date of Balance Sheet are disclosed as "Capital work-in-progress".
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate. The residual values are not more than 5% of the original cost of the asset. The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of profit and loss.
2.11 Intangible assets
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over their estimated useful lives. The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the statement of profit and loss.
The carrying value of these intangible assets is reviewed at least annually for impairment and adjusted to the
recoverable amount if required.
(i) Goodwill
Goodwill on business combination is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cashgenerating units for the purpose of impairment testing. The allocation is made to those cash-generating units or company''s of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or company''s of units are identified at the lowest level at which goodwill is monitored for internal management purposes, which in our case are the operating segments.
(ii) Computer software
Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs those are directly attributable to the design and testing of identifiable and unique software products controlled by the Company are recognised as intangible assets when the following criteria are met:
⢠it is technically feasible to complete the software so that it will be available for use
⢠management intends to complete the software and use or sell it
⢠there is an ability to use or sell the software
⢠it can be demonstrated how the software will generate probable future economic benefits
⢠adequate technical, financial and other resources to complete the development and to use or sell the software are available, and
⢠the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of relevant overheads.
Computer software
Amortisation methods and periods
Asset Useful Life
Software (including software 4 years - internally generated / developed)
Amortization is calculated using the straight-line method to allocate their cost over their estimated useful lives.
(iii) Brand
Amortisation methods and periods Asset Useful Life
Brand 25 years
Amortization is calculated using the straight-line method to allocate their cost over their estimated useful lives.
2.12 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in statement of profit and loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortized over the period of the facility to which it relates. Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in statement of profit and loss as finance costs.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in statement of profit and loss.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
2.13 Provisions and contingent liabilities
Provisions are recognised when the entity has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. Provisions are not recognised for future operating losses. A provision is recognized if the likelihood of an outflow with respect to any one item included in the same class of obligations is more probable than not. Provisions are measured at the present value of management''s best estimate of the expenditure require to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.
Where there are several similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Entity or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Contingent assets are neither recognised nor disclosed in the financial statements.
2.14 Other income
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognized when the right to receive dividend is established. Facility support income, group resource income and management fees is recognised on accrual basis over the period of agreement.
2.15 Employees share-based payments
Share-based compensation benefits are provided to employees via the following plans:
a) Thomas Cook Employees Stock Option Plan -2007
b) Thomas Cook Save As You Earn Scheme 2010 (SAYE Scheme)
c) Thomas Cook Employees Stock Option Plan -2013
d) Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - ("SHRIL ESOS 2012")
e) Thomas Cook Employees Stock Option Scheme 2018 - Management (ESOP 2018 - Management)
f) Thomas Cook Employees Stock Option Scheme 2018 - Execom (ESOP 2018 - Execom)
The fair value of options granted under each plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:
⢠including any market performance conditions (e.g., the entity''s share price)
⢠excluding the impact of any service and nonmarket performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified time period), and
⢠including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holdings shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in statement of profit and loss, with a corresponding adjustment to equity.
In respect of options granted to the employees of the subsidiary companies, the amount equal to the expense for the grant date fair value of the award is recognized as a debit to investment in subsidiary as a capital contribution and a credit to equity.
Replacement awards are treated as a modification of share based payment arrangement, and the fair value of the new equity instruments (measured at the date of the modification) are included in the measurement of the amount recognised for services received and recognized over the remaining vesting period of the options.
2.16 Employee benefits
(a) Post employment benefits:
(i) Defined contribution plans
The Company has defined contribution plan for postemployment benefit in the form of Superannuation scheme. Contributions to Superannuation scheme are charged to the statement of profit and loss as incurred. The contributions to Superannuation scheme are based on the premium contribution called for by Life Insurance Corporation of India (LIC) with whom the Company has entered into an arrangement.
Contribution towards provident fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.
(ii) Defined benefit plans
The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation
or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment.
Contribution to Gratuity is based on the premium contribution called for by the Life Insurance Corporation of India (LIC) with whom the Company has entered into an arrangement. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The amount of net interest expense calculated by applying the liability discount rate to the net defined benefit liability or asset is charged or credited in the statement of profit and loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised immediately in ''Other comprehensive income'' and subsequently not reclassified to the statement of profit and loss.
In respect of certain employees, the Company has Defined Benefit Plan for Other Long-term Employee Benefit in the form of Provident Fund. Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.
(b) Short-term employee benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for amount expected to be paid e.g; salaries, short term bonus, if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by employee, and the amount can be estimated reliably.
(c) Compensated absences
As per the leave Policy of the Company, employees are entitled to avail 30 days of leave during a calendar year. Any carry forward or encashment of the same is not allowed and all unutilised leaves necessarily lapse at the end of the calendar year. At reporting date liability pertaining to compensated absences is calculate based on the total leave balances of each employee.
2.17 Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.18 Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.19 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year (net of treasury shares) and for all years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
2.20 Business Combination
Business combinations of entities under common control are accounted using the "pooling of interests" method and assets and liabilities are reflected at the predecessor carrying values and the only adjustments that are made are to harmonise accounting policies. The figures for the previous periods are restated as if the business combination had occurred at the beginning of the preceding period irrespective of the actual date of the combination.
2.21 Cost recognition
Costs and expenses are recognised when incurred and have been classified according to their primary nature. The costs of the company are broadly categorised in employee benefit expenses, depreciation and amortisation and other operating expenses. Employee benefit expenses include employee compensation, allowances paid, contribution to various funds and staff welfare expenses. Other operating expenses majorly include sub-contractor charges, rent, recruitment and training expenses, travelling and conveyance, legal and professional fees and communication expenses.
2.22 Treasury shares
The Company has created an Employee Benefit Trust ("ESOP Trust") for providing share based payment to its employees. The Company uses ESOP trust as a vehicle for distributing shares to its employees under the Employee Stock Option Schemes. The ESOP Trust has bought shares from the Company for giving shares to employees. The Company treats ESOP trust as its extension and shares
held by ESOP trust are treated as treasury shares.
Treasury shares are recognized at cost and deducted from equity. No gain or loss is recognised in the statement of profit and loss on the purchases, sale, issue, cancellation of the Company''s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in capital reserve. Share options exercised during the reporting period are deducted from treasury shares.
2 (B) Critical Accounting Estimates and Judgements:
The preparation of Financial Statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.
The areas involving critical estimates and judgements are:
Useful life of property, plant & equipment - Note 3
Estimated useful life of intangible asset- Note 4(a)
Estimated goodwill impairment - Note 4 (a) (ii)
Leases - Note 4(c)
Impairment of investment - Note 5
Estimation of Defined Benefit Obligation - Note 14(b)
Recognition of deferred tax assets for carried forward unabsorbed depreciation/ loss, MAT credit entitlement -Note 15
Recognition and measurement of provision and contingencies - Note 25
Fair value of financial instruments - Note 27
Impairment of trade receivables - Note 28
Estimation of inputs for fair value of Share based payment instrument - Note 31
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
2 (C) Current / Non Current Classification
All assets and liabilities are classified into current and non-current:
Assets
An asset is classified as current when it satisfies any of the following criteria:
a) it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within 12 months after the reporting date; or
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All other assets are classified as noncurrent.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
a) it is expected to be settled in the Company''s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within 12 months after the reporting date; or
d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
Operating cycle:
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Based on the above definition and the nature of services provided, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.
2 (D) Recent accounting pronouncement
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
Ind AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.
Ind AS 12 - Income Taxes
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements
Mar 31, 2019
1. Financial risk management
The Company''s activities expose it to credit risk, market risk and liquidity risk.
The company has an overall enterprise risk management policy, approved by the Audit Committee of the board of directors. Risks are managed by the individual business units, or the support services'' unit, entering into the base transactions, which give rise to the risks. The Executive Committee (comprising the Chairman & Managing Director, the Chief Financial Officer, and the heads of the business units and support services'' units) has the overall responsibility for the risk management framework and its effectiveness, with the respective heads of business units/support services'' units, being responsible for its implementation and day-to-day monitoring. The Company''s policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions.
(A) Credit risk
The company is exposed to credit risk, which is the risk that counter party will default on its contractual obligation resulting in a financial loss to the company. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, analysis of historical bad debts and ageing of accounts receivable as of different reporting periods.
(B) Market risk
(i) Foreign currency risk
The Company enters into foreign currency transactions in the Foreign Exchange and Leisure Travel Outbound businesses. The currency risk arising out of foreign currency transactions in the Foreign Exchange business is monitored by a central dealing room, which then hedges the positions transactions entered into at individual locations across the country, through deals in the interbank market, or through forward contracts, thereby ensuring that there are minimal open positions. In the Leisure Travel Outbound business, package prices are denominated partly in the functional currency of the Company, Indian Rupees (INR), and partly in foreign currencies. The portion of customer collection in foreign currencies, which is parked in Nostro bank accounts, is used to pay off vendor liabilities, denominated in foreign currencies, thereby creating a natural hedge. As a result, the risk related to foreign currency exchange rate fluctuation is insignificant.
* Net Exposure of Rs. 2,183.8 lakhs and Rs.2,304.2 lakhs is due to the Accrued Income which is included in balance sheet for the amount of Rs. 3,279.0 lakhs in current year and Rs. 2,376.7 lakhs in last year. The Company will cover this exposure on actual receipt of foreign currency amount.
(b) Sensitivity:
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments and from foreign forward exchange contracts.
Sensitivity
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates. Changes in interest rate are based on historical movement.
* Holding all other variables constant
(iii) Price risk Exposure
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss. Since the company does not have material equity investments, the company does not have a material price risk exposure as of reporting period.
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company''s treasury maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the company''s liquidity position (comprising the unused cash and bank balances along with temporary investments in fixed deposits and/or liquid mutual funds) on the basis of expected cash flows.
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
(ii) Maturities of financial liabilities
The tables below analyse the company''s financial liabilities into relevant maturity based on their contractual maturities for: all non-derivative financial liabilities, and net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Notes:
1 These Companies are subsidiaries of Travel Corporation (India) Limited and step down subsidiaries of Thomas Cook (India) Limited
2 These Companies are subsidiaries of SOTC Travel Ltd and step down subsidiaries of Thomas Cook (India) Limited
3 These Companies are subsidiaries of Sterling Holiday Resorts Limited and step down subsidiaries of Thomas Cook (India) Limited
4 Quess Corp Limited ceased to be a subsidiary as at February 28, 2018
5 These Companies are subsidiaries of Thomas Cook (Mauritius) Holding Company Limited and step down subsidiaries of Thomas Cook (India) Limited
6 These Companies are subsidiaries of Thomas Cook Lanka (Private) Limited and step down subsidiaries of Thomas Cook (India) Limited
7 These Companies are subsidiaries of Asian Trail Holdings Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
8 This Company is an Associate of Asian Trail Holdings Ltd and step down Associate of Thomas Cook (India) Limited
9 These Companies are subsidiaries of Travel Circle International (Mauritius) Ltd and step down subsidiaries of SOTC Travel Ltd
10 These Companies are subsidiaries of Desert Adventures Tourism LLC and step down subsidiaries of Travel Circle International (Mauritius) Ltd
11 This Company is subsidiary of Kuoni Australia Holding Pty Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
12 This Company is subsidiary of Asian Trails Ltd and step down subsidiaries of Asian Trail Holdings Ltd
13 This Company is subsidiary of Gulf Dunes LLC and step down subsidiaries of Travel Circle International (Mauritius) Ltd
14 This Company is subsidiary of Kuoni Private Safaris (Pty.) Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
15 These Companies are subsidiaries of DEI Holdings Limited and step down subsidiaries of Travel Circle International (Mauritius) Ltd
16 This Company is subsidiary of Asian Trails International Travel Services (Beijing) Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
17 This Company is an Associate of TC Tours Ltd and step down Associate of Thomas Cook (India) Limited
18 This Company is an Associate of Travel Corporation (India) Limited and step down Associate of Thomas Cook (India) Limited
(c) Other related parties with whom the Company had transactions during the year Fellow subsidiaries:
- Fairbridge Capital Private Limited
- Fairfax India Charitable Foundation
Subsidiaries of Quess Corp Limited
- Co-Achieve Solutions Private Limited
Associate of Quess Corp Limited
- Terrier Security Services (India) Private Limited
(d) Key management personnel ("KMP")
Madhavan Menon
Mahesh Iyer
Brijesh Modi
Amit Parekh
@ Gratuity is contributed for the Company as a whole and hence excluded.
2 Transfer pricing
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international as well as specified domestic transactions (if applicable) entered into with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated timeline, as required by law. The Management is of the opinion that its international as well as specified domestic transactions (if any) are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.
3 Share based payments
Employee option plan/tradable Options Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007.The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010, by the shareholders as at and for the year ended March 31, 2016 Thomas Cook (India) Limited of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Lakh) equity shares. The maximum number of equity shares that may be issued/transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Thirty Lakh) equity shares.
Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2013". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.
The objectives of this plan are:
a) to reward the Senior Employees of the Company for their performance
b) to motivate them to contribute to the growth and profitability of the Company and
c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.
Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - ("SHRIL ESOS 2012")
The purpose of the ESOS is to provide the employees with an additional incentive in the form of options to receive the equity shares of the Company at a future date. The ESOS is aimed at further motivating and retaining the employees and thereby increasing the profitability of the Company.
Vesting Schedule:
Grant I dated January 24, 2013:
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 3 tranches which is 40%, 30%, 30% on each of the anniversaries from the grant date.
Grant II dated July 30, 2014:
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 4 tranches which is 25%, 25%, 25%, 25% on each of the anniversaries from the grant date.
Grant date means the date on which the options are granted to the eligible employees by the Company/Committee under the Scheme. Exercise price:
Exercise price shall not be less than the par value of the Equity Shares of the Company and shall not be more than the price prescribed under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as defined in the Guidelines), whichever is more.
- The Exercise price of Rs. 96.00 for Grant I was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on January 24, 2013.
- The Exercise price of Rs. 130.15 for Grant II was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on July 30, 2014.
- As per clause 15.3.2 of the Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook (India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the company''s schemes and Stock Options which had been granted but not exercised as of the Record Date, by such SHRIL employees shall lapse and in lieu of the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100 options of SHRIL. The revised Exercise Price for Grant I was Rs. 80.00 and for Grant II was Rs. 108.46. Subject to the terms of the Scheme and SEBI ESOP Guidelines, the option holder will have a period of 5 years from the date of which the Options have vested, within which the vested options can be exercised.
Thomas Cook Employees Stock Scheme 2018 - Management (ESOP 2018 - Management)
The Company has established an Employee Stock Option Scheme called -"Thomas Cook Employees Stock Scheme 2018 - Management (ESOP 2018 - Management)". The Scheme of Thomas Cook (India) Limited has been approved by the special resolution passed on April 11, 2018 through Postal ballot by the shareholders. The Scheme is regulated by the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time and includes all regulations, clarifications and statutory modifications issued there under and also any new regulations on the matter of share based employee benefits.
The Exercise price of the Vested Option shall be 50% of the Market price as defined under the SEBI Regulations.
The purpose of this Scheme is to reward and retain the employees of the Subsidiary Companies of Thomas Cook under its control for high levels of individual performance and for exceptional efforts to improve the financial performance of the respective subsidiary companies, which will ultimately contribute to the success of Thomas Cook. This purpose is sought to be achieved through the grant of Options, for and on behalf of, and at the behest of the subsidiary companies to their employees.
The maximum number of Shares that may be issued pursuant to Exercise of Options Granted to the Participant under this Scheme shall not exceed 36,72,000 Shares of Thomas Cook. All Options that have lapsed (including those having lapsed by way of forfeiture) shall be added back to the number of Options that are pending to be granted or Shares pending to be allotted. The Company may Grant such Options within the overall limit i.e. 36,72,000
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 3 years date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters.
Thomas Cook Employees Stock Scheme 2018 - Execom
The Company has established an Employee Stock Option Scheme called -"Thomas Cook Employees Stock Scheme 2018 - Execom ". The Scheme of Thomas Cook (India) Limited has been approved by the special resolution passed on April 11, 2018 through Postal ballot by the shareholders. The Scheme is regulated by the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time and includes all regulations, clarifications and statutory modifications issued there under and also any new regulations on the matter of share based employee benefits.
