international travel house ltd Management discussions

*Capital Employed means Share capital + Other Equity (Net Worth) + Total Debt + Deferred Tax Liability ** Net Capital Turnover Ratio would have been 9.13 and 4.49 for financials years ended

Your Directors are pleased to recommend Final Dividend of

3.50 per Equity Share of 10/- each (Previous Year: Nil), for the financial year ended 31^st March, 2023. Total cash outflow on account of Final Dividend will be 279.81 lakhs.

The key financial ratios of the Company where there have been significant changes (25% or more) are summarized below, pursuant to Schedule V (B) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations):

(Rs in lakhs)

31^st March, 2023 and 31^st March, 2022, respectively, with Numerator being Gross Billings. ^ Trade Receivables Turnover Ratio would have been 11.74 and 7.4 for financial years ended 31^st March, 2023 and 31^st March, 2022, respectively, with Numerator being Gross Billings.

After a gap of almost two years, the business travel sector picked up momentum during the financial year 2022-23. While virtual meetings and work from anywhere have not completely stopped, the need to return to face-to-face interactions has spurred business travel growth.

Aviation sector displayed a strong revival. In 2022, global air passenger traffic gained momentum and recovered substantially as travel restrictions were taken down and passengers expressed a very strong willingness to travel. As per IATA, Global passenger traffic recovered to 68.5% of 2019 volumes in the year.

Supported by a growing economy, the countrys civil aviation sector is poised for healthy growth in terms of passengers, aircraft and airports. During the year, your Companys digital interventions to enhance customer service and efficiency were strengthened with the roll out of the new self-booking tool providing contemporary technology solutions to further simplify the customers booking journey and automate other related processes. Strong efforts in retention and new business acquisition coupled with initiatives to widen the service offerings and structural cost reduction helped grow the business volumes, revenue and margins. Your Company continues to focus on its digitization journey towards enhanced business efficiencies, cost management and improved customer service.

Your Company continues to offer a full range of business travel solutions for domestic and international travel including Air Ticketing, Hotel Accommodation, Visa facilitation, Insurance and Foreign Exchange services as part of its overall bouquet of services to the corporate and individual travelers.

Corporate and institutional MICE remained soft through most of the year 2022, although some hotels in Delhi indicated a good re-bound. Overall this segment is expected to grow in 2023 (Horwath HTL - India Hotel Market Review 2022).

Your Company handled several outbound and domestic groups in the year from sectors including Infrastructure, Pharmaceuticals, Information Technology and Apparels, whilst also handling events across the Paper & Pulp, Furnishings and Education sectors. The expected economic growth in 2023 should support the revival for both domestic and outbound MICE in the coming year.

The Indian Outbound Travel Market is among the fastest growing markets globally with approximate 80 million passport holders, a growing population of youth & a rising level of purchasing power especially among the middle class. The growth in the market is primarily attributed to the increasing desire to travel especially in case of millennials. Outbound travel is expected to surpass USD 40 billion by 2026 with an impressive double-digit growth rate during the forecast period 2021-2026, says the report by Nangia Andersen LLP & FICCI. Led by innovations in offerings, leisure travel continues to progressively improve as bottlenecks ease. Your Companys continued focus on enhancing customer experience led to the launch of several new products like Cruise Holidays, Magical Journeys, Honeymoon Specials, Long Weekend Getaways etc.

The positive trends in business for the car rental sector were aligned with the return of business travel. While COVID-19 concerns did re-surface during some months in the year, your Company continued to leverage the safety and hygiene initiatives adopted across the car rental services to ensure speedier revival levels. While the Indian economy displayed positive signals, there were some aspects which curbed the pace of revival in the car rental sector viz. concerns on global macro-economic trends, use of technology for virtual meetings, hybrid working models, etc. Your Company continues to focus on margin enhancement initiatives comprising of right asset mix, sourcing standards and structural cost interventions coupled with the core focus to keep building higher service levels on the foundation of quality, reliability and safety, which led to improvement in revenue generation.

Over the past years, Electric Vehicles (‘EVs) have received significant support from the government in terms of tax benefits and incentives to spur EV adoption and the electric vehicle infrastructure is steadily building scale to support the growing trend of electric vehicles. While the EV market is still at a nascent stage, EV adoption has increased steadily. According to the data on the portal of Ministry of Road Transport and Highways Vahan, the registration of electric vehicles in India rose to 10,20,679 in 2022 from 3,29,808 in 2021. Your Company has initiated a pilot with EVs in the financial year

2022 23 and the response has been encouraging. Plans to induct

EVs in a phased manner across all cities of operations is in the pipeline.

