Rights, preferences and restriction attached to the Equity Shares
A) The Equity Shares of the Company, having par value of '10.00 per share, rank pari passu in all respects including voting rights and entitlement to dividend.
B) There were no bonus issue or buy back of equity shares during the period of five years immediately preceding the reporting date.
B Fair Value Hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as at 31st March, 2025:
(ii) Corporate Social Responsibility (‘CSR’)
As per Section 135 of the Companies Act, 2013 (“Act”), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per the Act.
a) Gross amount required to be spent by the Company during the year ' 25.69 lakhs (March 24 - Nil).
b) Amount spent during the year in cash for purpose other than construction / acquisition of an asset ' 30.00 lakhs (March 24 -Nil).
c) Nature of CSR activities in the year are as follows: Installation of off-grid solar panels in 20 schools across Saharanpur through Umang Sunehra Kal Seva Samiti to facilitate uninterrupted power supply that will enable smooth running of classes as well as uninterrupted functioning of water supply, sanitation and hygeine facilities at such schools.
CSR expenditure does not include any spends on construction / acquisition of assets.
(iii) Contingent Liabilities and Commitments:
(a) Contingent Liabilities
Claims against the Company not acknowledged as debt: Nil (March 24- ' 23.62 lakhs)
During the year ended 31st March 2025, the Company has received a favorable order from CESTAT Chennai with respect to its appeal filed against Service tax demand for the years from July 2003 to March 2009 and a refund of an amount of '14.30 lakhs paid under protest has been received.
(b) Commitments:
Estimated amounts of contracts remaining to be executed on capital accounts and not provided for ' 1,531.57 lakhs (March 24 - ' 51.87 lakhs).
(iv) (a) During the previous year, the Company had received a demand for ' 1,982.77 lakhs from the Excise and Taxation Officer -
GST Haryana for the period July 2017- March 2018. The Company had filed an appeal with the appellate authorities for the same. The said demand was issued without a proper show cause notice and the basis for the demand was unascertainable. Based on the advice received from the legal counsel, the Company believes that the demand is without merits and has no material financial impact on the Company.
(b) During the previous year, the Company had received a favorable order from Supreme Court of India on the non-applicability of Value Added Tax (Sales Tax) on car rental services. Basis the same, the amount of ' 46.70 lakhs (March 24 - ' 46.70 lakhs) is recoverable from the Delhi Sales Tax Department and has been grouped under Deposits (Note-9 -Other Non-Current Assets).
(v) Micro, Small and Medium scale business entities:
There are no Micro, Small and Medium enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2025. 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.
(vi) Information in respect of Options granted under ITC Employee Stock Option Scheme:
The eligible employees of ITC Limited (ITC) and ITC Hotels Limited (ITCHL), who are deputed to the Company at its request (who were on rolls of ITC Limited prior to the demerger of its hotels business into ITCHL) (earlier employees on deputation from ITC Limited upto 31st December 2024), have been granted Stock Options by ITC under the ITC Employee Stock Option Schemes (ITC ESOS) & by ITC Hotels Limited (ITCHL) under the ITC Hotels - Special Purpose Employee Stock Option Scheme (ITCHL SP ESOS). ITC has also granted Employee Stock Appreciation Linked Reward Units (ESAR Units) in the previous year(s) to the eligible managers deputed to the Company under the ITC Employee Cash Settled Stock Appreciation Linked Reward Plan (ITC ESAR Plan).
ITC ESOS
Each Option entitles the holder thereof to apply for and be allotted ten ordinary shares of ' 1.00 each of ITC upon payment of the exercise price during the exercise period. These options vest over a period of three years from the date of grant and are exercisable within a period of five years from the date of vesting. The options have been granted at the ‘market price’ as defined under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
ITC ESAR
Under the ITC ESAR Plan, eligible employees would receive cash linked to appreciation in the value of the shares of ITC in accordance with the terms and conditions of this Plan. The stock appreciation units (SARs) vest over a period of five years from the date of grant and entitles each ESAR grantee to the appreciation for the total number of ESAR Units vested.
ITCHL SP ESOS
ITC Hotels Special Purpose Employee Stock Option Scheme is formulated pursuant to Scheme (refer Note IA), with respect to Options granted under ITC ESOS to the Eligible Employees. Each option entitles the employees to apply for and be allotted 10 (Ten) Equity Shares of ' I/- each of ITCHL upon payment of the exercise price during the exercise period. Options granted under the Scheme shall have remaining Vesting Period and Exercise Period of corresponding outstanding stock options of ITC as on the Record Date.
