International Travel House Ltd Management Discussions.

Your Directors submit their Report for the financial year ended 31st March, 2017.


The global economy continued to lose pace in 2016 growing by 3.1% compared to 3.4% in 2015. The growth in US and the Euro Areas also slowed down and were in the range of 1.6% to 1.7%. However, it is anticipated that the global economy will be stronger in 2017 and will outpace the growth seen in 2015.

The Indian economy too witnessed another challenging year, with the real GDP growth at 7.1%, a significant decline over 2015-16 (7.9%). The Industry and Services sectors decelerated further during the year, recording the slowest growth over the last few years. However, India still remains the fastest growing major economy in the world.

Inflation remained largely within the comfort zone of the RBI during the year. While growth in Wholesale Price Index (WPI) for 2016-17 stood at 1.7% compared to a decline of 3.7% in 2015-16, this was mainly attributable to the base effect of low fuel and commodity prices. Consumer Price Index (CPI) for 2016-17 declined to 4.5% against 4.9% in 2015-16 with Core CPI remaining stable at 4.7% in 2016-17 (4.6% in 2015-16).


Your Company recorded revenue from operations of Rs. 201.54 crores (previous year Rs. 195.91 crores) registering a 2.9% growth over last year. Other income at Rs. 4.20 crores (previous year Rs. 4.14 crores) registered a growth of 1.4% as your Companys treasury operations continued to focus on deployment of temporary surplus liquidity within a well-defined risk management framework. Pre-tax profits at Rs. 18.30 crores (previous year Rs. 16.10 crores) grew by 13.67% and post-tax profits at Rs. 11.17 crores (previous year Rs. 9.61 crores) grew by 16.23% over last year. This was mainly on account of managing a higher total income without corresponding increase in costs. During the financial year 2016-17, your Company earned Rs. 20.24 crores (previous year Rs. 23.82 crores) in foreign exchange from its Travel, Tours and Car Rental Services. Your Companys expenditure in foreign currency amounted to Rs. 0.39 crores (previous year Rs. 0.31crores). Details of foreign exchange earnings and outflow are provided in Additional Notes 32 (vii) and (viii) to the Financial Statements.


The financial results of your Company, summarised, are as under:

For the year ended 31st March, 2017 For the year ended 31st March, 2016
Profits (Rs.) (Rs.)
a. Profit Before Tax 18,30,90,993 16,09,94,901
b. Tax Expense
Current Tax 7,82,78,663 5,99,54,032
Deferred Tax (69,11,694) 49,78,444
c. Profit for the year 11,17,24,024 9,60,62,425
d. Other Comprehensive Income (71,02,013) (12,92,482)
e. Total Comprehensive Income 10,46,22,011 9,47,69,943
Statement of Retained Earnings
At the beginning of the year 1,18,82,77,215 1,13,44,00,858
Add: Profit for the year 11,17,24,024 9,60,62,425
Other Comprehensive Income (Net of Tax) 71,02,013 12,92,482
Dividend paid including
Income Tax on Dividend paid 4,08,93,586 4,08,93,586
At the end of the year 1,25,20,05,640 1,18,82,77,215

Your Directors are pleased to recommend a dividend of Rs. 4.25 per Equity Share of Rs. 10/- each for the year ended 31st March, 2017, thereby maintaining last years dividend.



Indias domestic travel market grew by 23% during the year 2016. Domestic airlines carried 999 lac passengers in 2016 against 811 lacs in the previous year. The growth drivers were from retail segment and mainly due to low air fares and additional capacity added by the airlines. The Indian aviation industry was estimated at USD 16 billion in the year 2015 and is expected to become the worlds third largest market by 2020.

Indias international outbound business travel spending have shown a subdued growth in the 5-6 percent per year range. However, in overall terms, a double digit business travel spending growth continues for India, and has been predicted at 11.6%. The country continues to position itself to become a world leader in business travel.

Despite an increase in volume of tickets sold during the year, your Companys top line showed a marginal growth due to lower domestic tariffs as average ticket price was down. This adversely impacted performance linked bonuses which are received from the airlines. A further depletion of airline commissions kept the earnings under pressure during the year. However, your Company has been able to sustain growth over the previous year with various initiatives.

Your Company received performance excellence awards from Singapore Airlines, Air Mauritius, Sri Lankan Airlines, Thai Airways, Hahn Airlines, Oman Air and GoAirways.

Car Rental Business

The car rental market in India was estimated at USD 9 billion in the year 2015, with a major part of the market being dominated by the unorganised sector. This market is expected to grow at a CAGR of 24.6% till the financial year 2019.