The Company does not have any subsidiary, associate or joint venture.

Corporate Governance in your Company operates at three interlinked levels which clearly delineates the roles, responsibilities and authorities across the three levels of the governance structure. Your Company also has a Code of Conduct which commits Management to conform to the financial and accounting policies, systems and processes, conduct business ethically and ensure strict compliance with all applicable laws and regulations. These policies have been widely communicated across the organisation and together with the ‘Strategy of Organisation, Planning & Review Processes and the Risk Management Framework, they create a controlled environment across the Company and provide the foundation for Internal Financial Controls with reference to your Companys Financial Statements.

Your Companys Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by the Management and approved by the Audit Committee and the Board of Directors (‘the Board). These Policies are supported by the Corporate Accounting, System and Policies that apply to the entity as a whole to implement the tenets of Corporate Governance and Significant Accounting Policies uniformly across your Company. The Accounting Policies are reviewed and updated from time to time. These in turn are supported by a set of policies and Standard Operating Procedures (‘SOPs) that have been established for individual functions. Your Company uses Information Technology Systems as a business enabler and also to maintain its books of accounts. The SOPs, in tandem with the Information Management Policy, reinforce the control environment. The whole gamut of controls, policies, procedures and systems are reviewed by management and audited by the Internal Auditor whose findings and recommendations are reviewed by the Audit Committee and tracked through till implementation.

Your Company has in place adequate internal financial controls with reference to Financial Statements. Such controls have been assessed during the year taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of this assessment carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless, your Company recognises that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes are undertaken to ensure that such systems are reinforced on an ongoing basis.

Your Company continues to focus on a system-based approach to business risk management and it has been an integral part of your Companys ‘Strategy of Organisation. Backed by strong internal control systems, the current Risk Management Framework consists of the following key elements:

- The Corporate Governance Policy approved by the Board clearly lays down the roles and responsibilities of the various entities in relation to risk management covering a range of responsibilities, from strategic to operational. These role definitions, inter-alia, provide the foundation for your Companys Risk Management Policy that is endorsed by the Board and is aimed at ensuring formulation of appropriate risk management procedures, their effective implementation and independent monitoring and reporting by Internal Auditor.

- A combination of policies and procedures, bring robustness to the process of ensuring that business risks are effectively addressed.

- Appropriate structures are in place to proactively monitor and manage the inherent risks in businesses with unique / relatively high risk profiles.

- Internal Audit is an independent and external function and carries out risk focused audits, enabling identification of areas where risk management processes may need to be further strengthened. These audits are conducted by M/s Grant Thornton Bharat LLP, Chartered Accountants (‘GT) who are the Internal Auditor of the Company. The Audit Committee of the Board reviews Internal Audit findings and provides strategic guidance on internal controls. The Audit Review Committee closely monitors the internal control environment within your Company, including implementation of action plans emerging out of internal audit findings.

- A robust and comprehensive framework of strategic planning and performance management ensures realisation of business objectives based on effective strategy implementation. The annual planning exercise requires identification of top risks and sets out a mitigation plan with agreed timelines and accountabilities. Businesses are required to confirm periodically that all relevant risks have been identified, assessed, evaluated and that appropriate mitigation systems have been implemented.

Your Company endeavours to continuously sharpen its Risk Management systems and processes in line with rapidly changing business environment. The combination of policies and processes adequately addresses the various risks associated with your Companys businesses. The risk management practices of your Company and Internal Audit processes, have been found to be relevant and commensurate with the size and complexity of its operations.

Your Company believes that strong internal controls that are commensurate with the size and scale of your Companys operations are concomitant to the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances.

Your Company remains committed to ensuring a mature and effective internal control environment that, inter-alia, provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds / errors, accuracy and completeness of accounting records, timely preparation of reliable financial information, adherence with relevant statutes and compliance with related party transactions.

Your Companys internal control systems include documented policies and procedures, segregation of duties and careful selection and professional development of employees.

Your Companys independent and robust Internal Audit processes provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements.