The Exercise Price shall be equal to face value of shares i.e. Re. 1 per option.
The objective of the ESOP 2018 - Execom is to reward the Execom Employees of the Company for their performance and to motivate them to contribute to the growth and profitability of the Company. The Company also intends to use this Scheme to retain talent in the organization. The Company views Employee Stock Options as instruments that would enable the Employees to share the value they create for the Company and align individual objectives of employees with objectives of the Company in the years to come.
The maximum number of Shares that may be issued pursuant to Exercise of Options Granted to the Participant under this Scheme shall not exceed 17,54,458 Shares of Thomas Cook. All Options that have lapsed (including those having lapsed by way of forfeiture) shall be added back to the number of Options that are pending to be granted or Shares pending to be allotted. The Company may Grant such Options within the overall limit i.e. 17,54,458
The Scheme shall be applicable to the Execom and Employees of the Company, its Subsidiary companies in India and abroad, as determined by the Committee on its own discretion from time to time.
Options granted under ESOP 2018 - Execom would Vest only at the end of 5 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The specific performance parameters will be decided by the Committee from time to time and will be communicated to the employees. The attainment of such performance parameters would be determined by the Committee from time to time which shall be a mandatory condition for vesting of options.
The average share price at the date of exercise of options exercised during the year ended March 31, 2019 was Rs. 244.57 March 31, 2018- Rs. 235.65)
Weighted average share price of equity shares is the average closing price on the National Stock Exchange for a period of one year up to the Valuation Date.
The risk free interest rates are based on the yield on government bonds prevailing as at the Valuation Date for maturities over a period corresponding to the remaining life of the options.
The volatility is a measure of the level of fluctuation in the value of the underlying asset. The volatility is measured as the standard deviation of the underlying asset''s returns.
Dividend yield based on the average dividend yield generated by TCIL over the past period corresponding to the remaining life of the options.
Modification of share based payment:
In the course of business combination effective from August 18, 2015 as per the court scheme, under which Sterling was merged with Thomas Cook Insurance services, Thomas cook India limited had replaced the erstwhile ESOS scheme of sterling by issuing shares from its share capital. Such modification of share based payment arrangements are accounted for as per Ind AS 102. Fair value of the replacement options issued by the company are calculated using the inputs disclosed in inputs table.
4 Segment Information
(a) Description of segments and principal activities
The group''s strategic steering committee, consisting of the chief executive officer, the chief financial officer and the manager for corporate planning, examines the group''s performance both from a product and geographic perspective and has identified four reportable segments of its business:
Financial Services Includes wholesale and retail purchase and sale of foreign currencies and paid documents
Travel and related services Includes tour operations, travel management, visa services and travel insurance and related services
Human resource services Includes staffing services, facilities management services, selection services, training fees, food service and engineering service
(e) Information concerning the classification of securities
Options granted to employees under the ESOP Option Plan are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 33.
6 Acquisition of stake in Travel Corporation (India) Limited (TCI)
The Company has completed the acquisition of 4.44% stake in Travel Corporation (India) Limited (TCI), i.e. 73,234 equity shares of face value Rs. 10/- each at Rs. 2,279.30 per share from Sterling Holiday Resorts Limited, a wholly owned subsidiary of the Company. Pursuant to the said acquisition, the Company now directly holds 100% stake in TCI.
7 Subscription of Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS)
The Company subscribed 3,03,000 Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS), of Rs. 10 each at face value offered by Sterling Holiday Resorts Limited, a wholly owned subsidiary of the Company, on rights basis.
8 Acquisition of TC Travel and Services Limited
The Company has completed the acquisition of 100% stake in TC Travel and Services Limited from TC Tours Limited (formerly known as Thomas Cook Tours Limited), a wholly owned subsidiary of the Company for consideration of Rs. 300.0 lakhs.
9 Redemption of Non-Convertible Debentures (Unsecured) (NCD)
Pursuant to the terms of issue of Non-Convertible Debentures (Unsecured) (NCD) that were issued and allotted on a private placement basis during the financial year 2013, the Company on April 16, 2018 redeemed 334 Non Convertible Debentures (under Tranche III) of Rs. 10 lakhs each aggregating to Rs. 3,334.0 lakhs. The said NCD is delisted from BSE & NSE.
Pursuant to the terms of issue of Non-Convertible Debentures (Unsecured) (NCD) that were issued and allotted on a private placement basis during the financial year 2015-16, the Company on August 31, 2018 redeemed Non Convertible Debentures (under Series I) aggregating to Rs. 3,300.0 lakhs. Further, the Company on September 24, 2018, made early redemption of the balance Non-Convertible Debentures (Unsecured) (NCD) (under Series II and Series III) that were issued and allotted on a private placement basis during the financial year 2015-16 aggregating to Rs. 6,700.0 lakhs. The said NCD is delisted from BSE & NSE.
10 Scheme of Amalgamation and arrangement
The Board at its meeting held on December 19, 2018 approved the amendments to the Composite Scheme of Arrangement and Amalgamation amongst Thomas Cook (India) Limited (''TCIL''), Quess Corp Limited (''QCL''), Travel Corporation (India) Limited (''TCI''), TC Forex Services Limited (formerly known as Tata Capital Forex Limited) (''TCF''), TC Travel and Services Limited (''TCTSL'') and SOTC Travel Management Private Limited (formerly known as SITA Travels and Tours Private Limited) (''SOTC TRAVEL'') and their respective shareholders (''the Scheme'') in accordance with the provisions of Sections 230 to 232 read with Sections 52, 55, and 66 of the Companies Act, 2013. The Scheme inter alia provides:
i. Demerger of the inbound business of TCI consisting of business of handling inward foreign tourist activity from TCI into SOTC TRAVEL; and
ii. Amalgamation of residual TCI, TCF and TCTSL with TCIL; and
iii. Demerger of the Human Resource Services Business of TCIL (including shares in QCL held by TCIL) into QCL. As a part of consideration, QCL will issue its own shares to the shareholders of TCIL.
The Scheme is subject to requisite statutory and regulatory approvals and sanction by the respective shareholders of each of the companies involved in the Scheme.
11 Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015
12 IND AS 115 ''Revenue from Contracts with Customers''
ith effect from April 1, 2018, the Company has adopted Ind AS 115 ''Revenue from Contracts with Customers'' that replaces Ind AS 18. It introduces a new five-step approach to measuring and recognizing revenue from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for services to a customer.
The Company has opted for the cumulative effect method (modified retrospective application) permitted by Ind AS 115 upon adoption of new standard. Accordingly, the standard has been applied for the year ended March 31, 2019 only (i.e. the initial application period). This method requires the recognition of cumulative impact of adoption of Ind AS 115 on all contracts as at April 1, 2018 (''transition date'') in equity and the comparative information continues to be reported under Ind AS 18. The impact of the adoption of the standard on the financial statements is not material.
Also the Company has elected to use the practical expedient that there is no financing component involved when the credit period offered to customers is less than 12 months.
Prior to adoption of IND AS 115, the Company''s revenue was primarily comprised of Revenue from travel and related services, financial services and human resource services. The recognition of these revenue streams is largely unchanged by Ind AS 115.
iii) Contract balance
The contract liabilities primarily relate to the advance consideration received from customers for which revenue is recognized when the performance obligation is over / services delivered.
Advance Collections is recognized when payment is received before the related performance obligation is satisfied. This includes advances received from the customer towards leisure tour / holiday''s packages. Revenue on leisure tours / holiday''s packages are recognized on the completion of the performance obligation which is on the date of departure of the tour.
13 Subsequent Events
(a) Declaration of final dividend
Refer to note 25 for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.
The accompanying notes are an integral part of the standalone financial statements.
Mar 31, 2018
1. Critical Accounting Estimates and Judgments:
The preparation of Financial Statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.
The areas involving critical estimates and judgments are:
Recognition of deferred tax assets for carried forward unabsorbed depreciation - note 16 Estimated goodwill impairment - note 4 (ii)
Estimation of Defined Benefit Obligation - note 15 Impairment of trade receivables - note 30
Estimation of inputs for fair value of Share based payment instrument - note 33
Fair value of financial instruments - note 29
Useful life of property, plant & equipment. - note 3
Recognition and measurement of provision and contingencies. - note 26
Impairment of investment - note 5
Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.
2 (a) Current / Non Current Classification
All assets and liabilities are classified into current and non-current:
Assets
An asset is classified as current when it satisfies any of the following criteria:
a) it is expected to be realized in, or is intended for sale or consumption in, the company''s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realized within 12 months after the reporting date; or
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All other assets are classified as non-current. Liabilities
A liability is classified as current when it satisfies any of the following criteria:
a) it is expected to be settled in the Company''s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within 12 months after the reporting date; or
d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
Operating cycle:
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Based on the above definition and the nature of services provided, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.
3 (b) Recent accounting pronouncement
Amendment to Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The company is evaluating the requirements of the amendment and the effect on the financial statements is not likely to be significant.
(ii) Contractual Obligations
Refer Note 27 (a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.
(iii) Capital Work-in-progress
Capital work-in-progress mainly comprises of computer hardware, furniture & fixtures and office equipment
(iv) Cost of Office Building includes:
(a) 60 (Previous year - 60) unquoted fully paid-up Shares of Rs. 0.03 (Previous year Rs. 0.03) in various Co-operative Societies.
(b) Share application money of Rs. 0.02 (Previous year Rs. 0.02) to various Co-operative Societies.
(c) Premises of Rs. 11,739.4 (Previous year Rs. 1,155.1) where the Co-operative Society is yet to be formed.
(i) Intangible assets includes:
Intangible Assets (software) includes Internally generated / developed software - Gross Block Rs. 2,000.5 (Previous year Rs. 1595.2); Net Block Rs. 627.9 (Previous year Rs. 105.9).
(ii) Significant Estimate - Impairment tests of goodwill
The entire amount of goodwill pertains to Sterling business (cash generating unit) generated at the time of acquisition and is tested for impairment on an annual basis. Recoverable amount of the CGU is based on its property fair values less cost to sell which is higher than the carrying value of the cash generating unit.
(ii) Terms and rights attached to shares
a) The Company has one class of equity shares having a par value of Rs. 1/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution to preference shareholders of all preferential amounts, in proportion to their shareholding.
Shares reserved for issue under options
Information relating to Thomas Cook India Limited''s Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 33.
Nature and Purpose of Reserves Capital Redemption Reserve
The Company has issued Non convertible redeemable preference shares during FY 15-16. In order to comply with the requirements of section 69 of the Companies Act, 2013, the Company has transferred amounts to Capital Redemption Reserve.
Debenture Redemption Reserve
The Company has issued Non Convertible Debentures. In order to comply with the requirements of section 71 of the Companies Act, 2013, the Company has transferred amounts to Debenture Redemption Reserve.
Share Option Outstanding Amount
The share option outstanding account is used to recognized the grant date fair value of options issued to employees under the company''s Employee stock option plan. This includes options issued to the employees of the subsidiaries.
General reserves
General reserve is used to record transfer from debenture redemption reserve. The reserves is utilized in accordance with the provisions of the Act.
Securities premium amount
Securities premium reserve is used to record the premium on issue of shares and towards allotment of ESOP. The reserves is utilized in accordance with the provisions of the Act.
@ Includes Book Overdrafts aggregating to Rs. 1,190.1 (Previous year Rs. 507.9)
# Includes Rs. 34,405.6 secured by bank guarantee of USD 17,100,000 (Rs. 11,144.9), Previous year Rs. 36,278.2 secured by bank guarantee of USD 17,100,000 (Rs. 11,089.3)
Note: There are no delayed payments to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Further, there are no dues to such parties which are outstanding as at the Balance Sheet date. This information has been determined on the basis of information available with the company. This has been relied upon by the auditors.
(i) Leave Obligations - Compensated absences
The leave obligations cover the Company''s liability for earned leave.
The amount of the provision of Rs. 211.7 (March 31, 2017 - Rs. 154.2) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. The following amounts reflect leave that is expected to be taken or settled within the next 12 months.
(ii) Post Employment Obligations
The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognized funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
In respect of certain employees, the Company has Defined Benefit Plan for Other Long-term Employee Benefit in the form of Provident Fund. Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company.
Risk Exposure for gratuity
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below :
a) Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields, if the plan assets underperform this yield, this will create a deficit. Further any decrease in the bond yields will increase the plan liabilities. The plan assets investments are in unquoted securities which are subject to interest rate risks and the fund manages the interest rate risks to an acceptable low level.
b) Salary growth & Demographic assumptions: The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lumpsum in nature the plan is not subject to any longevity risks.
4 Capital management
The Company''s objectives when managing capital are to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Debt is calculated as total borrowings (including ''current and non-current borrowings'' as shown in the balance sheet). Total capital is calculated as ''equity'' as shown in the balance sheet plus debt.
(i) Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are
(a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
* Amount is below the rounding off norm adopted by the Company.
Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize 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.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
- the foreign exchange forward contracts are marked to market using forward FEDAI rates pertaining to the date of maturity of the contract at the balance sheet date.
- Discount rates to fair value of financial assets and liabilities at amortized cost is based on general lending rate.
The carrying amounts of Accrued revenue, insurance claim receivable, advance to related parties, current borrowings, trade payables, trade receivable, other financial liabilities, cash and cash equivalents and other bank balances are considered to be the same as their fair values due to their short-term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
5. Financial risk management
The Company''s activities expose it to credit risk, market risk and liquidity risk.
The company'' has an overall Enterprise Risk Management policy, approved by the Audit Committee of the Board of Directors. Risks are managed by the individual Business Units, or the Support Services'' unit, entering into the base transactions, which give rise to the risks. The Executive Committee (comprising the Chairman & Managing Director, the Chief Financial Officer, and the Heads of the Business Units and Support Services'' units) has the overall responsibility for the risk management framework and its effectiveness, with the respective Heads of Business Units/ Support Services'' units, being responsible for its implementation and day-to- day monitoring. The Company''s policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions.
(A) Credit Risk
The company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the company. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, analysis of historical bad debts and ageing of accounts receivable as of different reporting periods.
(B) Market risk
(i) Foreign currency risk
The Company enters into foreign currency transactions in the Foreign Exchange and Leisure Travel Outbound businesses. The currency risk arising out of foreign currency transactions in the Foreign Exchange business is monitored by a central dealing room, which then hedges the positions transactions entered into at individual locations across the country, through deals in the interbank market, or through forward contracts, thereby ensuring that there are minimal open positions. In the Leisure Travel Outbound business, package prices are denominated partly in the functional currency of the Company, Indian Rupees (Rs.), and partly in foreign currencies. The portion of customer collection in foreign currencies, which is parked in Nostro bank accounts, is used to pay off vendor liabilities, denominated in foreign currencies, thereby creating a natural hedge. As a result, the risk related to foreign currency exchange rate fluctuation is insignificant.
* Net Exposure of Rs. 2304.2 Lakhs and Rs. 774.9 Lakhs is due to the Accrued Income which is included in balance sheet for the amount of Rs. 2376.7 Lakhs in current year and Rs. 747.4 Lakhs in last year. The Company will cover this exposure on actual receipt of foreign currency amount.
(b) Sensitivity:
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments and from foreign forward exchange contracts.
* Holding all other variables constant
(iii) Price Risk Exposure
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss. Since the company does not have material equity investments, the company does not have a material price risk exposure as of reporting period.
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company''s treasury maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the company''s liquidity position (comprising the unused cash and bank balances along with temporary investments in fixed deposits and/or liquid mutual funds) on the basis of expected cash flows.
