The following discussion of our financial condition and results of operations is derived from and should be read in conjunction with the section "Restated Consolidated Summary Statements" on page 405.
This Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Red Herring
Prospectus. For further information, see "Forward-Looking Statements" on page 17. Also read "Risk Factors" and "- Significant Factors Affecting our Results of Operations and Financial Condition" on pages 31, and 481 respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Our Companys Fiscal commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for the years ended 2023, 2022 and 2021, included herein is derived from the Restated Consolidated Summary Statements, included in this Red Herring Prospectus. For further information, see "Restated Consolidated Summary Statements" on page 405.
Certain non-GAAP financial and operational measures and certain other industry measures relating to our operations and financial performance have been included in this section and elsewhere in this Red Herring Prospectus. These non-GAAP Measures should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability, or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or U.S. GAAP. In addition, these Non-GAAP Measures are not standardised terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Please see "Risk Factors - We have in this Red Herring Prospectus included certain Non-GAAP Measures and certain other industry measures related to our operations and financial performance. These Non-GAAP Measures and industry measures may not be comparable with financial, or industry related statistical information of similar nomenclature computed and presented by other companies" and
"Risk Factors Significant differences exist between Ind AS and other accounting principles, such as Indian GAAP, U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of our financial condition" on pages 71, respectively.
Unless otherwise stated, references to "we," "us," or "our," in this section refer to Yatra Online Limited. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our restated consolidated financial statements and the related notes included elsewhere in this document.
Unless otherwise indicated, industry and market data used in this section has been derived from industry publications, in particular, the report titled "Assessment of the travel industry in India" dated August 2023 (the "CRISIL Report"), exclusively prepared and issued by CRISIL Limited, commissioned by, and paid for by us. References to travel industry in this section is in accordance with the presentation, analysis and categorization in the CRISIL Report. Our segment reporting in the financial statements is based on the criteria set out in Ind AS 108, Operating Segments and accordingly we do not prepare our financial statements by the segments outlined in CRISIL Report. Also see, "Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of Presentation Industry and Market Data" on page 13. See also, "Risk Factors Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned by us for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate" on page 55.
Overview
Our Company is Indias largest corporate travel services provider in terms of number of corporate clients and the third largest online travel company in India among key OTA players in terms of gross booking revenue and operating revenue, for Fiscal Year 2023. (Source: CRISIL Report). We have largest number of hotel and accommodation tie-ups amongst key domestic OTA players of over 2,105,600 tie-ups, as on March 31, 2023
(Source: CRISIL Report).
We believe India is one of the worlds largest and fastest growing economies, with a large middle class, increasing disposable income and a rapidly growing online consumer base. Indias real GDP growth is expected to rebound to 7.2% in FY 2023 after experiencing a (5.8%) contraction in Fiscal 2021 due to the repercussions of the COVID-19 pandemic. Given the size and growth dynamics of the India travel market, we have strategically focussed both on the corporate and consumer markets. We are the leading corporate travel service provider in India with 813 large corporate customers and over 49,800 registered SME customers and the third largest consumer online travel company (OTC) in the country in terms of gross booking revenue for Fiscal 2023 (Source: CRISIL Report).
Our go-to-market strategy spans the entire value chain of travel and hospitality covering B2C (business to consumer) and B2B (business to business which includes business to enterprise and business to agents) We believe that the combination of our B2C and B2B channels enable us to target Indias most frequent and high spending travellers, namely, educated urban consumers, in a cost-effective manner. Over 800 large corporate customers of the Company employ over 7.00 million people who along with their families form a large part of the consuming upper middle class of India. In addition, our travel agent network provides additional scale to our business by leveraging our integrated technology platform in order to aggregate consumer demand from over 29,800 travel agents in more than 1,000 cities across India as of March 31, 2023.
Leisure and business travellers use our mobile applications, our website, www.yatra.com, and our other offerings and services to explore, research, compare prices and book a wide range of travel-related services. These services include domestic and international air ticketing on nearly all Indian and international airlines, as well as bus ticketing, rail ticketing, cab bookings and ancillary services within India. We also provide access through our platform to hotels, homestays and other accommodations, with over 105,600 hotels in 1,490 cities and towns in India, as on Fiscal 2023 and more than two million hotels globally, which is the highest hotel inventory amongst key Indian OTA players (Source: CRISIL Report). For details, see "Industry Overview" on page 205. To ensure that our service is a "one-stop shop" for travellers, we also provide our customers with access to holiday packages and other activities such as visa facilitation, tours, sightseeing, shows, and events.