GT, the Internal Auditor, have assured the Company that they are adequately skilled and resourced to deliver high standards of audit assurances. In the context of the IT environment of your Company, systems and policies relating to Information Management are periodically reviewed and benchmarked for contemporariness. Compliance with the Information Management policies receives focused attention of the Internal Auditor.

The Audit Committee of your Board met four times during the year. The Terms of Reference of the Audit Committee, inter-alia, include reviewing the adequacy and effectiveness of the internal control environment, monitoring implementation of the action plans emerging out of review of significant Internal Audit findings including those relating to strengthening of your Companys risk management systems and discharging of statutory mandates. The Statutory Auditor and the Secretarial Auditor of your Company have not reported any fraud to the Audit Committee or the Board under Section 143 (12) of the Companies Act, 2013 (‘the Act), including rules made thereunder.

Your Company has steadily recovered from the disruption posed by various waves of COVID-19 on the back of operational efficiency, workforce remobilization and resilience.

The workforce has been calibrated efficiently so as to support business recovery and is mentored by a competent & passionate leadership team. Your Company intends to focus on building an agile & skilled workforce through sharper emphasis on learning & development and extending meaningful opportunities. Such investment in learning will invariably make the Company more resilient, paving the way to chart new areas of growth more easily in the face of changing market dynamics / scenario.

As part of your Companys commitment to create a place where people can be successful both professionally and personally, efforts are made to create wholistic employee experience with equal importance on growth, engagement, and well-being. Endeavor is also made to provide specially crafted programs and practices to enable employees to perform at their full potential and set them up to succeed.

In line with the overall digital transformation strategy, your Company has made investments to leverage emerging technologies in anticipation of adequately servicing our clients requirements. In line with your Companys focus on people first & technology as enabler, effective technological interventions are being implemented.

Your Company finds it imperative to follow policies and procedures in order to facilitate an unbiased and safe working environment. The Company has put in place Grievance Redressal Procedures and a Policy on Sexual Harassment as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH) and the Rules framed thereunder. The Company has undertaken a people scope classroom as well as online training program geared towards employee awareness on POSH. Your Company has Internal Committees to ensure that adequate preventive measures are taken and grievances in this regard, if any, are effectively addressed. During the year under review, no complaint relating to sexual harassment was received.

Your Companys Whistleblower Policy encourages Directors and employees to bring to the Companys attention instances of illegal or unethical conduct, actual or suspected incidents of fraud, actions that affect the financial integrity of your Company, or actual or suspected instances of leak of unpublished price sensitive information that could adversely impact the Companys operations, business performance and/ or reputation. The Policy requires your Company to investigate such incidents, when reported, in an impartial manner and take appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Companys Policy to ensure that no complainant is victimised or harassed for bringing such incidents to the attention of the Company.

The practice of the Whistleblower Policy is overseen by the Audit Committee and no employee was denied access to the Committee during the year. The Whistleblower Policy is available on the Companys website at https://www.internationaltravelhouse.in/whistleblower-policy.aspx.

The Company was not required to make any contribution towards CSR activities for the financial year 2022-23, since none of the criteria prescribed in Section 135 of the Act was applicable to the Company during the immediately preceding financial year 2021-22. The Annual Report on CSR activities of the Company as required under Sections 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure 1 forming part of this Report.

During the year, your Company has not accepted any deposits from the public / members, under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

During the year under review, Mr. Bhagwateshwaran Hariharan (DIN: 02953902), stepped down as Managing Director of your Company with effect from close of work on 31^st January, 2023. Your Directors place on record their appreciation for the contribution made by Mr. Hariharan during his tenure with the Company.

The Board on the recommendation of the Nominations & Remuneration Committee, appointed at its meeting held on 13^th January, 2023, Mr. Ashwin Moodliar (DIN: 08205036), who is on deputation from ITC Limited (‘ITC) as an Additional Director, and subject to your approval, also as the Managing Director of the Company for a period of three years with effect from 1^st February, 2023 or till such date upon withdrawal of deputation by ITC, whichever is earlier. He has the required integrity, expertise and experience. His appointment was approved by the Members of the Company through postal ballot on 2^nd March, 2023. There were no other changes in the composition of the Board of the Company during the year.

Mr. Pradeep Vasant Dhobale will complete his present term as Independent Director of your Company on 31^st October, 2023. The Board, on the recommendation of the Nominations

& Remuneration Committee, has recommended for the approval of the Members, the re-appointment of Mr. Dhobale as Independent Director of the Company for a period of five years with effect from 1^st November, 2023. Appropriate resolution seeking your approval to the aforesaid appointment is appearing in the Notice convening the ensuing Annual General Meeting (‘AGM) of your Company.