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
(ii) Maturities of financial liabilities
The tables below analyse the company''s financial liabilities into relevant maturity based on their contractual maturities for:
- all non-derivative financial liabilities, and
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
* These Companies are subsidiaries of Travel Corporation (India) Limited and step down subsidiaries of Thomas Cook (India) Limited ** These Companies are subsidiaries of SOTC Travel Ltd and step down subsidiaries of Thomas Cook (India) Limited
*** These Companies are subsidiaries of Sterling Holiday Resorts Limited and step down subsidiaries of Thomas Cook (India) Limited $ Quess Corp Limited ceased to be a subsidiary as at February 28, 2018
# These Companies are subsidiaries of Thomas Cook (Mauritius) Holding Company Limited and step down subsidiaries of Thomas Cook (India) Limited ## These Companies are subsidiaries of Thomas Cook Lanka (Private) Limited and step down subsidiaries of Thomas Cook (India) Limited ### These Companies are subsidiaries of TC Tours Limited and step down subsidiaries of Thomas Cook (India) Limited
These Companies are subsidiaries of Ouess Corp Limited and step down Associate of Thomas Cook (India) Limited
These Companies are Associate of Ouess Corp Limited and step down Associate of Thomas Cook (India) Limited
@ These Companies are subsidiaries of Asian Trail Holdings Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
@@ These Companies are subsidiaries of Travel Circle International (Mauritius) Ltd and step down subsidiaries of SOTC Travel Ltd
@@@ These Companies are subsidiaries of Desert Adventures Tourism LLC and step down subsidiaries of Travel Circle International (Mauritius) Ltd
AThese Companies are subsidiaries of Kuoni Austrailia Holding Pty Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
AAThese Companies are subsidiaries of Asian Trails Ltd and step down subsidiaries of Asian Trail Holdings Ltd
AAA These Companies are subsidiaries of Gulf Dunes LLC and step down subsidiaries of Travel Circle International (Mauritius) Ltd
aaaa These Companies are subsidiaries of Kuoni Private Safaris (Pty.) Ltd and step down subsidiaries of Travel Circle International (Mauritius) Ltd
(c) Other Related Parties with whom the Company had transactions during the year / period Fellow subsidiaries:
- Fairbridge Capital Private Limited
Subsidiaries Ouess Corp Limited
- Co-Achieve Solutions Private Limited
- Aravon Services Private Limited
Associate of Ouess Corp Limited
- Terrier Security Services (India) Private Limited
32 Transfer Pricing
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international as well as specified domestic transactions (if applicable) entered into with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated timeline, as required by law. The Management is of the opinion that its international as well as specified domestic transactions (if any) are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.
6.Share based payments
Employee option plan/ Tradable Options Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2007". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007.The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long term business goals.
(b) Retain key talent in the organization.
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual installments on each of the anniversaries from the Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010, by the shareholders as at and for the year ended March 31, 2016 Thomas Cook (India) Limited of a Postal Ballot and shall be effective from that date. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Lakhs) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Lakhs) equity shares. Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called -"Thomas Cook Employees Stock Option Plan - 2013". The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.
The objectives of this plan are:
a) to reward the Senior Employees of the Company for their performance
b) to motivate them to contribute to the growth and profitability of the Company and
c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.
Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - ("SHRIL ESOS 2012")
The purpose of the ESOS is to provide the employees with an additional incentive in the form of Options to receive the equity shares of the Company at a future date. The ESOS is aimed at further motivating and retaining the employees and thereby increasing the profitability of the Company.
Vesting Schedule :
Grant I dated January 24, 2013 :
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 3 tranches which is 40%, 30%, 30% on each of the anniversaries from the Grant Date.
Grant II dated July 30, 2014 :
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 4 tranches which is 25%, 25%, 25%, 25% on each of the anniversaries from the Grant Date.
Grant Date means the date on which the Options are granted to the eligible employees by the Company/Committee under the Scheme.
Exercise Price :
Exercise price shall not be less than the par value of the Equity Shares of the Company and shall not be more than the price prescribed under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as defined in the Guidelines), whichever is more.
- The Exercise price of Rs. 96.00 for Grant I was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on January 24, 2013.
- The Exercise price of Rs. 130.15 for Grant II was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on July 30, 2014.
- As per clause 15.3.2 of the Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook (India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the company''s schemes and Stock Options which had been granted but not exercised as of the Record Date, by such SHRIL employees shall lapse and in lieu of the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100 options of SHRIL. The revised Exercise Price for Grant I was Rs. 80.00 and for Grant II was Rs. 108.46. Subject to the terms of the Scheme and SEBI ESOP Guidelines, the option holder will have a period of 5 years from the date of which the Options have vested, within which the vested options can be exercised.
Fair Value of options granted
The fair value at grant date is determined using the Black-Scholes Model which takes into account the exercise price, expected volatility, option''s life, the share price at grant date, expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The inputs for the options granted during the year ended March 31, 2017 included:
The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. The expected volatility was determined based on the volatility of the equity share for the period of one year prior to issue of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.
Modification of share based payment:
In the course of business combination effective from August 18, 2015 as per the court scheme, under which Sterling was merged with Thomas Cook Insurance services, Thomas cook India limited had replaced the erstwhile ESOS scheme of sterling by issuing shares from its share capital. Such modification of share based payment arrangements are accounted for as per Ind AS 102. Fair value of the replacement options issued by the company are calculated using the inputs disclosed in inputs table.
(e) Information concerning the classification of securities
Options granted to employees under the ESOP Option Plan are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 33.
7 During the previous year, the company has acquired SOTC Travel Management Private Limited (formerly known as SITA Travels and Tours Private Limited) from its subsidiary SOTC Travel Limited for a consideration of Rs. 1.0 Lakhs.
8 The Company on October 30, 2017, completed the acquisition of 100% stake in TC Forex Services Limited (formerly known as Tata Capital Forex Limited) from Tata Capital Limited. Further, during the quarter ended December 31, 2017, the Company has made an investment in TC Forex Servcies Limited through Right Issue of equity shares. The Company has subscribed 9,11,164 equity shares of Rs. 10/- each during the right issue at Rs. 10.97 per share.
9 Exceptional Items
(a) During the year the Company has sold 5.42% (7,500,000 shares) equity stake of its subsidiary Quess Corp Limited through Offer For Sale (OFS) for net sales consideration of Rs. 62,850.95 Lakhs. The profit on sale of shares of Rs. 53,536 Lakhs (net of relevant selling expenses) have been shown as exceptional item.
(b) Pursuant to Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Limited ("SHRIL"), Thomas Cook Insurance Services (India) Limited ("TCISIL") and Thomas Cook (India) Limited ("TCIL''''), an Order was passed by Competition Appellate Tribunal (COMPAT) for setting aside the impugned order of Competition Commission of India (CCI). upon an appeal of CCI, Hon''ble Supreme Court of India by its order dated April 17, 2018 restored the order passed by CCI imposing penalty of Rs. 100 Lakhs with no costs on the Company. The amount is included in as an exceptional items for the year ended March 31, 2018 result.
10 Loss of control of Subsidiary
The Board of Directors of the Company at its meeting held on April 23, 2018 has ratified the management decision to re-classify the Company''s investment in Quess Corp Limited from a subsidiary to an associate company under Ind AS 110 with effect from March 1, 2018. In this context, the Board also recognized certain participative rights of Mr. Ajit Isaac and Net Resources Investments Private Limited in day-to-day management and operations of Quess Corp limited.
11 Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015
Loans and advances in the nature of loans to subsidiary
12 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (''CODM''). The company while presenting the consolidated financial statements has disclosed the segment information as required under Indian Accounting Standards 108 "Operating Segments".
13 The Composite Scheme of Arrangement and Amalgamation between SOTC Travel Services Private Limited (earlier known as Kuoni Travel (India) Private Limited), Distant Frontiers Tours Private Limited, SITA Beach Resorts Private Limited, SITA Destination Management Private Limited, SITA Holidays (India) Private Limited, SITA Holidays Resorts Private Limited, SITA Incoming (India) Private Limited, SOTC Travel Private Limited (formerly known as SITA Travels Private Limited) and Travel Corporation (India) Limited (the Scheme) was approved by the National Company Law Tribunal (NCLT) at its hearing held on April 19, 2017. The Scheme has been filed with the Registrar of Companies on June 1, 2017 in pursuance of which it has become operative on and from June 1, 2017, the Effective Date. Accounting has been done as per the scheme approved by NCLT.
14 During the previous year, the company has sold Jardin Travel Solutions Limited to its subsidiary Travel Corporation (India) Limited for a consideration of Rs. 0.5 Lakhs.
15 Subsequent Events
(a) Declaration of final dividend
Refer to note 25 for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.
(b) Acquisition of stake in Travel Corporation (India) Limited (TCI)
The Company has completed the acquisition of 4.44% stake in Travel Corporation (India) Limited (TCI), i.e. 73,234 equity shares of face value Rs. 10/- each at Rs. 2,279.30 per share from Sterling Holiday Resorts Limited, a wholly owned subsidiary of the Company. Pursuant to the said acquisition, the Company now directly holds 100% stake in TCI.
(c) Subscription of Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS)
The Company subscribed 3,03,000 Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS), of Rs. 10 each at face value offered by Sterling Holiday Resorts Limited, a wholly owned subsidiary of the Company, on rights basis.
(d) Acquisition of TC Travel and Services Limited
The Company has completed the acquisition of 100% stake in TC Travel and Services Limited from TC Tours Limited (formerly known as Thomas Cook Tours Limited), a wholly owned subsidiary of the Company for consideration of Rs. 300.0 Lakhs
(e) Redemption of Non-Convertible Debentures (Unsecured) (NCD)
Pursuant to the terms of issue of Non-Convertible Debentures (Unsecured) (NCD) that were issued and allotted on a private placement basis during the financial year 2013, the Company on April 16, 2018 redeemed 334 Non Convertible Debentures (under Tranche III) of Rs. 10Lakhs each aggregating to Rs. 3,334.0 Lakhs. The said NCD is delisted from BSE & NSE.
(f) Scheme of Amalgamation and arrangement
The Board at its meeting held on April 23, 2018 approved the Composite Scheme of Arrangement and Amalgamation amongst Thomas Cook (India) Limited (''TCIL''), Quess Corp Limited (''QCL''), Travel Corporation (India) Limited (''TCI''), TC Forex Services Limited (formerly known as Tata Capital Forex Limited) (''TCF''), TC Travel and Services Limited (''TCTSL'') and SOTC Travel Management Private Limited (formerly known as SITA Travels and Tours Private Limited) (''SOTC TRAVEL'') and their respective shareholders (''the Scheme'') in accordance with the provisions of Section 230 to 232 read with Section 52, 55, and 66 of the Companies Act, 2013. The Scheme inter-alia provides:
i. Demerger of the inbound business of TCI consisting of business of handling inward foreign tourist activity from TCI into SOTC TRAVEL; and
ii. Amalgamation of residual TCI, TCF and TCTSL with TCIL; and
iii. Demerger of the Human Resource Services Business of TCIL (including shares in QCL held by TCIL) into QCL. As a part of consideration, QCL will issue its own shares to the shareholders of TCIL.
The Scheme is subject to requisite statutory and regulatory approvals and sanction by the respective shareholders of each of the companies involved in the Scheme.
16 Corresponding figures for year ended March 31, 2017 have been audited by another auditor who expressed an unmodified opinion dated May 25, 2017 on the Ind AS financial statement of the Company.
Mar 31, 2017
Background:
Thomas Cook (India) Limited (the âCompanyâ) is a Public Limited Company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged in diversified travel and travel related businesses, working as Travel Agent and Tour Operator. The Company is also engaged as an Authorised Foreign Exchange Dealer.
1. Critical Accounting Estimates and Judgements:
The preparation of Financial Statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.
The areas involving critical estimates or judgements are:
Recognition of deferred tax assets for carried forward unabsorbed depreciation -note 16 Estimated goodwill impairment - note 4 (ii)
Estimation of Defined Benefit Obligation - note 15 Impairment of trade receivables - note 29
Estimation of inputs for fair value of Share based payment instrument - note 32
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.
(i) Leased Assets
Computers and Vehicles includes the following amounts where the company is a lessee under a finance lease:
* Fully depreciated as at April 1, 2015
(ii) Contractual Obligations
Refer Note 26 (a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.
(iii) Capital Work-in-progress
Capital work-in-progress mainly comprises of computer hardware, properties, furniture & fixtures and office equipment
(iv) Cost of Office Building includes:
(a) 60 (Previous year - 60, 1 April 2015 - 60) unquoted fully paid-up Shares of INR 0.03 (Previous year INR 0.03, 1 April 2015 INR 0.03) in various Co-operative Societies.
(b) Share application money of INR 0.02 (Previous year INR 0.02, 1 April 2015 INR 0.02) to various Co-operative Societies.
(C) Premises of INR 1,155.1 (Previous year INR 1,181.9, 1 April 2015 INR 1,472.5) where the Co-operative Society is yet to be formed. 3
(i) Intangible assets includes:
Intangible Assets (software) includes Internally generated / developed software - Gross Block INR 1595.2 (Previous year INR 1595.2, 1 April 2015 INR 1595.2); Net Block INR 105.9 (Previous year INR 269.0 1 April 2015 INR 488.1).
(ii) Significant Estimate - Impairment tests of goodwill
The entire amount of goodwill pertains to Sterling business (cash generating unit) generated at the time of acquisition and is tested for impairment on an annual basis. Recoverable amount of the CGU is based on its property values which is higher than the carrying value of the cash generating unit.
(iii) Leased assets
Software includes the following amounts where the company is a lessee under a finance lease:
Nature and Purpose of Reserves Capital Redemption Reserve
The Company has issued Non convertible redeemable preference shares during the year. In order to comply with the requirements of section 69 of The Companies Act, 2013, the Company has transferred amounts to Capital Redemption Reserve.
Debenture Redemption Reserve
The Company has issued Non Convertible Debentures. In order to comply with the requirements of section 71 of The Companies Act, 2013, the Company has transferred amounts to Debenture Redemption Reserve.
Share Option Outstanding Amount
The share option outstanding account is used to recognised the grant date fair value of options issued to employees under the companyâs Employee stock option plan. This includes options issued to the employees of the subsidiaries.
General reserves
General reserve is used to record transfer from capital redemption reserve and debenture redemption reserve. The reserves is utilised in accordance with the provisions of the Act.
Securities premium reserve
Securities premium reserve is used to record the premium on issue of shares and towards allotment of ESOP. The reserves is utilised in accordance with the provisions of the Act.
(i) Leave Obligations - Leave Entitlement
The leave obligations cover the Companyâs liability for earned leave.
The amount of the provision of INR 154.2 (31 March 2016 - INR 212.0, 1 April 2015 - INR NIL) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. The following amounts reflect leave that is expected to be taken or paid within the next 12 months.
(ii) Post Employment Obligations
The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
In respect of certain employees, the Company has Defined Benefit Plan for Other Long-term Employee Benefit in the form of Provident Fund. Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company.
Note 3: Capital management
3 (a): Risk management
The companyâs objectives when managing capital are to safeguard the companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Debt is calculated as total borrowings (including âcurrent and non-current borrowingsâ as shown in the balance sheet). Total capital is calculated as âequityâ as shown in the balance sheet plus debt.
Note 4: Events occurring after the reporting period
(i) Declaration of final dividend
Refer to note 24 (b) for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.
Note 5: Disclosure on Specified Bank Notes (SBNs)
During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017. The details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:
The Companyâs activities expose it to credit risk, market risk and liquidity risk.
The companyâ has an overall Enterprise Risk Management policy, approved by the Audit Committee of the Board of Directors. Risks are managed by the individual Business Units, or the Support Servicesâ unit, entering into the base transactions, which give rise to the risks. The Executive Committee (comprising the Chairman & Managing Director, the Chief Financial Officer, and the Heads of the Business Units and Support Servicesâ units) has the overall responsibility for the risk management framework and its effectiveness, with the respective Heads of Business Units/ Support Servicesâ units, being responsible for its implementation and day-to- day monitoring.
(A) Credit Risk
The company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the company. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, analysis of historical bad debts and ageing of accounts receivable as of different reporting periods.