Our business is based on a common technology platform that serves our customers through multiple mobile applications as well as our website www.yatra.com. Common technology platform is a common user interface platform that ensures a single common user view across various channels and a single customer/client interface on both the web and mobile interfaces so that users have a consistent experience irrespective of the channel via which they come to us. Our common platform approach provides us with a scalable, comprehensive and consistent user experience across each of our go-to-market channels and helps us innovate effectively. We believe that this approach drives user familiarity with our service and encourages cross sell and repeat usage by our customers, which further enhances customer loyalty for our business. This approach has enabled us to reduce development costs and accelerate ‘‘time-to-market as new features and services can be launched simultaneously across channels. Our technology platform has been designed to deliver a high level of reliability, security, scalability, integration and innovation.
A Common Platform Linking All Channels, Products and Customers
As of March 31, 2023, over 14 million customers have used our comprehensive travel-related services, which include domestic and international air ticketing, hotel bookings, homestays, holiday packages, bus ticketing, rail ticketing, activities and ancillary services, in our consumer-direct and corporate travel services businesses. Yatra Online, Inc., a Cayman Islands limited company with shares listed in the United States of America on NASDAQ
Capital Market under the symbol "YTRA", is the holding company of our Promoters, THCL and Asia Consolidated DMC Pte. Ltd. ". For details of shares held by Yatra Online, Inc. in THCL, and Asia Consolidated DMC Pte. Ltd., see "Capital Structure" and "Our Promoters and Promoter Group" on pages 167, and 396 of this Red Herring Prospectus.
We generate revenue through three main lines of business: (1) Air Ticketing (2) Hotels and Packages and (3) Other Services. Sales in our Air Ticketing business are primarily made through our websites, mobile applications, mobile web, B2B2C travel agents. Sales in our Hotels and Packages business are made through our websites, mobile applications, mobile web, B2B2C travel agents, and call centers. We also generate revenue through the online sale of rail and bus tickets, advertising revenue from third party advertisements on our websites, revenue from sale of coupons and vouchers, by facilitating access to travel insurance and other ancillary travel services.
(1) In our Air Ticketing Business, revenue from airline ticket sales, encompassing commissions, incentives, and fees, is recognized on a net basis. Airline incentives are accounted for once the performance criteria stipulated in the incentive plans are met or are anticipated to be met by the close of respective period.
(2) In our Hotels and Packages business, revenue from hotel reservations, including commissions and incentives, is recognized on a net basis. Revenue from tours and packages, including revenue on airline tickets sold to customers as a part of tours and packages, is accounted for on a gross basis as we are determined to be the primary obligor in the arrangement as the risks and responsibilities are taken by us, including the responsibility for delivery of services. The cost of delivering such services includes the cost of hotel, airline and package services and is disclosed as service cost.
(3) Revenue from other services primarily consists of the sale of cab services, rail and bus tickets, income from Freight Forwarding Services, including commissions, is recognized on a net basis.
Other operating income primarily consists of advertising revenue, fees for facilitating website access to travel insurance companies and sales of travel vouchers and coupons. This revenue is recognized as the services are performed.
The Company receives upfront fee from Global Distribution System ("GDS") providers for facilitating the booking of airline tickets on its website or other distribution channels to travel agents for using their system which is recognised as revenue in the proportion of actual airline tickets sold over the total number of airline tickets expected to be sold over the term of the agreement, and the balance amount is recognised as deferred revenue.
Revenue is recognised, net of allowances for cancellations, refunds during the period and taxes.
In Fiscals 2023, 2022, and 2021, we generated, 46.82%, 58.09% and 71.19% of our revenues from operations from Air Ticketing, 38.03%, 25.85% and 12.48% of our revenues from Hotels and Packages and 4.06%, 7.38% and 2.50% of our revenues from operations from the sale of other services.