In accordance with the provisions of Section 152 of the Act read with Articles 143 and 144 of the Articles of Association of your Company, Mr. Anil Rajput (DIN: 00022289) Director, will retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Your Board has recommended his re-appointment.

Four meetings of the Board were held during the year ended 31^st March, 2023.

Attributes, Qualifications & Independence of Directors and their Appointment The Governance Policy of the Company, inter-alia, requires that Non-Executive Directors, be drawn from amongst eminent professionals with experience in business / finance / law / public administration and enterprises. The Nominations

& Remuneration Committee has laid down the criteria for determining qualifications, positive attributes and independence of Directors (including Independent Directors). The Board Diversity Policy of the Company requires the Board to have a balance of skills, competencies, experience and diversity of perspectives appropriate to your Company. The skills, expertise and competencies of the Directors as identified by the Board, along with those available in the present mix of the Directors of your Company, are provided in the ‘Report on Corporate Governance, forming part of the Report and Accounts. The Articles of Association of the Company provides that the strength of the Board shall not be fewer than three nor more than twelve. Directors are appointed/ re-appointed with the approval of the Members. All Directors, other than Independent Directors and Managing Director, are liable to retire by rotation, unless otherwise approved by the Members. One-third of the Directors who are liable to retire by rotation, retire every year and are eligible for re-appointment.

The Independent Directors of your Company have, inter-alia, confirmed that (a) they meet the criteria of Independence as prescribed under Section 149 of the Act and Regulation 16 of the Listing Regulations, (b) they are independent from the management of your Company, and (c) they are not aware of any circumstance or situation which could impair or impact their ability to discharge duties with an objective, independent judgment and without any external influence. In the opinion of the Board, the Independent Directors fulfil the conditions prescribed under the Act and the Listing Regulations and are independent of the management of your Company.

The Companys Policy on remuneration of Directors, Key Managerial Personnel and other employees, as approved by the Board, may be accessed on its website https://www. internationaltravelhouse.in/remuneration-policy.aspx.

There has been no change in the Policy during the year.

The Nominations & Remuneration Committee, as reported in earlier years, formulated the Policy on Board evaluation, evaluation of Board Committees functioning and individual Director evaluation and also specified that such evaluation will be done by the Board. Your Company believes that it is the collective effectiveness of the Board that impacts Companys performance, the primary evaluation platform is that of collective performance of the Board as a whole. Board performance is assessed, inter-alia, against the roles and responsibilities of the Board as provided in the Act, the Listing Regulations and the Companys Governance Policy. The parameters for Board performance evaluation have been derived from the Boards core role of trusteeship to protect and enhance shareholder value as well as fulfil expectations of other stakeholders through strategic supervision of your Company. Evaluation of functioning of Board Committees is based on discussions amongst Committee members and are shared by the respective Committee Chairmen with the Board. Individual Directors are evaluated in the context of the role played by each Director as a member of the Board at its meetings and in assisting the Board in realizing its role of strategic supervision of the functioning of your Company in pursuit of its purpose and goals. The peer group ratings of the individual Directors are collated and made available to the Chairman of your Company. While the Board evaluated its performance against the parameters laid down by the Nominations & Remuneration Committee, the evaluation of individual Directors was carried out against the laid down parameters anonymously in order to ensure objectivity. Reports on functioning of the Committees were placed before the Board. The Independent Directors of the Board also reviewed the performance of the Chairman, other non-independent Directors and the Board, pursuant to Schedule IV of the Act and Regulation 25 of the Listing Regulations.

As stated earlier, Mr. B Hariharan ceased to be the Managing Director of your Company and Mr. A Moodliar was appointed as the Managing Director of your Company with effect from 1^st February, 2023. There was no other change in the Key Managerial Personnel of your Company during the year under review. After the closure of the financial year 2022-23, Mr. M Aggarwal resigned as the Chief Financial Officer of your Company with effect from close of work on 20^th April, 2023. The Board, on the recommendation of the Audit Committee and the Nominations & Remuneration Committee, appointed Ms. G Chadha as the Chief Financial Officer of your Company w.e.f. 21^st April, 2023.