Disruption from aggregators continued during the year, with their entry into the corporate sector. Also the low pricing by the app based companies put pressure on margins with tariffs being flat and input costs increasing.

Despite the increased competition and price wars, your Company showed a marginal decline over the previous year. Focus on technology adaption continued for safety with multilevel tracking. Chauffeur training and grooming continued with redefined focus on safety.

During the year, your Company opened an office at Indore to attract new clients and gain market share. Plans to commence operations in other tier II cities continue to be pursued.


Your Company holds a valid full-fledged money changers (FFMC) licence issued by the Reserve Bank of India and runs FFMC business in eight of its IATA offices across India in order to provide a one stop shop for all travel requirements of the tourist. Your Company had a significant growth in this business during the year.


Your Company maintained its position in this segment by being the sole official travel partner for many events and has successfully organised over 25 Trade Shows during the year. The major events organised by your Company were Bauma Conexpo, Renewable Energy and prestigious shows of ISHRAE, Messe Frankfurt, Nuernberg Messe, United Business Media, PDA Trade Fairs etc. Your Company had the distinction of being honoured with the Top Professional Conference Organisers (PCO) Award 2016 during the year.

Outbound and Domestic Tourism

Extensive efforts by the Government to promote India as a tourist destination coupled with the presence of a large number of Indian diaspora resulted in outbound tourism growing at a CAGR of 10.46% over the last five years. Relaxation in forex rules and investor friendly business policies have added to the increase of business travellers both inbound and outbound.

Your Companys focused approach in this segment resulted in significant growth despite demonetisation during the year. Your Company provides an online booking system to its customers to book hotels and tour packages.

Your Company has received an award from Hong Kong Tourism for year on year growth in the Meetings and Incentives segment.

Inbound and Domestic Tourism Scenario

The growth in the Foreign Tourist Arrivals (FTAs) into India, which is about 8 million (0.6% of the population) is quite low when compared to the Association of Southeast Asian Nations (ASEAN) (15.3%), the Organisation for Economic Co-operation and Development (OECD) nations (48.7%), the Gulf Cooperation Council (GCC) (85.5%) and other emerging economies (5.5%). This not only highlights abysmally low penetration levels, but also underlines the untapped potential that can be capitalised with the right mix of infrastructure, safety and security, and speed and convenience of the entire travel life-cycle from bookings to sharing feedbacks.

The explosive growth in Domestic Tourist Visits (DTVs) that grew at a CAGR of 13.6% over the last 24 years standing at 1.43 billion tourists is a testimony of the fact that with speed, safety and convenience of transaction from a travellers perspective, the future growth would also continue to be on an exponential trajectory.


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


Corporate Governance in your Company operates at three interlinked levels with clearly defined roles, responsibilities and authorities across the three levels of the governance structure. Your Company also has a Code of Conduct which requires management to conform to the required financial and accounting policies, systems and processes, conduct business ethically and ensure strict compliance with all applicable laws and regulations. Both these policies have been widely communicated across the organisation and together with the ‘Strategy of Organisation, Planning & Review Processes and the Risk Management Framework, create a control environment across the Company and provides the cornerstone 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 management and approved by the Audit Committee and the Board. These Policies are supported by the Corporate Accounting, System and Policies that apply to the entity as a whole and are practiced uniformly across the 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 businesses. 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 reinforces the control environment. The whole gamut of controls, policies, procedures and systems, are reviewed by management and audited by Internal Audit whose findings and recommendations are reviewed by the Audit Committee and tracked through to implementation.

Your Company has in place adequate internal financial controls with reference to Financial Reporting. 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 management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were 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 ensure that such systems are reinforced on an ongoing basis.


Your Company continues its emphasis on a systems-based approach to business risk management. 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 the strategic to the operational. These role definitions 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 Audit.

- The Risk Assessment and Management Cell, through focused interactions with businesses, facilitates the identification and prioritisation of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks.

- A combination of centrally issued policies and procedures, which are regularly reviewed and updated in the light of changing business and regulatory environment brings 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.

- Corporate Internal Audit is an independent function and carries out risk focused audits across all businesses, enabling identification of areas where risk management processes may need to be strengthened. The Audit Committee of the Board reviews Internal Audit findings, provides strategic guidance on internal controls and seeks feedback on implementation based on such guidance. 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 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 accountability. Businesses are required to confirm periodically that all relevant risks have been identified, assessed, evaluated and that appropriate mitigation systems have been implemented.

The combination of policies and processes as outlined above adequately addresses the various risks associated with your Companys businesses.


Your Company believes that internal control is a necessary adjunct of 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 an effective internal control environment that provides assurance and comfort on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds / errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

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.