(B) Market risk
(i) Foreign currency risk
The Company enters into foreign currency transactions in the Foreign Exchange and Leisure Travel Outbound businesses. The currency risk arising out of foreign currency transactions in the Foreign Exchange business is monitored by a central dealing room, which then hedges the positions transactions entered into at individual locations across the country, through deals in the interbank market, or through forward contracts, thereby ensuring that there are minimal open positions. In the Leisure Travel Outbound business, package prices are denominated partly in the functional currency of the Company, Indian Rupees (INR), and partly in foreign currencies. The portion of customer collection in foreign currencies, which is parked in Nostro bank accounts, is used to pay off vendor liabilities, denominated in foreign currencies, thereby creating a natural hedge. As a result, the risk related to foreign currency exchange rate fluctuation is insignificant.
(iii) Price Risk Exposure
The companyâs exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss. Since the company does not have material equity investments, the company does not have a material price risk exposure as of reporting period.
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Companyâs treasury maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the companyâs liquidity position (comprising the unused cash and bank balances along with temporary investments in fixed deposits and/ or liquid mutual funds) on the basis of expected cash flows.
(ii) Maturities of financial liabilities
The tables below analyse the companyâs financial liabilities into relevant maturity based on their contractual maturities for:
- all non-derivative financial liabilities, and
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(c) Other Related Parties with whom the Company had transactions during the year / period Fellow subsidiaries:
- HWIC Asia Fund
(d) Key Management personnel
Madhavan Menon Mahendra Kumar Sharma (upto December 31, 2015)
Mahesh Iyer Uday Khanna (upto September 1, 2015)
R. R. Kenkare Kishori Udeshi
Debasis Nandy Krishnan Ramchandran
Rajeev Kale Ramesh Savoor
Amit Madhan Nilesh Vikamsey (w.e.f. December 23, 2015)
Mona Cheriyan Sunil Mathur (w.e.f. December 23, 2015)
Abraham Alapatt Pravir Vohra (w.e.f. April 10, 2015)
Amit Parekh
Relatives of key management personnel: Lili Menon
Note 6: Share based payments Employee option plan/ Tradable Options Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -âThomas Cook Employees Stock Option Plan - 2007â. The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on March 23, 2007. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI)- (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant in 3 equal annual instalments on each of the anniversaries from the Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the Company has established a Thomas Cook Save As You Earn (SAYE), Scheme - 2010. The SAYE scheme has been approved by a Special Resolution passed on December 14, 2010. SAYE is a Monthly Savings Contribution Scheme available to all employees of Thomas Cook (India) Limited and its subsidiaries provided that they have completed at least 6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which gets deposited with a bank in a recurring deposit account carrying fixed rate of interest. At the end of 3 years, employees have the option to either purchase specific number of equity shares of Thomas Cook (India) Limited at the predetermined exercise price or withdraw the monthly savings contributions along with interest accrued. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The maximum number of options granted per participant per grant will not exceed 200,000 (Two Hundred Thousand) equity shares. The maximum number of equity shares that may be issued / transferred pursuant to the exercise of options granted under the SAYE scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with the Group. The options would vest only when an employee has completed the committed 36 monthly contributions. The exercise period would not be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called -âThomas Cook Employees Stock Option Plan - 2013â. The same has been approved by a Special Resolution passed by the Shareholders by a Postal Ballot on October 25, 2013. The Scheme is in accordance with the provisions of Securities and Exchange Board of India (SEBI) - (Employee Stock Option Scheme and employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is in accordance with the guidelines issued by SEBI.
The objectives of this plan are:
a) to reward the Senior Employees of the Company for their performance
b) to motivate them to contribute to the growth and profitability of the Company and
c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on the basis of their performance and other eligibility criteria. Each option will entitle the participant to one equity share of Thomas Cook (India) Limited. The unvested options shall vest with the participant after 4 years but not later than 7 years from the date of grant of such options. Vesting of options would be subject to continued employment with the Company and certain performance parameters. The attainment of such performance parameters would be a mandatory condition for vesting of options as determined by the Recruitment & Remuneration Committee from time to time.
Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme 2012 - (âSHRIL ESOS 2012â)
The purpose of the ESOS is to provide the employees with an additional incentive in the form of Options to receive the equity shares of the Company at a future date. The ESOS is aimed at further motivating and retaining the employees and thereby increasing the profitability of the Company.
Vesting Schedule :
Grant I dated 24th January 2013 :
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 3 tranches which is 40%, 30%, 30% on each of the anniversaries from the Grant Date.
Grant II dated 30th July 2014 :
Each option will entitle the participant to one equity share. The unvested options shall vest with the participant in 4 tranches which is 25%, 25%, 25%, 25% on each of the anniversaries from the Grant Date.
Grant Date means the date on which the Options are granted to the eligible employees by the Company/Committee under the Scheme.
Exercise Price :
Exercise price shall not be less than the par value of the Equity Shares of the Company and shall not be more than the price prescribed under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as defined in the Guidelines), whichever is more.
- The Exercise price of INR 96.00 for Grant I was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 24th January 2013.
- The Exercise price of INR 130.15 for Grant II was fixed by the Board of Directors of Sterling Holiday Resorts (India) Limited at its meeting held on 30th July 2014.
- As per clause 15.3.2 of the Composite Scheme of Arrangement and Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook (India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the companyâs schemes and Stock Options which had been granted but not exercised as of the Record Date, by such SHRIL employees shall lapse and in lieu of the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100 options of SHRIL. The revised Exercise Price for Grant I was INR 80.00 and for Grant II was INR 108.46. Subject to the terms of the Scheme and SEBI ESOP Guidelines, the option holder will have a period of 5 years from the date of which the Options have vested, within which the vested options can be exercised.
The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. The expected volatility was determined based on the volatility of the equity share for the period of one year prior to issue of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.
Modification of share based payment:
In the course of business combination effective from 18th August 2015 as per the court scheme, under which Sterling was merged with Thomas Cook Insurance services, Thomas Cook India limited had replaced the erstwhile ESOS scheme of sterling by issuing shares from its share capital. Such modification of share based payment arrangements are accounted for as per Ind AS 102.
Expenses/shares option outstanding account arising from share based payment transactions
Total expenses arising from share-based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:
Note 7: First-time adoption of Ind AS
These are the companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the companyâs date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Previous GAAP or Indian GAAP). An explanation of how the transition from Previous GAAP to Ind AS has affected the companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exemptions applied in the transition from Previous GAAP to Ind AS. A.1 Ind AS optional exemptions
(a) Deemed cost for property, plant and equipment and intangible assets
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
(b) Share-based payment transaction
The Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transition to Ind AS.
(c) Investment in Subsidiaries
âInd AS 101 permits a first time adopter to measure itâs investment, at the date of transition, at cost determined in accordance with Ind AS 27, or deemed cost, The deemed cost of such investment shall be itâs fair value at the Companyâs date of transition to Ind AS, or previous GAAP carrying amount at that date.
The Company has elected to measure its investment in subsidiaries at the previous GAAP carrying amount as its deemed cost on the transition date.â
A2. Ind AS mandatory exceptions (a) Estimates
âAn entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with Previous GAAP.â
B: Reconciliations between Previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
Notes to the Reconciliations Note 1: Security Deposits
Under the previous GAAP, interest free lease deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by INR 347.4 as at 31 March 2016 (1 April 2015 - INR 865.0). The prepaid rent increased by INR 314.3 as at 31 March 2016 (1 April 2015 - INR 730.9). Total equity as on 1 April 2015 decreased by INR 134.1 due to amortisation of the prepaid rent and notional interest income recognised on security deposits. The profit for the year ended 31 March 2016 increased by INR 33.1 due to the notional interest income of INR 347.4 recognised on security deposits which is partially off-set by amortisation of the prepaid rent of INR 314.3. Consequently, total equity as at 31 March 2016 increased by INR 101.0.
(i) Under the previous GAAP, the cost of equity-settled employee share-based plan was recognised using the intrinsic value method. Under Ind AS, the cost of equity-settled share-based plan is recognised based on fair value of options as on the grant date. Consequently, the amount recognised in share option outstanding account increased by INR 274.1 as at 31 March 2016 with corresponding decrease in the profit for the year ended 31st March 2016 by INR 274.1. Similary share option outstanding account increased by INR 36.4 as at 1 April 2015 with corresponding decrease in retained earning by INR 36.4, leading to no impact on total equity as at 1 April 2015.
(ii) Under the previous GAAP, ESOP expense on account of issue of share-based payment plans by an entity to employees of its subsidiaries, was taken by the parent itself due to lack of specific guidance. Under Ind AS, cost of share based payment plans issued to the employees of the subsidiary is to be recognised by the entity receiving services from the concerned employees. The entity issuing the share based payment plan will recognise the cost as an investment. Due to this adjustment, total equity increased by INR 165.6 (1 April 2015 INR 122.7 ) with corresponding increase in investment in subsidiary by INR 165.6 (1 April 2015 INR 122.7).
(iii) Consequent to ESOPs issued in replacement of ESOPs of sterling in the course of business combination, an incremental cost has been booked as per Ind AS 102, which is the difference in the fair values of the options issued as on the effective date and its fair value as on 1 April 2014, the appointed date. There is no specific guidance for this in Indian GAAP. Due to this adjustment, ESOP cost has increased by INR 257.4, investment in subsidiary by INR 43.9 and corresponding increase in share option outstanding account by INR 301.3 as at March 2016 (1 April 2015- investment in subsidiary increased by INR 72.7 and corresponding increase in share option outstanding account by INR 72.7).
(iv) Consequent to above, profit for the year / retained earning ended 31 March 2016 decreased by INR 531.5 (INR 36.4), investment in subsidiary as at 31 March 2016 increased by INR 209.5 (1 April 2015 INR 195.4) and share option outstanding account increased by INR 741.0 (1 April 2015 INR 231.8). Hence, total equity and investment as at 31 March 2016 increased by INR 404.9 (1 April 2015 INR 195.4).
Note 3: Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2016 increased by INR 20.3 with corresponding decrease in other comprehensive income by INR 20.3. Hence there is no impact on the total equity as at 31 March 2016.
Note 4: Lease rent Straight lining
Ind AS 19 mandates straight lining of lease rental payments, if the escalation rate is not in line with the general inflation rate. Under the previous GAAP, there was an option not to straight line which was availed by the company. Consequently, rent equalisation reserve has been created as on 1 April 2015 with corresponding decrease in total equity of INR 1,482.5. Rent equalisation reserve is subsequently reversed by INR 524.9 as at 31 March 2016 with a corresponding decrease in rent expense by INR 524.9. Consequently, total equity as at 31 March 2016 has decreased by INR 957.6.
Note 5: Fair valuation of derivatives
Under the previous GAAP, premium or discount on forward contracts were to be amortised over the period of the contract and the outstanding forward contracts were restated at the prevailing rate at each reporting date. Under Ind AS 109, derivatives are to be revalued at Fair value at each reporting date. Consequently, profit for the year ended March 31, 2016 increased by INR 62.7.
Note 6: Sterling merger adjustment:
âThe Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited (ââTCISILââ) & Sterling Holiday Resorts (India) Limited (Sterling) had at their meetings held on 7 February 2014 approved a composite scheme of arrangement and amalgamation (Scheme) pursuant to which there was (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company.
Pursuant to the scheme, (i) 116 equity shares of paid up value INR 1/- each of the Company were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid up value of INR 10/- in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company of paid up value of INR 1/- each were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid value of INR 10/- in consideration of the amalgamation of residual Sterling into the Company.
The Honâble High Court of Madras sanctioned the Scheme of Sterling on 13 April 2015, while the Honâble High Court of Bombay sanctioned the Scheme of the Company and TCISIL on 2 July 2015. The High Court Order was filed with the Registrar of Companies, Mumbai on 18 August 2015 and thus, the scheme is effective from 1 April 2014 (Appointed date).
After obtaining statutory approvals, the Company completed the process of allotment of 48,657,929 equity shares of INR 1/- each to the shareholders of Sterling in pursuance of the Scheme on 3 September 2015 as per the above swap ratio.
Subsequent to Sterlingâs demerger into TCISIL as per court approved scheme, TCISILâs name has been changed to Sterling Holidays Resorts Limited (ââSHRLââ) with effect from 1 September 2015.
In terms of Scheme, all the assets and liabilities of residual Sterling are transferred to and vested in the Company and recorded at their respective fair values as determined by Board of Directors of the Company.
The difference, between the fair value of net assets of residual Sterling transferred to the Company and recorded by the Company pursuant to the order of the jurisdictional High Court(s) over the face value of equity shares allotted by the Company has been debited to Goodwill Account.
Pursuant to the scheme becoming effective, net assets of residual Sterling amounting to INR 25.3 as on 1 April 2014 have been taken over and Goodwill of INR 446.3 has been recorded after giving effect to the scheme. In the previous GAAP, the accounting of the scheme was done on the effective date i.e. 18 August 2015, however in pursuance of the court order the accounting in these financial statement has been done on the appointed date i.e. 1 April 2014.
Note 7: Goodwill amortisation
Under the previous GAAP, Goodwill recognised on the acquisition of the residual business of Sterling was amortised over a period of five years. Under Ind AS, Goodwill is considered not to have a definite determinable useful life and hence cannot be amortised and only tested for impairment. Due to this adjustment, profit and goodwill has increased by INR 178.8 for the year ended 31 Mach 2016.
Note 8: Debt issue expenses
Under the previous GAAP, Debt issue expenses were netted off against securities premium. Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Hence total equity as at 31 March 2016 increased by INR 79.8 (as on 1 April 2015 by INR 38.9) with corresponding decrease in debenture liability as at 31 March 2016 by INR 40.9 (as on 1 April 2015 of INR 38.9). The amortisation of debt issue expense for the year ended 31 March 2016 is INR 18.3.
Note 9: Fair valuation of guarantee:
Corporate guarantees given for securing loan taken by subsidiaries have been fair valued and shown as financial liabilities. Under the previous GAAP, these were to be disclosed as an off balance sheet item which have now been brought to books as required by Ind AS. As a result, Guarantee liability as on 31 March 2016 has been shown at INR 376.2 (1 April 2015 INR Nil) with corresponding receivable from subsidiaries of INR 376.2 (1 April 2015 INR Nil). There is no impact on total equity as at 31 March 2016 and 1 April 2015.
Note 10: Dividend on Non Convertible Redeemable Preference Share Capital (âNon Convertible Redeemable Preference Sharesâ)
Under the previous GAAP, Non Convertible Redeemable Preference Shares were considered as equity, dividend and dividend distribution tax on Non Convertible Redeemable Preference Shares was accounted as appropriation from Surplus of Profit and Loss. Under Ind AS, Non Convertible Redeemable Preference Shares is considered as liability, dividend is considered as finance cost and dividend distribution tax is considered as current tax expense. Accordingly, total equity as at 31 March 2016 has reduced by INR 12,500.0, being the Non Convertible Redeemable Preference Shares amount. There is no impact on total equity as at 31 March 2016 in relaton to dividend and dividend distribution tax, however profit after tax has decreased by INR 426.3 for the year ended 31 March 2016.
Note 11: Revenue recognition
Under the previous GAAP, âSigning bonusâ on contracts with Amadeus were recorded on a straight line basis over the contract period. Under Ind AS , it is now being recorded based on performance. Consequently, the profit for the year ended 31st March 2016 has decreased by INR 25.8 and the equity as at 1 April 2015 has increased by INR 25.8.
Note 12: Provision for Dividend on equity shares and Dividend distribution tax
As per Ind AS, provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity. Hence the proposed dividend provided under I GAAP has been reversed due to pendancy of shareholders approval.
Note 13: Deferred Tax
Under Ind AS deferred tax has been recognised on the adjustments made on transition to Ind AS.
Note 14: Retained Earnings
Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustment.
Note 15: Grossing up
Note 16: Bank overdraft
For the purpose of cash flow statement, cash and cash equivalent includes bank overdraft.
(e) Information concerning the classification of securities
Options granted to employees under the ESOP Option Plan are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 32.