The cost of equity settled options granted under the ESOS schemes / cash settled units granted under ITC ESAR Plan have been recognised as equity settled / cash settled share-based payments, respectively, in accordance with Ind AS 102 - Share Based Payment. In terms of the deputation arrangement, the Company has accounted for the cost of the fair value of Stock Options / ESAR Units granted to the deputed employees on-charge by ITC and ITCHL. The fair value of the Options / ESARs granted is determined, using the Black Scholes Option Pricing model, by ITC and ITCHL for all the grantees covered under ITC ESOS / ITCHL SP ESOS/ ITC ESAR.
Accordingly, an amount of ' 55.27 lakhs (March 24 - ' 56.55 lakhs), net of reversals (if any) towards ITC ESOS, ITC ESAR and ITCHL SP ESOS has been recognised as employee benefits expense (Refer Note 31) with corresponding credit to Financial Liabilities. The above cost includes ' 49.45 lakhs (March 24 - ' 51.97 lakhs) attributable to key management personnel; Mr. A Moodliar ' 39.62 lakhs (March 24 - ' 40.32); Ms. Gunjan Chadha ' 9.66 lakhs (March 24 - ' 10.95 lakhs); Sumita Chowdhury Majumdar ' 0.09 lakhs (March 24 - Nil) and Mr. P.V.D. Nandan ' 0.08 lakhs (March 24 - ' 0.70 lakhs)].
Since the above-mentioned Stock Options and ESAR Units are not tradeable, no perquisite or benefit is conferred upon the employee by grant of such Options / Units.
(vii) Segment Reporting
Operating segment is to be reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Corporate Management Committee.
The CODM reviews are conducted for travel related services which encompasses all operations of the Company and as such the figures appearing in the financials relate to a single segment only i.e. travel related services.
Company’s entire revenue from external customers is attributable to India and all non-current assets are located in India. The Company allocates revenue to geographies on the basis of the location in which the sale originated.
Revenue from one customer (and its group entities) exceeds 10% of Company’s total revenue and is ' 3,130.57 lakhs (March 2024 - ' 2,467.52 lakhs)
36 (a) Defined Benefit Plans / Long Term Compensated Absences
Description of Plans
The Company makes contributions to defined benefit plans and defined contribution plans for qualifying employees. Some of these are administered through duly constituted and approved Trusts, which operate in accordance with the Trust Deed, Rules and applicable legislations. These Trusts are governed by Trustees, who provides strategic guidance for management of investments and liabilities of such trusts and periodically review the performance of the Trusts.
Gratuity benefits are funded and leave encashment & medical benefits are unfunded in nature. The defined benefit pension plans are based on employees pensionable remuneration and length of service. Under the Provident Fund and Gratuity, the employees are entitled to receive lump sum benefits upon retirement. Under Pension Schemes, the employees are entitled to post-retirement pension benefits and in certain pension plans, the employees can also opt to receive a part of pension as a lump sum.
The liabilities arising in the defined benefit schemes and other benefits are determined in accordance with the advice of independent, professionally qualified actuaries, using the projected unit credit method. Additional funding requirements are based on actuarial measurement.
risk Management
The defined benefit plans expose the Company to actuarial deficit arising out of investment risk, interest rate risk and salary cost inflation risk. These plans are not exposed to any unusual, entity specific or scheme specific risks but there are general risks.
Investment risks: This may arise from volatility in asset values and losses arising due to impairment of assets
Interest rate risk: The Schemes’ accounting liabilities are calculated using a discount rate set with reference to the Government security yields. A decrease in yields will increase the funds’ liabilities and vice-versa.
Salary Cost Inflation risk: The Schemes’ accounting liabilities are calculated with reference to the future salaries of participants under the Plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.
The Trustees monitor funding and investments positions and have mandated a diversified investment strategy in line with the statutory requirements. The investment strategy with respect to asset mix ensures that investment volatility risk is appropriately managed. Robust risk mitigation systems ensure that investments do not pose significant risk of impairment. Periodic audits are conducted to ensure adequacy of internal controls. The Company’s defined benefit pension plans has been closed to new entrants. Future pension obligation of an employee is secured by purchasing annuities thereby de-risking the Plans from future payment obligations.
* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed. The fair value of Government Securities, Corporate Bonds, Mutual Funds are determined based on quoted market prices in active markets. The employee benefit plans do not hold any securities issued by the Company.
IX Basis used to determine the Expected Rate of Return on Plan Assets
The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect the capital and optimize returns within acceptable risk parameters, the plan assets are well diversified.