The composition of the Audit Committee is provided under the section ‘Board of Directors & Committees in the Report and Accounts.

Messrs. Deloitte Haskins & Sells LLP (‘DHS), Chartered Accountants (Firm Registration No. 117366W/W-100018), were re-appointed as the Companys Statutory Auditor with your approval at the Forty First AGM held on 22^nd September, 2022, to hold such office for a period of five years, till the conclusion of the Forty Sixth AGM of the Company. DHS have submitted their Report on the Financial Statements of the Company which forms part of this Report and Accounts. There is no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report for the financial year ended 31^st March, 2023.

Pursuant to Section 142 of the Act, the Board, on the recommendation of the Audit Committee, has recommended for the approval of the Members, the remuneration of DHS to conduct the statutory audit of the Company for the financial year 2023-24. Appropriate resolution seeking your approval to the above is appearing in the Notice convening the ensuing AGM of the Company.

Ms. Pooja Bhatia, Company Secretary in Practice, Proprietor, Messrs. P B & Associates was appointed by the Board as the Secretarial Auditor of your Company for the financial year ended 31^st March, 2023. The Secretarial Auditor have confirmed that your Company has complied with the applicable laws and that there are adequate systems and processes in your Company commensurate with its size and scale of operations to monitor and ensure compliance with the applicable laws.

The Report of the Secretarial Auditor, pursuant to Section 204 of the Act, is provided in Annexure 2 of this Report. There is no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in their Report for the financial year ended 31^st March, 2023.

During the year under review, all contracts or arrangements entered into by your Company with its related parties were in accordance with the provisions of the Act and the Listing Regulations. All such contracts or arrangements as approved by the Audit Committee, were in the ordinary course of business and on arms length basis.

During the year under review, the Company obtained your approval for entering into material related party transactions, in the ordinary course of business and on arms length basis, with ITC and ITC Infotech India Limited (related parties within the meaning provided under the Listing Regulations), upto an aggregate value of 12,000 lakhs and 5,000 lakhs, respectively for the financial year 2023-24 (including existing contracts / arrangements / transactions). The details of material related party transactions of the Company in the prescribed Form AOC-2, are given in Annexure 3 to this Report.

Your Companys Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Companys website at https://www.internationaltravelhouse.in/policy-on-related-party-transactions.aspx .

The Board, on the recommendation of the Audit Committee, has recommended for the approval of the Members, modification to the existing material related party transactions with ITC for the financial year 2023-24 by revising the total value of the transactions from 12,000 lakhs to 13,500 lakhs. Further, approval of the members is also sought for entering into related party transactions with ITC and ITC Infotech India Limited upto an aggregate value of 16,500 lakhs and 5,000 lakhs, respectively, for the financial year 2024-25 (including existing contracts / arrangements / transactions). Appropriate resolutions seeking your approval to the aforesaid transactions are appearing in the Notice convening the ensuing AGM of your Company.

As required under Section 134 of the Act, your Directors confirm having: a) followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures, if any; b) selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period; c) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; d) prepared the Annual Accounts on a going concern basis; e) laid down internal financial controls to be followed by your Company and that such internal financial controls were adequate and operating effectively; and f) devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The certificate of your Companys Statutory Auditor, Messrs. Deloitte Haskins & Sells LLP, confirming compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations, is annexed as Annexure 4 to the Report.

Your Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

The Company is not required to maintain cost records in terms of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014.

There is no significant or material order passed during the year under review, by any Regulator, Court or Tribunal impacting the going concern status of your Company or its future operations.

The Annual Return of the Company is available on its website at https://www.internationaltravelhouse.in/annual-return. aspx.

During the year under review, your Company has neither given any loan or guarantee nor made any investment under the provisions of Section 186 of the Act.

Particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Particulars as required under Section 134 of the Act relating to Conservation of Energy, Technology Absorption and Foreign Exchange are provided below:

(a) Steps taken or impact on conservation of energy: NIL

(b) Steps taken for utilising alternate sources of energy: During the year under review, your Company initiated the deployment of Electric Vehicles at select locations with a view to monitor the performance and operations. The initial performance results have been encouraging and customer satisfaction has been high. Fully electric vehicles have zero tailpipe emissions and are therefore able to delay any further environmental degradation. Each vehicle that your Company has deployed, when compared with an internal combustion engine vehicle of a similar category, supports reduction of on an annualized basis.