Note 8: Merger of Sterling Holiday Resorts (India) Limited
The Board of Directors of the Company, Thomas Cook Insurance Services (India) Limited (ââTCISILââ) & Sterling Holiday Resorts (India) Limited (Sterling) had at their meetings held on 7 February 2014 approved a composite scheme of arrangement and amalgamation (Scheme) pursuant to which there was (i) a demerger of the resort and timeshare business from Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the Company.
Pursuant to the scheme, (i) 116 equity shares of paid up value INR 1/- each of the Company were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid up value of INR 10/- in consideration of the demerger of the resort and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the Company of paid up value of INR 1/- each were to be issued to the shareholders of Sterling for every 100 equity shares held in Sterling of paid value of INR 10/- in consideration of the amalgamation of residual Sterling into the Company.
The Honâble High Court of Madras sanctioned the Scheme of Sterling on 13 April 2015, while the Honâble High Court of Bombay sanctioned the Scheme of the Company and TCISIL on 2 July 2015. The High Court Order was filed with the Registrar of Companies, Mumbai on 18 August 2015 and thus, the scheme is effective from 1 April 2014 (Appointed date).
After obtaining statutory approvals, the Company completed the process of allotment of 48,657,929 equity shares of Re. 1/- each to the shareholders of Sterling in pursuance of the Scheme on 3 September 2015 as per the above swap ratio.
Subsequent to Sterlingâs demerger into TCISIL as per court approved scheme, TCISILâs name has been changed to Sterling Holidays Resorts Limited (ââSHRLââ) with effect from 1 September 2015.
In terms of Scheme, all the assets and liabilities of residual Sterling are transferred to and vested in the Company and recorded at their respective fair values as determined by Board of Directors of the Company.
The difference, between the fair value of net assets of residual Sterling transferred to the Company and recorded by the Company pursuant to the order of the jurisdictional High Court(s) over the face value of equity shares allotted by the Company has been debited to Goodwill Account.
Pursuant to the scheme becoming effective, net assets of residual Sterling amounting to INR 25.3 as on 1 April 2014 have been taken over and Goodwill of INR 446.3 has been recorded after giving effect to the scheme.â
Operating segments are reported in a manner consistent with the internal reporting provided to the CODM of the Company. The Company while presenting the consolidated financial statements has disclosed the segment information as required under Indian Accounting Standard 108 âOperating Segmentsâ.
Note 9: On 22 December 2015, Quess Corp Limited (âQuessâ) issued to its shareholders 2,560,000 Equity Shares of Rs. 10 each on rights basis at an issue price of Rs 10. Consequent to the Companyâs renunciation of its rights in the rights issue, as approved by the shareholders by an overwhelming majority at their meeting held on / postal ballot, the Companyâs shareholding in Quess has reduced to 69.55%. Further, Quess has on 5 January 2016 issued 85,001,292 Equity Shares of Rs. 10 each as a bonus issue (in the ratio of 3:1) to the existing shareholders of Quess.
Note 10: During the previous year, the Company along with its subsidiary Travel Corporation (India) Limited acquired a 100% stake in SOTC Travel Services Private Limited (âformerly known as Kuoni Travel India Private Limitedâ) by purchasing 9,713,050 Equity Shares of Rs. 10 each fully paid up for a consideration of INR 32,000.0.
Note 11: During the year, the company has acquired sub subsidiary SITA Travels Private Limited from its subsidiary SOTC Travel Services Private Limited by issuing consideration of INR 1.0.
Note 12: Disclosures pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015
Loans and advances in the nature of loans to subsidiary
Note 13: Recent accounting pronouncements
Standards issued but not yet effective:
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ. The amendments are applicable to the company from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The company is evaluating the requirements of the amendment and the effect on the financial statements is not likely to be significant.
Mar 31, 2016
1 General Information:
Thomas Cook (India) Limited (the "Company") is a Public Limited Company
listed on the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE). The Company is engaged in diversified businesses of
Travel and Travel related Businesses, working as Travel Agent and Tour
Operator. The Company is also engaged as an Authorised Foreign Exchange
Dealer.
2 Employees Stock Option Schemes
Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -
"Thomas Cook Employees Stock Option Plan - 2007". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on March 23, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are:
(a) Motivate talent in the organization with a view to achieve long
term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual instalments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on December 14, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook
Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of Thomas
Cook (India) Limited at the predetermined exercise price or withdraw
the monthly savings contributions along with interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
equity shares. The maximum number of equity shares that may be issued /
transferred pursuant to the exercise of options granted under the SAYE
scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2013". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on October 25, 2013.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
in accordance with the guidelines issued by SEBI.
The objectives of this plan are:
a) to reward the Senior Employees of the Company for their performance
b) to motivate them to contribute to the growth and profitability of
the Company and
c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
after 4 years but not later than 7 years from the date of grant of such
options. Vesting of options would be subject to continued employment
with the Company and certain performance parameters. The attainment of
such performance parameters would be a mandatory condition for vesting
of options as determined by the Recruitment & Remuneration Committee
from time to time.
During the year ended March 31, 2016, a total of 261,473
(Previousperiod-1,205,213) and Nil (Previousperiod434,717) equity
shares of Re. 1 each were issued and allotted under the Thomas Cook
Employee Stock Option Plan - 2007 and Thomas Cook Save As You Earn
(SAYE) -2010 respectively. Consequently, the issued and paid up Equity
Share Capital has increased.
The Company has granted share options under the Company''s Employees
Stock Option Plan and share options outstanding as at March 31, 2016
are 6,187,658 (Previous period - 5,565,036). Of these 3,973 (Previous
period - 3,973) option have vested in 2008, 214,347 (Previous period -
214,347) have vested in 2009, 214,347 (Previous period - 214,347) have
vested in 2010, 96,833 (Previous period - 96,833) have vested in 2011,
23,335 (Previous period - 64,005) have vested in 2012, Nil (Previous
period - Nil) have vested in 2013, Nil (Previous period - 203,620) have
vested in 2014, 219,110 (Previousperiod - 282,737) have vested in 2015,
745,300 (Previousperiod - 282,736) will vest in 2016, 517,500 (Previous
period - Nil) will vest in 2017, 517,500 (Previous period - Nil) will
vest in 2018 and 3,635,413 (Previous period - 4,202,438) will vest
after 2017 but not later than 2020.
Sterling Holiday Resorts (India) Limited Employee Stock Options Scheme
2012 - ("SHRIL ESOS 2012")
The purpose of the ESOS is to provide the employees with an additional
incentive in the form of Options to receive the equity shares of the
Company at a future date. The ESOS is aimed at further motivating and
retaining the employees and thereby increasing the profitability of the
Company.
Vesting Schedule :
Grant I dated 24th January 2013 :
Each option will entitle the participant to one equity share. The
unvested options shall vest with the participant in 3 tranches which is
40%,30%,30% on each of the anniversaries from the Grant Date.
Grant II dated 30th July 2014 :
Each option will entitle the participant to one equity share. The
unvested options shall vest with the participant in 4 tranches which is
25%,25%,25%,25% on each of the anniversaries from the Grant Date.
Grant Date means the date on which the Options are granted to the
eligible employees by the Company/Committee under the Scheme. Exercise
Price :
Exercise price shall not be less than the par value of the Equity
Shares of the Company and shall not be more than the price prescribed
under Chapter VII of SEBI ICDR Regulation 2009 or the Market price (as
defined in the Guidelines), whichever is more.
- The Exercise price of '' 96.00 for Grant I was fixed by the Board of
Directors of Sterling Holiday Resorts (India) Limited at its meeting
held on 24th January 2013.
- The Exercise price of Rs.130.15 for Grant II was fixed by the Board
of Directors of Sterling Holiday Resorts (India) Limited at its meeting
held on 30th July 2014
- As per clause 15.3.2 of the Composite Scheme of Arrangement and
Amalgamation between Sterling Holiday Resorts (India) Ltd. (SHRIL) and
Thomas Cook Insurance Services (India) Ltd (TCISIL), and Thomas Cook
(India) Ltd. (TCIL) the SHRIL ESOS 2012 became a part of the company''s
schemes and Stock Options which had been granted but not exercised as
of the Record Date, by such SHRIL employees shall lapse and in lieu of
the Lapsed Options of SHRIL, TCIL shall grant 120 options for every 100
options of SHRIL. The revised Exercise Price for Grant I was Rs.80.00
and for Grant II was 108.46. Subject to the terms of the Scheme and
SEBI ESOP Guidelines, the option holder will have a period of 5 years
from the date of which the Options have vested, within which the vested
options can be exercised.
3 Related Party Disclosures
(A) Enterprises where control exists
(i) Holding Company Fairbridge Capital (Mauritius) Limited, Mauritius
("FCML") holds 67.82% of Equity Shares of TCIL. FCML is wholly owned
and controlled by Fairfax Financial Holdings Limited, Canada, the
ultimate holding company.
(ii) Subsidiary Companies Travel Corporation (India) Limited
Indian Horizon Marketing Services Limited (Formerly known as ''Indian
Horizon Travel and Tours Limited'')
Thomas Cook Tours Limited TC Visa Services (India) Limited
Jardin Travel Solutions Limited (w.e.f. September 1, 2015)
Borderless Travel Services Limited (w.e.f. August 25, 2015)
Thomas Cook (Mauritius) Holding Company Limited
Thomas Cook (Mauritius) Operations Company Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited (upto December 28, 2015)
Thomas Cook Lanka (Private) Limited
Luxe Asia Private Limited (w.e.f. August 1, 2015)
Quess Corp Limited MFX Infotech Private Limited Coachieve Solutions
Private Limited Aravon Services Private Limited Quess Corp (USA) Inc
Quess (Philippines) Corp (''formerly known as Magna IKYA Infotech Inc,
Philippines'')
Quess Corp Holdings PTE. LTD.
IKYA Business Services Private Limited Quess Global (Malaysia) SDN.
BHD.
MFXchange Holdings Inc Canada Brainhunter Systems Limited, Canada
MFXchange US Inc MFXchange (Ireland) Ltd Mindwire Systems Limited
Brainhunter Companies, LLC USA Brainhunter Companies, Canada Inc.
Sterling Holiday Resorts Limited (formerly known as ''Thomas Cook
Insurance Services (India) Limited'')
Sterling Holidays (Ooty) Limited
Sterling Holidays (Kodaikannal) Limited
Nature Trails Resorts Private Limited (w.e.f. March 15, 2016)
SOTC Travel Services Private Limited (formerly known as ''Kuoni Travel
(India) Private Limited'')* Sita Incoming (India) Private Limited*
Sita Holidays Resorts Private Limited*
Sita Holidays (India) Private Limited*
Sita Destination Management Private Limited*
Sita Beach Resorts Private Limited*
Sita Travels Private Limited*
Sita Travels & Tours Private Limited*
Distant Frontiers Tours Private Limited*
KAT Management Consulting (Shanghai) Co. Limited*
Sita World Travel Lanka Private Limited*
Sita World Travel (Nepal) Private Limited*
Horizon Travel Holdings (Singapore) Private Limited (w.e.f. August 19,
2015)
Luxe Asia Travel China Limited (formerly known as ''Horizon Travel
Holdings (Hongkong) Private Limited (w.e.f. September 10, 2015)
Kuoni Travel (China) Limited (w.e.f. November 1, 2015)
* w.e.f. January 1, 2016
Other entities where relationship exists
Styracorp Management Services IME Consultancy
(B) Other Related Parties with whom the Company had transactions during
the year / period
(i) Fellow Subsidiaries Fairbridge Capital Private Limited
Hamblin Watsa Investment Counsel Limited
(ii) Key Management Personnel Madhavan Menon
R. R. Kenkare Debasis Nandy Mahesh Iyer Rajeev Kale Amit Madhan Mona
Cheriyan Abraham Alapatt
Amit Parekh (w.e.f. March 1, 2016)
(iii) Relatives of Key Lili Menon
4 Micro, Small and Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Company
owes dues, which are outstanding as at March 31, 2016. This information
as required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
5 Derivative Instruments
The Company uses Forward Exchange Contracts to hedge against its
foreign currency exposures related to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
6 Merger of Sterling Holiday Resorts (India) Limited
The Board of Directors of the Company, Thomas Cook Insurance Services
(India) Limited (""TCISIL"") & Sterling Holiday Resorts (India) Limited
(Sterling) had at their meetings held on February 7, 2014 approved a
composite scheme of arrangement and amalgamation (Scheme) pursuant to
which there was (i) a demerger of the resort and timeshare business
from Sterling to TCISIL, and (ii) amalgamation of residual Sterling
into the Company.
Pursuant to the scheme, (i) 116 equity shares of paid up value Rs.1
each of the Company were to be issued to the shareholders of Sterling
for every 100 equity shares held in Sterling of paid up value of Rs.10
in consideration of the demerger of the resort and timeshare business
of Sterling from Sterling to TCISIL; and (ii) 4 equity shares of the
Company of paid up value of Rs.1 each were to be issued to the
shareholders of Sterling for every 100 equity shares held in Sterling
of paid value of Rs.10 in consideration of the amalgamation of residual
Sterling into the Company.
The Hon''ble High Court of Madras sanctioned the Scheme of Sterling on
April 13, 2015, while the Hon''ble High Court of Bombay sanctioned the
Scheme of the Company and TCISIL on July 2, 2015. The High Court Order
was filed with the Registrar of Companies, Mumbai on August 18, 2015
and thus, the scheme is effective from April 1, 2014 (Appointed date).
After obtaining statutory approvals, the Company completed the process
of allotment of 48,657,929 equity shares of Rs.1/- each to the
shareholders of Sterling in pursuance of the Scheme on September 3,
2015 as per the above swap ratio.
Subsequent to Sterling''s demerger into TCISIL as per court approved
scheme, TCISIL''s name has been changed to Sterling Holidays Resorts
Limited (""SHRL"")with effect from September 1, 2015.
In terms of Scheme, all the assets and liabilities of residual Sterling
are transferred to and vested in the Company and recorded at their
respective fair values as determined by Board of Directors of the
Company.
The difference, between the fair value of net assets of residual
Sterling transferred to the Company and recorded by the Company
pursuant to the order of the jurisdictional High Court(s) over the face
value of equity shares allotted by the Company has been debited to
Goodwill Account which is amortized over period of 5 years.
Pursuant to the scheme becoming effective, net assets of residual
Sterling amounting to Rs.2,526,936 as on April 1, 2014 have been taken
over and Goodwill of Rs.44,633,089 has been recorded after giving
effect to the scheme.
7 Managerial remuneration aggregating to Rs.48,679,659 paid for the
year ended March 31, 2016, exceeded the permissible limit as prescribed
under Schedule V of the Companies'' Act 2013. The Company has made an
application to the Central Government for payment of remuneration for
five years, for which approval is yet to be received.
Managerial remuneration aggregating to Rs.45,371,443/- paid for the
period ended March 31, 2015, exceeded the permissible limit as
prescribed under Schedule V of the Companies'' Act 2013 (which
corresponds to Schedule XIII of the Companies'' Act, 1956). The Company
has made an application to the Central Government of India for such
excess remuneration paid, approval of which is awaited.
8 Pursuant to the enactment of Companies Act, 2013, the Company has,
effective April 1, 2015, reviewed and revised the estimated useful
lives of its fixed assets, in accordance with the provisions of
Schedule II of the Act and will depreciate the carrying amount of the
asset as on April 1, 2015, over the remaining useful life of the asset.
Additional depreciation charge on account of revised estimated useful
lives of fixed assets for year ended March 31, 2016 is Rs.54,574,008.
Where the remaining useful life of an asset on April 1, 2015 was nil,
the carrying amount of the asset after retaining the residual value was
recognised in the opening balance of retained earnings (net of Deferred
Tax) to the tune of Rs.37,626,502.
9 On December 22, 2015, Quess Corp Limited ("Quess") issued to its
shareholders 2,560,000 Equity Shares of Rs.10 each on rights basis at
an issue price of Rs.10. Consequent to the Company''s renunciation of
its rights in the rights issue, as approved by the shareholders by an
overwhelming majority at their meeting held on / postal ballot, The
Company''s shareholding in Quess has reduced to 69.55%. Further, Quess
has on January 5, 2016 issued 8,50,01,292 Equity Shares of Rs.10 each
as a bonus issue (In the ratio of 3:1) to the existing shareholders of
Quess.