PRESENTATION OF FINANCIAL INFORMATION
The Restated Consolidated Summary Statement of Assets and Liabilities of the Group as at, March 31, 2023, March 31, 2022 and March 31, 2021 and the related Restated Consolidated Summary Statement of Profit and Loss (including Other Comprehensive Income), Restated Consolidated Summary Statement of Changes in Equity and Restated Consolidated Summary Statement of Cash Flows for the year ended March 31,2023 March 31, 2022 and March 31, 2021, Restated Consolidated Summary Statements - Accounting Policies, Statement of Restatement Adjustments to Audited Consolidated Financial Statements and Notes to Restated Consolidated
Summary Statements (hereinafter collectively referred to as "Restated Consolidated Summary Statement" have been prepared specifically for inclusion in this Red Herring Prospectus and Prospectus to be filed by the Company with the Securities and Exchange Board of India in connection with proposed Offer.
The Restated Consolidated Summary Statements have been prepared to comply in all material respects with the requirements of: a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (""the Act"").
b) Relevant provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("the SEBI ICDR Regulations") issued by the Securities and Exchange Board of India (SEBI) on September 11, 2018 as amended from time to time in pursuance of the Securities and Exchange Board of India Act, 1992.
c) Guidance note on Reports in Company Prospectuses (Revised 2019) ("Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI")."
The Restated Consolidated Summary Statements has been compiled from:
Audited consolidated financial statements of the Group as at and for the year ended March 31, 2023, which were prepared to comply in all material respects with the Indian Accounting Standard (‘Ind AS) notified under section 133 of the Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended, and other accounting principles generally accepted in India and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable, which have been approved by the Board of Directors at their meeting held on August 29, 2023;
Audited consolidated financial statements of the Group as at and for the year ended March 31, 2022, which were prepared to comply in all material respects with the Indian Accounting Standard (‘Ind AS) notified under section 133 of the Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto as amended, and other accounting principles generally accepted in India and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable, which have been approved by the Board of Directors at their meeting held on September 21, 2022;
Audited consolidated financial statements of the Group as at and for the year ended March 31, 2021, which were prepared to comply in all material respects with the Indian Accounting Standard (‘Ind AS) notified under section 133 of the Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments as amended, and other accounting principles generally accepted in India and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable thereto, which have been approved by the Board of Directors at their meeting held on November 29, 2021;
Further, consolidated statement of financial position and the related consolidated statements of profit or loss and other comprehensive loss, consolidated statement of changes in equity and consolidated cash flows of Yatra Online, Inc. is prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. There are differences in presentation of financial information as per Ind AS, and IFRS. For details, see "Risk Factors Significant differences exist between Ind AS and other accounting principles, such as Indian GAAP, U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of our financial condition." on page 71.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Trends and Changes in the Indian Economy and Travel Industry.
Our financial results have been, and are expected to continue to be, affected by trends and changes in the Indian economy and travel industry, particularly the Indian online travel industry. Macroeconomic trends and changes in India which may affect our results include, among others:
a slowdown in Indias economic growth;
growth in the middle-class population in India, as well as increased tourism expenditure in India;
increase in discretionary expenditures among Indian households;
increased Internet penetration (particularly broadband penetration) in India;
increased use of the Internet for commerce in India;
increased use of smartphones and mobile devices in India;
intensive competition from new and existing market players, particularly in the Indian online travel industry;
consolidation among the existing market players in the Indian travel industry;
changes in exchange rates and controls or interest rates in India;
changes in government policies, including taxation policies in India;
social and civil unrest and other political, social and economic developments in or affecting India; and
capacity additions and average occupancy rates among the hotel suppliers.
Impact of COVID-19 pandemic on our past financial results.
Changes specific to the Indian air travel industry have affected, and will continue to affect, the revenue per transaction for travel agents, including our company. In particular, volatility in global economic conditions, COVID-19 impact in previous years, as well as liquidity constraints, have caused our airline partners to pursue cost reductions in their operations, including reducing distribution costs. Measures taken by airlines to reduce such costs have included reductions in travel agent commissions and a reduction in the number of GDS service providers with whom such airlines do business. Recent bankruptcies have also impacted the Indian air travel industry. In addition, many of the international airlines that fly to India have also either significantly reduced or eliminated commissions to travel agents. Full-service airlines generally utilize GDSs, which are a primary reservation tool for travel agents, for their ticket inventory; however, low-cost airlines generally distribute their online supply exclusively through their own websites and other airlines have stopped providing inventory to certain online channels and attempt to drive customers to book directly on their websites by eliminating or limiting sales of certain airline tickets through third-party distributors. As a result, travel agents selling airline tickets for low-cost airlines generally do not earn fees from GDSs.