XI The sensitivity analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation and the asset value changes may offset the impact to some extent. For presenting the sensitivities, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of sensitivity analysis from previous year.
The Company has a system-based approach to business risk management. The financial risk management process enables the early identification, evaluation and effective management of key financial risks including market risk, credit risk and liquidity risk that may arise as a consequence of its business activities as well as investing and financing activities. Backed by strong internal control systems, the current Risk Management Framework rests on policies and procedures issued by appropriate authorities, process of regular reviews / audits to set appropriate risk limits and controls, monitoring of such risks and compliance confirmation for the same.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk- interest rate risk, foreign currency risk and price risk. Treasury activities, focussed on managing investments in debt instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. The Company has in place appropriate risk management policies to limit the impact of these risks on its financial performance. The Company ensures optimisation of cash through fund planning and robust cash management practices.
. i. Interest rate risk
Fixed deposits, if any held with highly rated banks and have a short tenure and are not subject to interest rate volatility. Since majority of the financial assets of the Company are either non-interest bearing or fixed interest-bearing instruments, the Company’s net exposure to interest risk is negligible.
ii. Foreign Currency risk
The Indian Rupee is the Company’s most significant currency. As a consequence, the Company’s results are presented in Indian Rupee. The Company has limited foreign currency exposure which are mainly on account of Money Changing Business activity undertaken by the Company.
iii. Price risk
The Company’s unquoted debt mutual funds are susceptible to market price risk that arise mainly from changes in interest rate which may impact the return and value of such investments securities. The Company manages the price risk through diversification and by placing limits on individual and total instruments. The Company invests in mutual funds of leading fund houses. The Company’s Board of Directors has approved an investment policy for the Company. However, given the relatively short tenure of underlying portfolio of the mutual fund schemes in which the Company has invested, such price risk is not significant.
B. Credit risk
Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
i. Trade receivables
Customer credit risk is managed subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating score card and individual credit limits are defined in accordance with this assessment. The Company’s payment terms generally range from advance to a credit period of up to 90 days. Concentrations of credit risk is limited as the Company’s customer base is large and diverse. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the counter party etc. Expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. There is no significant financing component in respect of its transaction with the customers.
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The Board has approved a policy for investment of surplus funds. Investment in debt mutual funds are made only with approved mutual funds and credit risk in such funds are limited because the underlying investments are diversified and the Company’s investment framework considers the credit quality of the underlying investments made by the fund house. There are limits for any exposure to financial institutions.
C. Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations as they become due. The Company manages its liquidity risk by ensuring that it will always have sufficient liquidity to meet its liabilities when due. Investments are made with a range of maturities, generally matching the projected cash flows and spreading the same across wide range of counterparties. Considering the dynamic nature of the underlying businesses, the Company also maintains adequate committed credit lines with the banks.
The Company’s treasury function reviews the liquidity position on an ongoing basis.
The Company’s Current Assets aggregate to ' 18,617.92 lakhs (March 24 - '16,434.46 lakhs) including Current Investments, Cash & Cash Equivalents and Other Bank balances of ' 11,565.52 lakhs (March 24 - ' 9,222.78 lakhs) against an aggregate Current Liabilities of ' 6,214.94 lakhs (March 24 - ' 5,871.30 lakhs).
Further, the Company has no borrowings. In such circumstances, liquidity risk or risk that the Company may not be able settle or meet its obligations, as they become due does not exist.
D. Capital Management
The Company’s financial strategy aims to provide adequate capital to its businesses to grow and invest whilst ensuring sustained stakeholder value and ensuring continuance as a going concern. The Company funds its operations through internal accruals.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
42. The Company uses an ERP solution for maintaining its books of account along with integrated customer invoicing software for which audit trail has been enabled at the application level. The IT environment is appropriately governed, and normal / regular users are neither granted nor have access to make changes in data and / or financial documents already posted in the systems.
During the year, the Company has migrated its ERP solution from cloud to an ‘On-premise’ solution which features audit trail at the database level.
Further, database level audit trail feature for customer invoicing software has been implemented in phases during the year.
During the interim period, till the activation of audit trail at database level for such accounting software, any changes made directly in the database have been documented through the structured process for system administration activities.
The Company has established and maintained an adequate internal control framework and based on its assessment, believes that this was effective for the year ended March 31,2025.
43. The Board of Directors of the Company has recommended a final dividend of ' 5.50/- per equity share of '10 /- each for the financial year ended 31st March 2025 and dividend, if declared, will be paid to those members entitled thereto.
44. Figures for the previous period are re-arranged, wherever necessary, to conform to the figures of the current period.
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