10 The Company along with its subsidiary Travel Corporation (India)
Limited acquired a 100% stake in SOTC Travel Services Private Limited
(''formerly known as Kuoni Travel India Private Limited'') by purchasing
9,713,050 Equity Shares of Rs.10 each fully paid up for a consideration
of Rs.3,200,000,000.
11 Employees of the Company and other parties misappropriated assets
aggregating to Rs.4,277,774 during the year. The Company has recovered
Rs.1,499,540 so far. The cases are under investigation and the Company
has taken steps for recovering the balance amount.
12 Disclosures pursuant to the Regulation 34(3) read with para A of
Schedule V to SEBI Listing Regulations, 2015
Loans and advances in the nature of loans to subsidiary
13 In the previous period the Company had changed its financial year
closing date from December 31 to March 31. Accordingly, the figures for
the previous period are for the fifteen month period from January 1,
2014 to March 31, 2015 and are therefore not comparable with those of
the current year which is twelve months from April 1, 2015 to March 31,
2016.
14 Previous period figures have been regrouped / reclassified wherever
necessary to conform to this year''s classification.
Mar 31, 2015
1 General Information:
Thomas Cook (India) Limited (the "Company") is a Public Limited Company
listed on the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE). The Company is engaged in diversified businesses
primarily working as an Authorised Foreign Exchange Dealer. The Company
is also engaged in Tour and Travel Business and working as Travel Agent
and Tour Operator.
2 Rights, preferences and restrictions attached to shares
Equity Shares:-The Company has one class of equity shares having a par
value of Re. 1 per share. Each shareholder is eligible for one vote per
share held. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting, except in case of interim dividend. In the event of
liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution to preference
shareholders of all preferential amounts, in proportion to their
shareholding.
CCPS:- 6,250,000 CCPS of Rs. 10 each were allotted on March 13, 2014 to
Fairbridge Capital (Mauritius) Limited at a price of Rs. 800 each which
includes a premium of Rs. 790 per share in order to partly fund the
investment made by Thomas Cook Insurance Services (India) Limited in
Sterling Holiday Resorts (India) Limited. [Refer Note 42]. The CCPS
would be entitled to a dividend of 0.001% per annum.
During the period, on March 9, 2015, out of total 6,250,000 CCPS,
1,827,000 of Rs. 10 each were converted into 18,270,000 equity shares
of Re.1 each.
3 Terms of securities convertible into Equity Shares
Class B & C Cumulative Convertible / Redeemable Preference Shares :-
Pursuant to the execution of the Consent terms dated February 5, 2014
with LKP Finance Limited and the Award dated February 20, 2014 issued
by the Hon'ble Arbitral Tribunal, the Board of Directors, vide its
resolution dated April 25, 2014, allotted 5,140,000 equity shares of
Re. 1 each upon conversion of the 319,765 Class 'B' 0.001% Cumulative
Convertible / Redeemable Preference Shares of Rs. 10 each and 271,800
Class 'C' 0.001% Cumulative Convertible / Redeemable Preference Shares
of Rs. 10 each.
CCPS :-
The CCPS shall be compulsorily convertible into equity shares of the
Company within a period of 18 months from the date of allotment of the
CCPS. Each CCPS shall be convertible into 10 Equity Shares of the
Company having face value of Re. 1 each at a premium of Rs. 79 each so
that the 6,250,000 CCPS shall convert into 62,500,000 Equity Shares.
The CCPS can be converted into Equity Shares of the Company at any time
by the holder of the CCPS, in one or more tranches, prior to expiry of
18 months from the date of allotment of the CCPS. The CCPS shall be
converted into equity shares in accordance with the provisions of
applicable law, including minimum public shareholding requirements.
Amount in Rupees
4 Contingent Liabilities As at As at
March 31, December 31,
2015 2013
(i) Claims against the Company not
acknowledged as debts:
- Demand from Bombay Electricity 1,961,083 1,961,083
Supply and Transport (BEST) for
Electricity charges
- Disputed claims made by clients 2,323,519 2,633,519
- Disputed Labour law suits 300,000 -
(ii) Disputed Income Tax demands 140,703,031 24,202,876
(iii) Disputed Service Tax demands 27,619,935 3,140,439,678
(iv) Disputed Demand for increase in 58,918,335 53,750,060
rent raised by Brihanmumbai Municipal
Corporation
Notes: Future cash outflows in respect of (i) to (iv) above are
determinable only on receipt of judgments/decisions pending with
various forums/ authorities.
5. Employees Stock Option Schemes
Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -
"Thomas Cook Employees Stock Option Plan - 2007". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on March 23, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are:
(a) Motivate talent in the organization with a view to achieve long
term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual instalments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on December 14, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook
Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of Thomas
Cook (India) Limited at the predetermined exercise price or withdraw
the monthly savings contributions along with interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
equity shares. The maximum number of equity shares that may be issued /
transferred pursuant to the exercise of options granted under the SAYE
scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2013". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on October 25, 2013.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
in accordance with the guidelines issued by SEBI.
The objectives of this plan are:
a) to reward the Senior Employees of the Company for their performance
b) to motivate them to contribute to the growth and profitability of
the Company and
c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
after 4 years but not later than 7 years from the date of grant of such
options. Vesting of options would be subject to continued employment
with the Company and certain performance parameters. The attainment of
such performance parameters would be a mandatory condition for vesting
of options as determined by the Recruitment & Remuneration Committee
from time to time.
During the period ended March 31, 2015, a total of 1,205,213 (Previous
Year -142,597) and 434,717 (Previous Year Nil) equity shares of Re. 1
each were issued and allotted under the Thomas Cook Employee Stock
Option Plan - 2007 and Thomas Cook Save As You Earn (SAYE) -2010
respectively. Consequently, the issued and paid up Equity Share
Capital has increased to 272,730,827 shares.
The Company has granted share options under the Company's Employees
Stock Option Plan and share options outstanding as at March 31, 2015
are 5,565,036 (Previous Year - 7,508,101). Of these 3,973 (Previous
Year - 3,973) option have vested in 2008, 214,347 (Previous Year -
214,347) have vested in 2009, 214,347 (Previous Year - 197,680) have
vested in 2010, 96,833 (Previous Year - 102,205) have vested in 2011,
64,005 (Previous Year - 741,862) have vested in 2012, Nil (Previous
Year - 342,015) have vested in 2013, 203,620 (Previous Year -
1,000,915) have vested in 2014, 282,737 (Previous Year - 351,334) will
vest in 2015, 282,736 (Previous Year - 351,332) will vest in 2016 and
4,202,438 (Previous Year - 4,202,438) will vest after 2017 but not
later than 2020.
6 Related Party Disclosures
(A) Enterprises where control exists
(i) Holding Company Fairbridge Capital (Mauritius) Limited,
Mauritius ("FCML") holds 45.01% of Equity
Shares of TCIL and H Investments Limited
("HIL") holds 29.76% of Equity Shares of
TCIL. FCML and HIL are wholly owned
and controlled by Fairfax Financial
Holdings Limited, Canada, the ultimate
holding company.
(ii) Subsidiary Travel Corporation (India) Limited
Companies
Thomas Cook Insurance Services (India)
Limited
Indian Horizon Marketing Services Limited
(Formerly known as 'Indian Horizon Travel
and Tours Limited')
Thomas Cook Tours Limited
TC Visa Services (India) Limited
Thomas Cook (Mauritius) Holding Company
Limited
Thomas Cook (Mauritius) Operations Company
Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited
Thomas Cook Lanka (Private) Limited
Quess Corp Limited (Formerly known as
'IKYA Human Capital Solutions Limited'
(w.e.f May 14, 2013)
Avon Facility Management Services Limited
(merged with Quess Corp Limited effective
January 1, 2014)
Co-Achieve Solutions Private Limited
Magna Infotech Limited (merged with Quess
Corp Limited effective January 1,2014)
Hofincons Infotech & Industrial Services
Private Limited (merged with Quess Corp
effective July 1,2014)
MFX Infotech Private Limited
Brainhunter Systems Limited
Brainhunter Systems (Ottawa) Limited
Brainhunter Companies (Canada) Limited
Brainhunter Companies LLC (USA)
Magna Ikya Infotech Inc (Philippines)
Quesscorp Inc, USA (formerly known as
Magna Infotech Inc USA)
Sterling Holiday Resorts (India) Limited
(w.e.f September 3, 2014)
Sterling Holidays (Ooty) Limited (w.e.f
September 3, 2014)
Sterling Holidays Resorts (Kodaikannal)
Limited (w.e.f September 3, 2014)
(iii) Associate MFxchange Holdings Inc, Canada
enterprise
(B) Other Related Parties with whom the Company had transactions
during the period/year
(i) Fellow Fairfax (Barbados) International Corp.
Subsidiaries
Fairbridge Capital Private Limited
(ii) Key Management Madhavan Menon
Personnel
R. R. Kenkare
Debasis Nandy
Mahesh Iyer
Rajeev Kale
Amit Madhan
Mona Cheriyan (w.e.f August 25, 2014)
Madhav Pai (upto July 15, 2013)
Ambreesh Mahajan (upto December 16, 2013)
Vinayak K. Purohit (upto August 17, 2012)
Rakshit Desai (upto July 16, 2012)
(iii) Relatives of Lili Menon
Key Management
Personnel
7. Micro, Small and Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Company
owes dues, which are outstanding as at March 31, 2015. This information
as required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
8. Derivative Instruments
The Company uses Forward Exchange Contracts to hedge against its
foreign currency exposures related to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
9. Merger of Sterling Holiday Resorts (India) Limited
The Board of Directors of the Company, Thomas Cook Insurance Services
(India) Limited ("TCISIL") & Sterling Holiday Resorts (India) Limited
("Sterling") have at their meetings held on February 7, 2014 approved a
composite scheme of arrangement and amalgamation pursuant to which
there will be: (i) a demerger of the resort and timeshare business from
Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the
Company. Pursuant to the scheme, (i) 116 equity shares of the Company
will be issued to the shareholders of Sterling for every 100 equity
shares held in Sterling in consideration of the demerger of the resort
and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4
equity shares of the Company will be issued to the shareholders of
Sterling for every 100 equity shares held in Sterling in consideration
of the amalgamation of residual Sterling into the Company.
Appointed date for the composite scheme is April 1, 2014 and the same
is subject to regulatory approvals as deemed necessary.
Further, the Company had agreed to subscribe to 36,000,000 equity
shares of TCISIL, a wholly owned subsidiary of the Company, having face
value of Rs. 10 each for an aggregate consideration of Rs.
7,200,000,000 at a premium of Rs. 190 per share, of which 29,000,000
shares for an aggregate consideration of Rs. 5,800,000,000 including
premium of Rs. 5,510,000,000 have been subscribed to as on March 31,
2015.
TCISIL has utilised part of these funds for the acquisition of shares
of Sterling, as follows: (i) 20,650,000 under share subscription
agreement (ii) 17,045,534 from certain existing share holders of
Sterling (iii) 10,209 under an open offer in terms of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and
(iv) 11,863,334 shares under share purchase agreement. Accordingly,
TCISIL's stake in Sterling increased to 53.42% on September 3, 2014,
and as such, Sterling became a subsidiary of TCISIL in accordance with
Accounting Standard (AS) 21 issued by the ICAI.
Sterling's application for the composite scheme of arrangement and
amalgamation has been approved by the Honourable Madras High Court on
April 13 , 2015. However, up to the date of preparation of these
financial statements, the Company and TCISIL have not received the
order of the Honourable Bombay High Court and accordingly, the Scheme
is not yet effective. Hence, these financial statements have been
prepared without considering the effect of the Scheme.
10. Managerial remuneration aggregating to Rs. 45,371,443/- paid for the
period, exceeded the permissible limit as prescribed under Schedule V
of the Companies' Act 2013 (which corresponds to Schedule XIII of the
Companies' Act, 1956). The Company is in the process of making an
application to the Central Government of India, subject to the approval
of the shareholders for approval of such excess remuneration paid.
11. CCPS Issue
The Company issued and allotted 6,250,000 CCPS of Rs. 10 each on March
13, 2014 to Fairbridge Capital (Mauritius) Limited at a price of Rs.
800 each which includes a premium of Rs. 790 in order to partly fund
the investment made by TCISIL in Sterling. TCISIL issued 25,000,000
equity shares of Rs. 10 each at a premium of Rs. 190 to the Company.
12. Employees of the Company and other parties misappropriated assets
aggregating to Rs. 19,288,585 during the period. The Company has
recovered Rs.3,212,962 so far. The cases are under investigation and
the Company has taken steps for recovering the balance amount.
13. During the period, the Company has changed its financial year from
December 31 to March 31. Accordingly, the figures for the current
period are for the fifteen months period from January 1, 2014 to March
31,2015 and are therefore not comparable with those of the previous
year.
14. Previous year figures have been reclassified wherever necessary to
conform to this period's classification.
Dec 31, 2013
1 Contingent Liabilities As at As at
December 31,
2013 December 31, 2012
Contingent Liabilities
(i) Claims against the Company not
acknowledged as debts:
Demand from Bombay Electricity
Supply and Transport (BEST) for
Electricity charges 1,961,083 1,961,083
Disputed claims made by clients 2,633,519 2,633,519
(ii) Disputed Income Tax demands 24,202,876 47,097,990
(iii) Disputed Service Tax demands# 3,140,439,678 2,055,698,792
(iv) Disputed Demand for increase
in rent raised by Brihanmumbai
Municipal Corporation 53,750,060 49,615,440
Notes:
Future cash outflows in respect of (i) to (iv) above are determinable
only on receipt of judgments/decisions pending with various forums/
authorities.
* Disputed Service Tax demands include matters in respect of Outbound
Tours to the extent of Rs. 3,093,295,602. In this respect, the Central
Excise Service Tax Appellate Tribunal, New Delhi, vide its order dated
December 10, 2013, in case of the Company''s wholly owned subsidiary,
Travel Corporation (India) Limited, has ruled that Service Tax is not
applicable on Outbound Tours to the extent that services are rendered
abroad.
The said order is expected to hold good for the litigation of the
aforesaid issue of Service Tax on Outbound tours in case of the
Company, currently amounting to Rs. 3,093,295,602.
2 Employees Stock Option Schemes
Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called -
"Thomas Cook Employees Stock Option Plan - 2007". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on March 23, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long
term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual instalments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on December 14, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook
Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of Thomas
Cook (India) Limited at the predetermined exercise price or withdraw
the monthly savings contributions along with interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
equity shares. The maximum number of equity shares that may be issued /
transferred pursuant to the exercise of options granted under the SAYE
scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
Thomas Cook Employees Stock Option Plan -2013
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2013". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on October 25, 2013.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The exercise price is
in accordance with the guidelines issued by SEBI.
The objectives of this plan are :
(a) to reward the Senior Employees of the Company for their performance
(b) to motivate them to contribute to the growth and profitability of
the Company and
(c) to retain talent in the organization
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
after 4 years but not later than 7 years from the date of grant of such
options. Vesting of options would be subject to continued employment
with the Company and certain performance parameters. The attainment of
such performance parameters would be a mandatory condition for vesting
of options as determined by the Recruitment & Remuneration Committee
from time to time.
During the year ended December 31, 2013, a total of 142,597 (Previous
Year -1,151,332) equity shares of Rs. 1 each were issued and allotted
under the Thomas Cook Employee Stock Option Plan - 2007. Consequently,
the issued and paid up Equity Share Capital has increased to
247,680,897 shares.