Changes in Our Business Mix and Net Margins
We generate revenue primarily through three main lines of business: (1) Air Ticketing, (2) Hotels and Packages and (3) Other Services. Income from the sale of Airline Tickets, including commission, incentives and fees, is recognized on a net commission earned basis. In our Hotels and Packages business, income from hotel reservations, including commissions and incentives, is recognized on a net commission earned basis. Revenue from other services primarily consists of the sale of cab services, rail and bus tickets, income from Freight Forwarding Services, including commissions, is recognized on a net basis. Our Hotels and Packages business has historically yielded higher margins than our Air Ticketing business. For Fiscal Year 2023, 2022 and 2021, we generated 46.82 %, 58.09% and 71.19% of our revenues from operations from Air Ticketing, and 38.03%, 25.85% and 12.48% of our revenues from Hotels and Packages, and 4.06%, 7.38% and 2.50% of our revenue from Other Services. Our adjusted margin from Hotels and Packages business for fiscals 2023, 2022 and 2011 were 13.06%, 17.18% and 19.71%, our adjusted margin % from Air Ticketing business for fiscals 2023, 2022 and 2021 were 7.69%, 8.00% and 11.44% and our adjusted margin from Other Services business for Fiscals 2023, 2022 and 2021 were 6.32%, 5.11% and 4.25%. We believe that as a result of the fragmented nature of the supply Hotels and Packages segment, the services we provide allow us to command better margins as compared with airline tickets, which are largely impacted by the macroeconomic factors noted above, such as fuel and consolidation in the airline industry. Further, additions of the inventory in the hotels business, as well as the lower level of average room occupancy rates, further contribute to our relatively higher Hotels and Packages margins, as compared to Air Ticketing margins. However, given the intense competition for customer acquisition in this category from our competitors, our business will require a significant level of investment to seek to maintain and increase our share of the hotels business. To the extent we do not match competition in consumer promotions, we risk experiencing lower growth rates than those of our competitors, which could result in a change in our business mix and margins.
Cost Efficiently Attracting New B2C Customers Through the B2E Channel and Expansion of Customer Base.
We operate through three go-to-market strategies spanning the entire travel value chain: B2C (business to consumer), B2E (business to enterprise) and B2B2C (business to business to consumer). We believe that the combination of our B2C and B2E channels enables us to target Indias most frequent and high spending travelers, namely, educated urban consumers, in a cost-effective manner. Accordingly, our growth depends significantly on our ability to attract new customers as well as retain and expand relationship with existing ones and is dependent upon acceptance by customers of our services and our ability to keep pace with technological changes. Through our B2E offerings, we serve business customers, including leading organizations from India and around the world, that employ over 7 million people. We believe that our broad and diverse offerings provide us with considerable cross-selling opportunities to these potential B2C clients. In addition, in order to incentivize B2E customers to become B2C customers, we operate our eCash loyalty program. As our B2E clients become more familiar with our offerings and our eCash program, we expect our opportunities to cross-sell to their employees will also expand. We believe this will allow us to continue to target and attract new B2C customers in a cost-effective manner. Although we believe this long-term strategy of cost-efficient B2C customer expansion will allow us to continue to grow our business, the impact of these efforts may take longer to develop than we expect. If we are unable to successfully take advantage of cross-selling opportunities or attract new B2C customers, the ongoing growth of our business may be negatively impacted.
Ability to enhance operating efficiency through investments in technology
Our results of operations have been, and will continue to be, affected by our ability to improve our operating efficiency, especially through investment in technology. Our business is based on a single common technology platform that serves our customers through multiple mobile applications as well as our website www.yatra.com. Our single common platform approach provides us with a scalable, comprehensive and consistent user experience across each of our three go-to-market channels. Our technology also contributes to the conversion of our business travelers to leisure travelers by creating a single and familiar platform as well as enabling loyalty programs such as our eCash program, available across all our channels and offerings. Going forward, we intend to continue to prudently invest resources in technology in a cost-effective manner to support the long-term growth of our business.