The Internal Audit function consisting of an in-house team and outsourced professional firms is resourced to deliver high standards 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 Audit team.

The Audit Committee of your Board met four times during the year. The Terms of Reference of the Audit Committee included reviewing the adequacy and effectiveness of the internal control environment, monitoring implementation of the action plans emerging out of Internal Audit findings including those relating to strengthening of your Companys risk management systems, and discharge of statutory mandates.


Your Company firmly believes that employees are the vital and most valuable assets and hence has created a favourable work environment that encourages innovation and meritocracy. Your Company has driven myriad changes in the way human resources are managed and developed, striking a balance between business needs & individual aspirations.

Your Companys Human Resource policies and procedures continue to evolve to stay ahead with the dynamic business environment and have enhanced organisational ability to remain compliant with the changing regulatory requirements.

Your Company is committed to achieve sustainable organisational performance as an overarching goal.

The Company provides a gender friendly workplace and no case of sexual harassment was reported during the year. The Company has put in place a Grievance Redressal Procedure and an Internal Complaints Committee to ensure that grievances in this regard, if any, are effectively addressed.


The Companys Whistleblower Policy encourages Directors and employees to bring to the Companys attention instances of unethical behaviour, actual or suspected incidents of fraud or violation of the ITHL Code of Conduct that could adversely impact the Companys operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes 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 employee 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 has been denied access to the Committee. The Whistleblower Policy is available on the Companys website at policies/Whistleblower_Policy.pdf.


Your Companys CSR Policy outlines the programmes and projects that fall within the purview of Schedule VII of the Companies Act, 2013 (the Act) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The annual report on CSR activities 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 the Annexure forming part of this Report.


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


Changes in Directors

Mr Jehangir Jal Ghadiali who was on deputation from ITC Limited (ITC), stepped down as Managing Director of the Company with effect from 27th January, 2017, consequent to his reversion to ITC. Mr Anil Baijal ceased to be an Independent Director of your Company with effect from 30th December, 2016, consequent to his appointment as Lt. Governor of Delhi. Your Directors would like to record their appreciation for the services rendered by Messrs Ghadiali and Baijal.

Retirement by Rotation

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

Number of Board Meetings

During the year ended 31st March, 2017, five meetings of the Board were held.

Attributes, Qualifications & Independence of Directors and their Appointment

The Nominations & Remuneration Committee of the Board had approved the criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules thereunder, both in respect of Independent Directors and other Directors as applicable, as reported last year. The Governance Policy of the Company also, inter alia, requires that Non-Executive Directors, including Independent Directors, be drawn from amongst eminent professionals with experience in business / finance / law / public administration and enterprises. The Board Diversity Policy of the Company requires the Board to have a balance of skills, experience and diversity of perspectives appropriate to the Company. The Articles of Association of the Company provide 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, 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 confirmed that they meet the criteria of independence as prescribed under Section 149 of the Act and Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Companys Policy relating to remuneration of Directors, Key Managerial Personnel and other employees is provided under the section ‘Report on Corporate Governance in the Report and Accounts.

Board Evaluation

The Nominations & Remuneration Committee has approved the Policy on Board Evaluation, Evaluation of Board Committees functioning and individual Director Evaluation. Board performance is assessed against the role and responsibilities of the Board as provided in the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with 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 fulfill expectations of other stakeholders through strategic supervision of the Company. Evaluation of functioning of Board Committees is based on discussions amongst Committee members and shared by each Committee Chairman 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 realising its role of strategic supervision of the functioning of the Company in pursuit of its purpose and goals.

While the Board evaluated its performance against the parameters laid down by the Nominations & Remuneration Committee, the evaluation of individual Directors was carried out anonymously in order to ensure objectivity. The Board was briefed on functioning of Board Committees by the respective Committee Chairmen.

Key Managerial Personnel

Mr Sandip Datta stepped down as the Chief Financial Officer of your Company with effect from close of work on 31st October, 2016. The Board, on the recommendation of the Audit Committee and the Nominations & Remuneration Committee, appointed Mr Savio Sequeira as the Chief Financial Officer of your Company with effect from 1st November, 2016.

In order to strengthen the executive management of the Company and as an interim arrangement, your Board, on the recommendation of the Nominations & Remuneration Committee, appointed Mr Ghanshyam Arora, Senior Executive Vice President - Operations, as also the Manager of the Company with effect from 6th February, 2017, subject to the approval of the Members of the Company.

Thereafter, your Board, on the recommendation of the Nominations & Remuneration Committee, appointed Mr Ajay Kumar as the Chief Executive Officer of the Company effective 5th April, 2017. Consequently, Mr Arora stepped down as the Manager of the Company with effect from close of work on 4th April, 2017.