The Company has granted share options under the Company''s Employees
Stock Option Plan and share options outstanding as at December 31, 2013
are 7,508,101 (Previous Year - 3,042,009). Of these 3,973 (Previous
Year - 58,140) option have vested in 2008, 214,347 (Previous Year -
330,180) have vested in 2009,197,680 (Previous Year - 330,180) have
vested in 2010,102,205 (Previous Year - 180,539) have vested in 2011,
741,862 (Previous Year - 748,701) have vested in 2012, 342,015
(Previous Year - 1,116,997) have vested in 2013,1,000,915 (Previous
Year - 277,272) will vest in 2014, 351,334 (Previous Year - Nil) will
vest in 2015, 351,332 (Previous Year - Nil) will vest in 2016 and
4,202,438 (Previous Year - Nil) will vest after 2017 but not later than
2020.
3 Related Party Disclosures
(A) Enterprises where control exists (i) Holding Company
Fairbridge Capital (Mauritius) Limited, Mauritius holds 74.96% of
Equity Shares of the Company. Fairbridge Capital (Mauritius) Limited
is a step down subsidiary of Fairfax Financial Holdings Limited, Canada
the Ultimate Holding Company.
(ii) Subsidiary Companies
Travel Corporation (India) Limited
Thomas Cook Insurance Services (India) Limited
Indian Horizon Travel and Tours Limited
Thomas Cook Tours Limited
TC Visa Services (India) Limited
Thomas Cook (Mauritius) Holding Company Limited
Thomas Cook (Mauritius) Operations Company Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited
Thomas Cook Lanka (Private) Limited (w.e.f August 1, 2012)
IKYA Human Capital Solutions Limited (w.e.f May 14, 2013)
Avon Facility Management Services Limited (w.e.f May 14, 2013)
Magna Infotech Limited (w.e.f May 14, 2013)
CoAchieve Solutions Private Limited (w.e.f May 14, 2013)
Magna IKYA Infotech Inc. (w.e.f May 28, 2013)
(B) Other Related Parties with whom the Company had transactions during
the year
(i) Fellow Subsidiaries Fairfax (Barbados) International Corp.
(ii) Key Management Personnel Madhavan Menon
R. R. Kenkare
Debasis Nandy
Mahesh Iyer
Rajeev Kale
Amit Madhan
Madhav Pai (upto July 15, 2013)
Ambreesh Mahajan (upto December 16, 2013)
Vinayak K. Purohit (upto August 17, 2012)
Rakshit Desai (upto July 16, 2012)
(iii) Relatives of Key Management Lili Menon Personnel
4 Micro, Small and Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Company
owes dues, which are outstanding as at December 31, 2013. This
information as required to be disclosed under the Micro, Small and
Medium Enterprises Development Act, 2006 has been determined to the
extent such parties have been identified on the basis of information
available with the Company. This has been relied upon by the auditors.
5 Institutional Placement Programme Issue
The Company issued and allotted 34,379,606 equity shares for cash at a
price of Rs. 53.50 per equity share (including securities premium of
Rs. 52.50 per equity share) aggregating to Rs. 1,839,308,921 by way of
an IPP, on May 7, 2013, under Chapter Vlll-A of the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009, as amended, with the conditions prescribed by SEBI,
vide its letters dated March 8,2013 and April 15,2013. Upon issue of
equity shares under the IPP on May 7, 2013, the promoter, Fairbridge
Capital (Mauritius) Limited''s shareholding in Thomas Cook (India)
Limited has reduced from 87.1% to 74.96% currently, in line with Clause
40A(ii)(d) of the Equity Listing Agreement.
6 Acquisition of IKYA
On May 14, 2013, the Company acquired 74.85% equity stake on a fully
diluted basis in IKYA comprising of 7,525,914 Equity Shares of Rs. 10
each fully paid-up, 3,529,672 0.005% Mandatorily Convertible Preference
Shares of Rs. 40 each fully paid-up (Tranche I), 1,873,333 0.005%
Mandatorily Convertible Preference Shares of Rs. 15 each fully paid-up
(Tranche II) and 7,717,912 0.001% Mandatorily Convertible Preference
Shares of Rs. 100 each fully paid-up for a total consideration of Rs.
2,563,185,705. On October 18, 2013, Tranche I and Tranche II Preference
Shares were converted into fully paid up 5,403,005 Equity Shares of Rs.
10 each. Accordingly, 12,928,919 fully paid-up Equity Shares of Rs. 10
each and 7,717,912 fully paid-up Mandatorily Convertible Preference
Shares of Rs. 100 each are held in IKYA representing 77.29% of the
total Paid up Capital as at the Balance Sheet date. Expenses related to
the acquisition amounted to Rs. 29,309,091 and have been included in
the cost of the Equity Shares held as at the Balance Sheet date.
7 Merger of Sterling Holiday Resorts (India) Limited
The Board of Directors of the Company, Thomas Cook Insurance Services
(India) Limited ("TCISIL") & Sterling Holiday Resorts (India) Limited
("Sterling") have at their meetings held on February 7, 2014 approved a
composite scheme of arrangement and amalgamation pursuant to which
there will be: (i) a demerger of the resort and timeshare business from
Sterling to TCISIL, and (ii) amalgamation of residual Sterling into the
Company. Pursuant to the scheme, (i) 116 equity shares of the Company
will be issued to the shareholders of Sterling for every 100 equity
shares held in Sterling in consideration of the demerger of the resort
and timeshare business of Sterling from Sterling to TCISIL; and (ii) 4
equity shares of the Company will be issued to the shareholders of
Sterling for every 100 equity shares held in Sterling in consideration
of the amalgamation of residual Sterling into the Company.
Further, the Company has agreed to subscribe to 36,000,000 equity
shares of Thomas Cook Insurance Services (India) Limited, a wholly
owned subsidiary of the Company, having face value of Rs. 10 each for
an aggregate consideration of Rs. 7,200,000,000 at a premium of Rs. 190
per share. TCISIL will be using such funds for acquisition of shares of
Sterling, including as follows: (i) subscription to 20,650,000 equity
shares of Sterling, (ii) purchase of upto 18,007,677 equity shares of
Sterling from certain existing shareholders, and (iii) an open offer
for 26% of the diluted share capital of Sterling, in terms of the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
In order to partly fund the investment proposed to be made by TCISIL in
Sterling, the parent of the Company, being Fairbridge Capital
(Mauritius) Limited has agreed to subscribe to compulsorily convertible
preference shares to comply with the provisions of the FDI Policy,
subject to receipt of applicable approvals and consents. Accordingly,
the Company has proposed to create, offer, issue and allot in one or
more tranches, on private placement and/or preferential basis, up to
6,250,000 compulsorily convertible preference shares of Rs. 10 each
(CCPS) at a price of Rs. 800 each which includes a premium of Rs. 790
per CCPS of the Company, each such CCPS being convertible into 10
equity shares of the Company having face value of Rs. 1 each to
Fairbridge Capital (Mauritius) Limited.
All of the aforesaid transactions are subject to conditions precedent
and regulatory approvals, as deemed necessary.
8 As reported, employees of the Company and other parties
misappropriated assets aggregating to Rs. 9,899,598 during the year.
The Company has recovered Rs. 2,055,466 so far. The cases are under
investigation and the Company has taken steps for recovering the
balance amount.
9 Previous year figures have been reclassified to conform to this
year''s classification.
Dec 31, 2012
1 General Information :
Thomas Cook (India) Limited (the "Company") is a Public Limited
Company listed on the Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE). The Company is engaged in diversified businesses
primarily working as Authorised Foreign Exchange Dealer. The Company is
also engaged in Tour and Travel Business and working as Travel Agent
and Tour Operator.
(a) Rights, preferences and restrictions attached to shares
Equity Shares:-The Company has one class of equity shares having a par
value of Rs. 1/- per share. Each shareholder is eligible for one vote
per share held. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting, except in case of interim dividend. In the event of
liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution to preference
shareholders of all preferential amounts, in proportion to their
shareholding. Preference Shares:- 319,765 ''Class B'' 0.001%
Cumulative Convertible / Redeemable Preference Shares of Rs. 10 each
and 271,800 ''Class C'' 0.001% Cumulative Convertible / Redeemable
Preference Shares of Rs. 10 each were issued on 7th February, 2007 to
the erstwhile shareholders of LKP Merchant Financing Limited (presently
known as LKP Finance Limited) pursuant to the Scheme of Amalgamation
without payment being received in cash. The terms of redemption of
these preference shares are given in Note (f).
(b) Terms of securities convertible into Equity Shares Class B
Preference Shares :-
If the EPS of the Company for any financial year during the Earn out
period first exceeds Rs. 30.30/-, each Class B Preference Share shall
be converted into 1 (One) equity share of the Company within 6 (six)
months from the expiry of the said Financial Year. The number of the
equity shares to be issued upon conversion of the Class B Preference
shares shall be proportionately adjusted in case of any subdivision of
equity shares or Bonus issues of equity shares during the Earn Out
period. Provided however that if the EPS of the Company does not exceed
Rs. 30.30/- for any Financial Year comprised in the Earn Out period ,
each Class B Preference share shall be redeemed by the Company at par
within 6 (Six) months from the expiry of the Earn Out period.
Class C Preference Shares :-
If the EPS of the Company for any financial year during the Earn out
period first exceeds Rs. 36.40, each Class C Preference Share shall be
converted into 1 (one) equity share of the Company within 6 (six)
months from the expiry of the said Financial Year. The number of the
equity shares to be issued upon conversion of the Class C Preference
shares shall be proportionately adjusted in case of any subdivision of
equity shares or Bonus issues of equity shares during the Earn Out
period. Provided however that if the EPS of the Company does not exceed
Rs. 36.40 for any Financial Year comprised in the Earn Out period ,
each Class C Preference share shall be redeemed by the Company at par
within 6 (Six) months from the expiry of the Earn Out period.
Pursuant to sub division of equity share capital of Company in May
2007, wherein the face value of one equity share of Rs. 10 each was
sub-divided into ten equity share of Rs. 1 each, the aforesaid EPS
figures have respectively been adjusted to Rs. 3.03/- and Rs. 3.64/-
per the terms of issue of those shares. Both Class B and Class C
Preference Shares will be due for redemption on 31st December, 2013 if
not converted before the said date.
2 Employees Stock Option Schemes
Thomas Cook Employees Stock Option Plan -2007
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2007". The same has
been approved by a Special Resolution passed by the Shareholders by a
Postal Ballot on 23rd March, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI)- (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long
term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual installments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) -2010
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on 14th December, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme -2010 are same as Thomas Cook
Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of Thomas
Cook (India) Limited at the predetermined exercise price or withdraw
the monthly savings contributions along with interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
equity shares. The maximum number of equity shares that may be issued /
transferred pursuant to the exercise of options granted under the SAYE
scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
During the year ended December 31, 2012, a total of 1,151,332 (Previous
Year-199,663) equity shares of Rs. 1 each were issued and allotted
under the Thomas Cook Employee Stock Option Plan - 2007. Consequently,
the issued and paid up Equity Share Capital has increased to
213,158,694 shares.
The Company has granted share options under the Company''s Employees
Stock Option Plan and share options outstanding as at December 31, 2012
are 3,042,009 (Previous Year - 5,924,654). Of these 58,140 (Previous
Year -129,973) option have vested in 2008, 330,180 (Previous Year -
500,347) have vested in 2009, 330,180 (Previous Year - 615,992) have
vested in 2010, 180,539 (Previous Year - 1,163,709) have vested in
2011, 748,701 (Previous Year - 1,372,818) have vested in 2012 and
1,116,997 (Previous Year - 1,675,873) will vest in 2013, 277,272
(Previous Year - 465,942) will vest in 2014.
(b) Defined Benefit Plans
The disclosures in respect of gratuity, a defined benefit scheme (based
on Actuarial Valuation) are as follows -
This does not include gratuity liability of Rs. Nil (Previous Year Rs.
629,138) and charge of Rs. 16,555 (Previous YearRs. 176,040) in respect
of Sri Lanka branch.
* The discount rate is based on the prevailing market yields of Indian
government securities as at the balance sheet date for the estimated
term of the obligations.
** The expected rate of return on plan assets is based on the average
long term rate of return expected on investments of the Fund during the
estimated term of the obligations.
*** The estimates of the future salary increases considered takes into
account the inflation, seniority, promotion and other relevant factors.
3 The entire Promoter Shareholding of 163,471,449 Equity Shares of the
Company that was pledged on January 10, 2012 was released from pledge
on August 14, 2012. The aforesaid Promoters'' stake was transferred to
Fairbridge Capital (Mauritius) Limited ("Fairbridge"), a step down
subsidiary of Fairfax Financial Holdings Limited, Canada, on August 14,
2012 at Rs. 50/- per equity share in terms of the share purchase
agreement amongst themselves. Further, Fairbridge has acquired
22,182,276 shares from the Non-promoters through the open offer at a
price of Rs. 65.48/- per equity share in terms of the provisions of
Securities & Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011, which was transferred to it on August
14, 2012. The same was communicated to the Stock Exchanges at the
relevant times.
4 Related Party Disclosures
(A) Enterprises where control exists
(i) Holding Company Fairbridge Capital (Mauritius) Limited, Mauritius
holds 87.10% of Equity Shares of the Company.
Fairbridge Capital (Mauritius) Limited is a step down subsidiary of
Fairfax Financial Holdings Limited, Canada the Ultimate Holding
Company.
(ii) Subsidiary Companies Travel Corporation (India) Limited
Thomas Cook Insurance Services (India) Limited
Indian Horizon Travel and Tours Limited
Thomas Cook Tours Limited
TC Visa Services (India) Limited
Thomas Cook (Mauritius) Holding Company Limited
Thomas Cook (Mauritius) Operations Company Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited
Thomas Cook Lanka (Private) Limited (w.e.f 1st August, 2012)
(B) Other Related Parties with whom the Company had transactions during
the year
(i) Fellow Subsidiaries Thomas Cook AG, Germany (upto 14th August,
2012)
Thomas Cook Tour Operations Limited, UK (upto 14th August, 2012)
Thomas Cook Signature Limited, UK (upto 14th August, 2012)
Neckermann Reisen, Germany (upto 14th August, 2012)
Thomas Cook Overseas Limited, Egypt (upto 14th August, 2012)
(ii) Key Management Personnel Madhavan Menon
R. R. Kenkare
Madhav Pai (w.e.f 17th August 2012)
Ambreesh Mahajan (w.e.f 15th November 2012)
Debasis Nandy (w.e.f 18th August 2012)
Vinayak K. Purohit (upto 17th August 2012)
Rakshit Desai (upto 16th July 2012)
Dr. D. Prasanth Nair (upto 10th May 2012)
Amitabh Pandey (upto 31st August 2012)
(iii) Relatives of Key Management Lili Menon Personnel
5 Employees of the Company and other parties misappropriated assets
aggregating to Rs. 5,333,646 during the year. The Company has recovered
Rs. 3,357,363 so far. The cases are under investigation and Company has
taken steps for recovering the balance amount.
6 Acquisition of 74% stake in IKYA Human Capital Solutions
On 5th February, 2013 the Company has signed an investment agreement
for acquiring 74 % interest in IKYA Human Capital Solutions Private
Limited for a consideration of Rs. 2,563 million. The transaction is
subject to various closing conditions, conditions precedent as well as
any regulatory approvals as deemed to be necessary.
7 Transfer of Sri Lanka Business
During the current year, the Company has transferred its Sri Lanka
Branch business to its wholly owned subsidiary Thomas Cook Lanka
(Private) Limited with effect from 1st August, 2012 for a consideration
of Rs. 47.50 million. Consequently the results for current year
includes results for the Sri Lanka branch for 7 months period ended
31st July 2012. Accordingly, the figures of the current year are not
comparable with those of the previous year.
8 Previous Year Figures
The financial statements for the year ended December 31, 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended December 31, 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to this year''s classification. The adoption of Revised
Schedule VI for previous year figures has not impacted recognition and
measurement principles followed for preparation of financial
statements.
Dec 31, 2011
(a) Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs 6,060,554 (Previous Year Rs 12,326,038).