Customers in India are increasingly shifting to mobile usage. We are rapidly moving towards a ‘Mobile First business and have therefore been able to capitalize on the increasing mobile use, as evidenced by the rapid user growth on our platform with mobile being the primary channel for customers to engage with us. We have seen an increase in use of mobile as a driver for Gross Bookings and expect that as more of our customers shift to using mobile in India, this trend will continue to drive our growth.
Inorganic growth through strategic acquisitions
In addition to the organic growth of our operations, we have a track record of inorganic growth through strategic acquisitions that supplement our business verticals. In 2010, we acquired TSI Yatra Private Limited in order to expand our B2B2C business, particularly our international Air Ticketing for small and medium scale enterprises. Pursuant to share purchase agreement dated June 27, 2012, we acquired 100% stake in Yatra TG Stays Private Limited and Yatra Hotel Solutions Private Limited from TG India Holdings Company and Travelocity.com Private Limited. Further, pursuant to share purchase agreement dated July 20, 2017, as amended, our Company acquired 100% stake in Yatra For Business Private Limited (Formerly known as Air Travel Bureau Private Limited). Our Company has also acquired 100% stake in Travel.Co. In Private Limited, pursuant to share purchase agreement dated February 8, 2019 and acquired, the corporate travel business of PL Worldways We expect to continue making acquisitions and entering into new business ventures or initiatives as part of our strategy. For further details about our inorganic growth strategy, see "Our Business Strategies" on page 343. We believe that the effect of our acquisitions and the consolidation of the acquired entitys financial results in our consolidated financial statements will strengthen our financial performance. Given the fragmented nature of the travel industry, there exist opportunities for consolidation. Our successful and timely integration of such acquisitions will enable us to capture relevant synergies both from a technological and bottom-line perspective. We will seek to integrate such acquired businesses into our current operations in a manner that maximizes such synergies.
Seasonality in the Travel Industry
We experience seasonal fluctuations in the demand for travel services and products offered by us. We tend to experience higher revenues from our Hotels and Packages business in the second and fourth calendar quarters of each year, which coincide with the summer holiday travel season and the year-end holiday travel season for our customers in India. Following table represents the seasonal fluctuations in relation to passengers travelled and standalone hotel nights booked, for last three years:
| (count in 1,000) | ||||
| Details | June 30, 2020* | September 30, 2020* | December 31, 2020* | March 31, 2021* |
| Packages passenger travelled | 0.004 | 0.03 | 1.03 | 1.62 |
| Standalone hotel room nights booked | 15 | 39 | 199 | 294 |
*Impact on packages passengers travelled and standalone hotel room nights booked is on account of COVID-19 pandemic
| (count in 1,000) | ||||
| Details | June 30, 2021 | September 30, 2021 | December 31, 2021 | March 31, 2022 |
| Packages passenger travelled | 1.00 | 1.42 | 3.92 | 2.94 |
| Standalone hotel room nights booked | 70 | 289 | 342 | 317 |
| (count in 1,000) | ||||
| Details | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 |
| Packages passenger travelled | 4.49 | 4.35 | 5.29 | 5.30 |
| Standalone hotel room nights booked | 585 | 412 | 398 | 425 |
Marketing and Sales Promotion Expenses
Competition in the Indian online travel industry is extremely intense, and the industry is expected to remain highly competitive for the foreseeable future. Increased competition may cause us to increase our marketing and sales promotion expenses in the future in order to compete effectively with new entrants and existing players in the market, and we expect this competitive environment, and therefore our expenses, to change over time. We also incur customer inducement and acquisition costs and marketing and sales promotion expenses, including cash incentives and loyalty program incentive promotions.
| (in INR millions) | |||
| Customer inducement and acquisition costs and marketing and sales promotion expenses | Year ended March 31, 2023 | Year ended March 31, 2022 | Year ended March 31, 2021 |
| Customer inducement and acquisition costs (A) | 2,842.45 | 1,313.63 | 809.60 |
| Marketing and sales promotion expenses (B) | 336.39 | 124.14 | 79.60 |
| Total (C=A+B) | 3,178.84 | 1,437.77 | 889.20 |
Notes:
(1) Customer inducement and acquisition costs include costs for acquiring customers and promoting transactions across various booking platforms such as upfront cash incentives (2) Marketing and sales promotion expenses include online television, radio and print media advertisement costs as well as event driven promotion cost for the Groups products and services
Impact of Changing Laws, Rules and Regulations in India.