Appropriate resolution seeking your approval to Mr Aroras appointment as Manager for the period from 6th February, 2017 to 4th April, 2017 is appearing in the Notice convening the ensuing AGM of the Company.


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

Statutory Auditors

The Companys present Auditors, Messrs S R Batliboi & Associates LLP, Chartered Accountants, were appointed with your approval at the Thirty Third AGM to hold such office for a period of three years till the conclusion of the Thirty Sixth AGM i.e. the ensuing AGM.

Your Board, on the recommendation of the Audit Committee, has recommended the appointment of Messrs Deloitte Haskins & Sells LLP, Chartered Accountants (DHS), as Auditors of the Company for a period of five years in accordance with Section 139(1) of the Act. DHS have given their consent and certificate for appointment as the Auditors of the Company. Appropriate resolution in respect of the above appears in the Notice convening the ensuing AGM of the Company.

Secretarial Auditors

Your Board appointed Messrs PB & Associates, Company Secretaries, to conduct the secretarial audit of the Company for the financial year ended 31st March, 2017. Their report is provided in the Annexure forming part of this Report, in terms of Section 204 of the Act.


All contracts or arrangements entered into by the Company with its related parties during the financial year were in accordance with the provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. All such contracts or arrangements have been approved by the Audit Committee. No material contracts or arrangements with related parties were entered into during the year under review. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.


As required under Section 134(5) 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 judgements 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.


Compliance with conditions of Corporate Governance

The certificate of the Auditors, Messrs S R Batliboi & Associates

LLP, Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed.

Going Concern Status

There is no significant or material order passed during the year by any regulator, court or tribunal impacting the going concern status of the Company or its future operations.

Extract of Annual Return

The information required under Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is provided in the Annexure forming part of the Report.

Particulars of Loans, Guarantees or Investments

During the year ended 31st March, 2017, the Company has neither given any loan or guarantee nor has made any investment under the provisions of Section 186 of the Act.

Particulars relating to Conservation of Energy and Technology Absorption

Particulars as required under Section 134 of the Act relating to Conservation of Energy and Technology Absorption are provided below: Conservation of Energy: Steps taken on conservation of energy and impact thereof: NIL Steps taken by the Company for utilising alternate sources of energy: NIL

Capital investment on energy conservation equipment: NIL Technology Absorption:

I) Efforts, in brief, made towards technology absorption and benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.:

• ITH SMART, the Companys reservations and booking platform has stabilised and is now the backbone for reservations and bookings. Further, the platform continues to be enhanced with contemporary features and new contents.

• Your Company has also launched a Corporate Self Booking Tool allowing customers to book various travel products as per their own convenience and travel needs.


• Improved customer service delivery, optimisation of fulfillment process, significant improvement in response time to customers and increased customer reach and connect.

II) In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year), following information may be furnished:

A) Details of technology imported - NIL

B) Year of import - NIL

C) Whether the technology been fully absorbed - NIL

D) If not fully absorbed, areas where absorption has not taken place, and the reasons therefore - NIL

III) Expenditure incurred on research and development - NIL


The total number of employees as on 31st March, 2017 stood at 698.

There were no employees, who were employed throughout the year and were in receipt of remuneration aggregating Rs. 1.02 crores or more or were employed for part of the year and were in receipt of remuneration aggregating Rs. 8.5 lacs per month or more during the financial year ended 31st March, 2017. The information required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this Report.


This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words ‘anticipate, ‘believe, ‘estimate, ‘expect, ‘intend, ‘will and other similar expressions as they relate to the Company and / or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward -looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.


As per India Aviation Outlook Report for the financial year 2017-18, the domestic air traffic could grow by nearly 25% and approach 130 million passengers in India. The next financial year is expected to be the third consecutive year of domestic growth above 20% but may be tempered by 3-5% because of the impact of demonetisation. The Government of India has granted ‘in-principle approval for setting up of 14 Greenfield airports in various parts of the country and has signed an open skies agreement with six countries. These developments should boost passenger traffic to and from India apart from improving connectivity domestically.

The Union Cabinet has given its approval for liberalisation, simplification and rationalisation of the existing visa regime in India and for incremental changes in the visa policy. This will facilitate entry of foreigners for tourism, business and medical purposes with one single visa. According to a government release, this initiative is expected to stimulate economic growth, increase earnings from export of services like tourism, medical value travel and travel on account of business and to make ‘Skill India, ‘Digital India, ‘Make in India and other such flagship initiatives of the Government successful.

On behalf of the Board
Place : New Delhi A Rajput J Singh
Date : 22nd April, 2017 Director Director