As at As at
31st December,
2011 31st December,
2010
Rupees Rupees
(b) Contingent Liabilities
(i) Claims against the company
not acknowledged as debts:
- Demand from Bombay Electricity
Supply and Transport (BEST) for
Electricity 1,961,083 1,961,083
- Revocation of Bank Guarantee
given to Airport Authority of India 5,387,244 -
(ii) Disputed Income-tax Demands 20,555,770 -
(iii) Disputed Service Tax Demands 1,288,637,350 686,383,970
(iv) Disputed Demand for increase
in rent raised by Brihanmumbai
Municipal Corporation 45,480,820 41,346,200
(v) Disputed Value Added Tax
Demands - 3,182,594
Note:
Future cash outflows in respect of above are determinable only on
receipt of judgements/decisions pending with various
forums/authorities.
(c) The tax year for the company being the year ending 31st March, the
provision for taxation for the year is the aggregate of the provision
made for the three months ended 31st March, 2011 and the provision
based on the figures for the remaining nine months up to 31st December,
2011, the ultimate tax liability of which will be determined on the
basis of the figures for the period 1st April, 2011 to 31st March,
2012.
(d) Micro and Small Scale Business Entities
There are no Micro and Small Enterprises, to whom the Company owes
dues, which are outstanding as at 31st December, 2011. This information
as required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
(e) Employee Benefits
The disclosures as required as per the revised AS 15 are as under:
a) Charge to the Profit and Loss Account towards Contribution to
Provident and Other Funds (including Acturial Loss on Provident Fund of
Rs 2,966,256) amounts to Rs 58,454,195 (Previous Year Rs 48,390,716).
b) The disclosures in respect of gratuity, a defined benefit scheme
(based on Actuarial Valuation) are as follows -
This does not include gratuity liability of Rs 629,138 (Previous Year Rs
469,356) and charge of Rs 176,040 (Previous Year Rs 88,139) in respect of
Sri Lanka branch.
(f) Employee Stock Options :
Thomas Cook Employees Stock Option Plan - 2007.
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2007". The same has
been approved by a Special Resolution passed by the Shareholders by a
Postal Ballot on 23rd March, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI)- (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines ,1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are :
(a) Motivate talent in the organization with a view to achieve long
term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual installments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) - 2010.
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on 14th December, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme - 2010 are same as Thomas Cook
Employees Stock Option Plan -2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of Thomas
Cook (India) Limited at the predetermined exercise price or withdraw
the monthly savings contributions along with interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
equity shares. The maximum number of equity shares that may be issued /
transferred pursuant to the exercise of options granted under the SAYE
scheme shall not exceed 3,000,000 (Three Million) equity shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
(g) Exceptional Item in the previous year represents Rs 100,000,000
received as compensation towards termination of Non Compete Agreement
for the LKP Forex Acquisition.
(h) Derivative Instruments
The Company uses Forward Exchange Contracts to hedge against its
foreign currency exposures related to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
(i) Employees of the Company and other parties misappropriated assets
aggregating to Rs 5,430,000 (Previous Year Rs 5,620,000) during the year.
The Company has recovered Rs 5,070,000 so far. The cases are under
investigation and Company has taken steps for recovering the balance
amount.
(j) The entire Promoter Shareholding of 77.1% has been pledged on 10th
January, 2012. Subsequently on 8th February, 2012 Thomas Cook Group plc
- the ultimate holding company of Thomas Cook (India) Limited has
announced the launch of formal sale process for its 77.1% shareholding
in Thomas Cook (India) Limited.
(k) Previous year figures have been regrouped where necessary.
Dec 31, 2010
(a) Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 12,326,038 (Previous YearRs. 5,306,211).
As at As at
31st December, 2010 31st December, 2009
Rupees Rupees
(b) Contingent Liabilities
(i) Claims against the Company
not acknowledged as debts:
Demand from Bombay Electricity
Supply and Transport
(BEST) for Electricity 1,961,083 1,961,083
(ii) Disputed Income-tax Demands - 57,600,535
(iii) Disputed Service Tax Demands 686,383,970 238,730,410
(iv) Disputed Demand for increase
in rent raised by Brihanmumbai
Municipal Corporation 41,346,200 37,211,580
(v) Disputed Value Added
Tax Demands 3,182,594 --
(vi) Corporate Guarantee given to
a bank for the credit facilities
extended by the said bank to Thomas
Cook (Mauritius) Operations
Company Limited - 69,795,000
Note:
Future cash outflows in respect of (i) to (v) above are determinable
only on receipt of judgements/decisions pending with various
forums/authorities.
(c) The tax year for the Company being the year ending 31st March, the
provision for taxation for the year is the aggregate of the provision
made for the three months ended 31st March, 2010 and the provision
based on the figures for the remaining nine months up to 31st December,
2010, the ultimate tax liability of which will be determined on the
basis of the figures for the period 1st April, 2010 to 31st March,
2011.
(d) Micro and Small Scale Business Entities
There are no Micro and Small Enterprises, to whom the Company owes
dues, which are outstanding as at 31st December, 2010. This information
as required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
(i) Related Party Disclosures
(A) Enterprises where control exists (i) Holding Company
TCIM Limited, UK holds 55.77% of Equity Shares of the Company. Thomas
Cook UK Limited, the Holding Company of TCIM Limited, UK owns 21.41% of
Equity Shares of the Company. Thomas Cook UK Limited is a step down
subsidiary of Thomas Cook Group pic, the ultimate holding company.
(ii) Subsidiary Companies
Travel Corporation (India) Limited
Thomas Cook Insurance Services (India) Limited
Indian Horizon Travel and Tours Limited
Thomas Cook Tours Limited
Thomas Cook (Mauritius) Holding Company Limited
Thomas Cook (Mauritius) Operations Company Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited
(B) Other Related Parties with whom the Company had transactions during
the year
(i) Fellow Subsidiaries
Thomas Cook AG, Germany Thomas Cook Tour Operations Limited, UK Thomas
Cook Signature Limited, UK Thomas Cook Reisen, Germany Neckermann
Reisen, Germany Thomas Cook Overseas Limited, Egypt
(ii) Key Management Personnel
Madhavan Menon Vinayak K. Purohit Rakshit Desai Amitabh Pandey Dr.
Prasanth Nair R. R. Kenkare
(iii) Relatives of Key Managemenl Personnel
Lili Menon
(d) Revenue includes:
(i) Brokerage and Incentives paid netted off Rs. 368,774,136 (Previous
Year Rs. 243,486,572).
(ii) Exchange loss on revaluation of Nostra and other Bank Accounts
used for holding foreign currency for travel business Rs. 36,210,634
(Previous YearRs. 10,913,354).
(e) The Company had considered Non-Compete Fees amounting to Rs.
220,000,000 paid during the financial year ended 31st December, 2007 as
an allowable expenditure for the purpose of computing the provision for
tax. In the current year, the Company has received an assessment order
from the Income Tax authorities in respect of the assessment year
2007-08. This order has allowed the deduction of non compete fees of Rs.
220,000,000 prorated equally over assessment years 2007-08, 2008-09 &
2009-10 respectively. The necessary adjustments for the year wise
provision for tax have been made in the books of account.
(f) Employee Stock Options:
Thomas Cook Employees Stock Option Plan -2007.
The Company has established an Employee Stock Option Plan called
-"Thomas Cook Employees Stock Option Plan - 2007". The same has been
approved by a Special Resolution passed by the Shareholders by a Postal
Ballot on 23rd March, 2007.
The Scheme is in accordance with the provisions of Securities and
Exchange Board of India (SEBI) - (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines,1999. The exercise price is
as governed by the guidelines issued by SEBI.
The objectives of this plan are:
(a) Motivate talent in the organization with a view to achieve
long-term business goals.
(b) Retain key talent in the organization
(c) Foster ownership and motivation.
The grant of options to employees under the stock option scheme is on
the basis of their performance and other eligibility criteria. Each
option will entitle the participant to one equity share of Thomas Cook
(India) Limited. The unvested options shall vest with the participant
in 3 equal annual installments on each of the anniversaries from the
Grant Date.
Thomas Cook Save As You Earn (SAYE) - 2010.
Further to the Thomas Cook Employees Stock Option Plan - 2007, the
Company has established a Thomas Cook Save As You Earn (SAYE), Scheme -
2010. The SAYE scheme has been approved by a Special Resolution passed
on 14th December, 2010, by the shareholders by means of a Postal Ballot
and shall be effective from that date. SAYE is a Monthly Savings
Contribution Scheme available to all employees of Thomas Cook (India)
Limited and its subsidiaries provided that they have completed at least
6 months in the organization.
The objectives of the SAYE Scheme - 2010 are same as Thomas Cook
Employees Stock Option Plan - 2007.
SAYE allows employees to save a part of their net pay every month which
gets deposited with a bank in a recurring deposit account carrying
fixed rate of interest. At the end of 3 years, employees have the
option to either purchase specific number of equity shares of TCIL at
the predetermined Exercise Price or withdraw the Monthly Savings
Contributions along with Interest accrued.
Each option will entitle the participant to one equity share of Thomas
Cook (India) Limited. The maximum number of options granted per
participant per grant will not exceed 200,000 (Two Hundred Thousand)
shares. The maximum number of shares that may be issued/ transferred
pursuant to the exercise of options granted under the SAYE scheme shall
not exceed 3,000,000 (Three Million) shares.
Vesting under the scheme is linked to the continued association with
the Group. The options would vest only when an employee has completed
the committed 36 monthly contributions. The exercise period would not
be more than one month from the date of vesting.
(g) Exceptional Item represents Rs. 100,000,000 received as compensation
towards termination of Non-Compete Agreement for the LKP Forex
Acquisition.
(h) Payroll cost and other expenses are net of reimbursement from
Travel Corporation (India) Limited towards common expenses incurred for
Leisure Inbound business aggregating to Rs. 53,957,769.
(i) Derivative Instruments
The Company uses Forward Exchange Contracts to hedge against its
foreign currency exposures related to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
(j) Employees of the Company and other parties misappropriated assets
aggregating to Rs. 5,620,000 (Previous Year Rs. 4,987,000) during the year.
The Company has recovered Rs 350,000 so far .The cases are under
investigation and Company has taken steps for recovering the balance
amount.
(k) During the year ended 3Tst December, 2009, the Management had
reviewed the operations of its various divisions and branches, and
based on this review the Management has restructured its
businesses/branches and centralised travel operation, thereby incurred
a personnel cost of Rs. 79,034,878.
(l) Previous year figures have been regrouped where necessary.
Dec 31, 2009
(a) The tax year for the Company being the year ending 31st March, the
provision for taxation for the year is the aggregate of the provision
made for the three months ended 31st March, 2009 and the provision
based on the figures for the remaining nine months up to 31st December,
2009, the ultimate tax liability of which will be determined on the
basis of the figures for the period 1st April, 2009 to 31st March,
2010.
(b) Micro and Small Scale Business Entities
There are no Micro and Small Enterprises, to whom the Company owes
dues, which are outstanding as at 31st December, 2009. This information
as required to be disclosed under the Micro, Small and Medium
Enterprises Development Act, 2006 has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
(i) Related Party Disclosures
(A) Enterprises where control exists
(i) Holding Company
TCIM Limited, UK holds 55.87% of Equity Shares of the Company. Thomas
Cook UK Limited, the Holding Company of TCIM Limited, UK owns 21.45% of
Equity Shares of the Company. Thomas Cook UK Limited is a step down
subsidiary of Thomas Cook Group pic, the ultimate holding company.
(ii) Subsidiary Companies
Travel Corporation (India) Limited
Thomas Cook Insurance Services (India) Limited
Indian Horizon Travel and Tours Limited
Thomas Cook Tours Limited
Thomas Cook (Mauritius) Holding Company Limited
Thomas Cook (Mauritius) Operations Company Limited
Thomas Cook (Mauritius) Holidays Limited
Thomas Cook (Mauritius) Travel Limited
Thomas Cook Lanka Holdings (Private) Limited
Airline Services Lanka (Private) Limited
(B) Other Related Parties with whom the Company had transactions during
the year
(i) Fellow Subsidiaries
Thomas Cook AG, Germany Thomas Cook Tour Operations Limited, UK Thomas
Cook Signature Limited, UK Thomas Cook Reisen, Germany Neckermann
Reisen, Germany Thomas Cook Overseas Limited, Egypt
(ii) Key Management Personnel
Madhavan Menon
Vinayak K. Purohit
Rakshit Desai
Nalini Gupta (upto 17th October, 2009)
Parag Mehta (upto 31st March, 2009)
Amitabh Pandey
Dr. Prasanth Nair
R. R. Kenkare
(iii) Relatives of Key Management Personnel
Lili Menon
(c) Employee Benefits
The disclosures as required as per the revised AS 15 are as under:
a) Charge to the Profit and Loss Account towards Contribution to
Provident Fund and Other Fundsamounted to Rs. 46,289,843 (Previous
YearRs. 47,368,802)
b) The disclosures in respect of gratuity, a defined benefit scheme
(based on Actuarial Valuation) is as follows -
This does not include gratuity liability of Rs. 371,616 (Previous Year
Rs. 292,906) and charge of Rs. 98,156 (Previous Year Rs. 208,620) in
respect of Sri Lanka branch.
(d) Turnover includes:
(i) Brokerage and Incentives paid netted off Rs. 243,486,572 (Previous
Year Rs. 240,993,930).
(ii) Exchange loss on revaluation of Nostra and other Bank Accounts
used for holding foreign currency for travel business Rs. 10,913,354
(Previous Year profit Rs. 24,409,780).
(e) The Company has considered Non-Compete Fees amounting to Rs.
220,000,000 paid during the financial year ended 31st December, 2007 as
an allowable expenditure for the purpose of computing the provision for
tax for the year ended 31st December, 2007 based on legal opinion. The
assessment proceedings for the relevant assessment year have not been
completed.
(f) The Company has appointed an Executive Director for a period of two
years with effect from 25th November, 2008 and the Company has paid
remuneration of Rs. 2,473,348 and Rs. 23,568,159 for the years ended
31st December, 2008 and 31st December, 2009 respectively. The
appointment and remuneration of the said Executive Director was
approved by the members in the Annual General Meeting held on 28th May,
2009 but approval of the Central Government of India for which an
application has been made is still awaited.
Managerial remuneration aggregating Rs. 55,354,659 [including Rs.
23,568,159 paid to Executive Director referred in paragraph above] for
the year paid/payable to the directors, which exceeded the permissible
limits as prescribed under Schedule XIII of the Act, is subject to
approval of the Central Government of India. The Company is in the
process of obtaining an approval from the Central Government of India
for the excess remuneration.
(g) The Management has reviewed the operations of its various Divisions
and Branches, and based on this review, the Management has:
(a) Restructured during the year its businesses/branches and
centralized travel operations, thereby incurred personnel cost of Rs.
79,034,878.
(b) Closed the travel/forex branches in previous year and incurred a
sum of Rs. 13,566,679 on account of personnel cost, professional fees
and loss on disposal of assets.
(h) During the previous year, the Company came out with Rights issue of
56,278,554 fully paid-up Equity shares in ratio of 35 (thirty five)
fully paid up equity shares for every 100 (hundred) fully paid up
Equity Share held by the existing shareholders on the record date 27th
December, 2008. Pursuant to this the Company at its Committee meeting
held on 21st January, 2009 allotted 50,650,699 fully paid up Equity
Shares of Re. 1/- each for cash at a price of Rs. 35.50 (including a
share premium of Rs. 34.50) per equity share aggregating to Rs.
1,798,099,815.
(i) During the year ended 31st December, 2009, the Company has redeemed
preference shares of Rs. 1,050,000,000. The premium on redemption of
Rs. 105,287,671 has been adjusted against share premium account arising
out of Right issue of equity shares.
(j) Derivative Instruments
The Company uses Forward Exchange Contracts to hedge against its
foreign currency exposures related to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
(k) Employees of the Company and other parties misappropriated assets
aggregating to Rs. 4,987,000 (Previous YearRs. 7,251,682) during the
year. The Company has recovered Rs. 750,000 so far. The cases are under
investigation and Company has taken steps for recovering the balance
amount. There is no open exposure on the profit for the year in respect
of misappropriated assets except for Rs. Nil (Previous YearRs.
751,100).
(l) Previous year figures have been regrouped where necessary.