The regulatory and policy environment in which we operate is evolving and is subject to change. Such changes, including the instances briefly mentioned below, may adversely affect our business, financial condition and results of operations, to the extent that we are unable to suitably respond to and comply with such changes in applicable law and policy.
More than five years after implementation, the GST law is still an evolving statute. Amendments are being made to the law and various notifications and clarifications are being issued via government initiatives or court stated judgments. Particularly, with respect to compliances, there have been amendments in law which restricted the input tax credit available to a taxpayer for utilization and made it subject to declarations made by vendor of such taxpayer to the government in their tax returns. Further, amendments have been made to tax recovery and suspension of GST registration provisions as well.
The Indian government introduced electronic invoicing for GST invoices raised by a registered taxable person on another registered person ("B2B invoices"). As per these provisions, a registered person has been required to report a B2B invoice on Invoice Registration Portal of the government and obtain a unique Invoice Reference Number and thereafter convert it in a QR code and print it on the GST invoice.
Overall, GST has had a mixed impact on the Company. The decentralization of tax registration and related compliance have caused a significant increase in our compliance and audit requirements over the last two years. In addition to increased compliance costs, the Company is also paying GST taxes for hotel accommodation services provided by the unregistered hotels in each state where such unregistered hotels are located. While the Company is complying with the requirements of the GST regime, there are certain areas where clarity is still awaited, and the Company is in the process of finalizing tax positions while awaiting such clarity. The Company continues to closely monitor on regular basis the impact of the new indirect tax environment.
NON- GAAP MEASURES
As certain parts of our revenue are recognized on a "net" basis and other parts of our revenue are recognized on a "gross" basis, we evaluate our financial performance based on Adjusted Margin, which is a Non-GAAP measure.
We believe that Adjusted Margin provides investors with useful supplemental information about the financial performance of our business and more accurately reflects the value addition of the travel services that we provide to our customers. Our Adjusted Margin may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.
Reconciliation of Revenue to Adjusted Margin (a Non-GAAP measure)
Reconciliation of Revenue to Adjusted Margin - Air Ticketing
(INR millions)
| (INR millions) | |||
| Air ticketing | |||
| Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | |
| Revenue (Rendering of services) (A) | 1,779.98 | 1,150.47 | 893.10 |
| Customer inducement and acquisition costs (B) | 2,555.32 | 1,060.60 | 594.40 |
| Service cost (C) | - | - | - |
| Adjusted Margin - Air Ticketing D=(A+B-C) | 4,335.30 | 2,211.07 | 1,487.50 |
Reconciliation of Revenue to Adjusted Margin - Hotels and Packages
| Hotels and Packages | |||
| Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | |
| Revenue (Rendering of services) (A) | 1,445.61 | 512.07 | 156.60 |
| Customer inducement and acquisition costs (B) | 263.75 | 237.70 | 199.45 |
| Service cost (C) | (644.63) | (152.14) | (20.02) |
| Adjusted Margin - Hotels and Packages | 1,064.73 | 597.63 | 336.03 |
| D=(A+B-C) | |||
Reconciliation of Revenue to Adjusted Margin - Other Services
| (INR millions) | |||
| Other services | |||
| Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | |
| Revenue (Rendering of services) (A) | 154.32 | 146.16 | 31.40 |
| Customer inducement and acquisition costs (B) | 23.38 | 15.33 | 15.75 |
| (INR millions) | |||
| Other services | |||
| Service cost (C) | - | - | - |
| Adjusted Margin - Other Services (D=A+B-C) | 177.70 | 161.49 | 47.15 |
In addition to referring to Adjusted Margin, EBITDA, Adjusted EBITDA, Adjusted Margin (%), Adjusted profit/ (Loss), Adjusted EBITDA Margin, Adjusted EBITDA Margin %, Adjusted profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items, tax , share based payment expenses, and listing related expenses, Adjusted Basic Earnings/(loss), Adjusted Diluted Earnings/(loss), Net Worth, Return on Net Worth, Net Assets Value, Net Assets Value Per Share are non-GAAP measures (together, "Non-GAAP Measures"), presented in this Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or U.S. GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. For details, see
"Risk Factors - We have in this Red Herring Prospectus included certain Non-GAAP Measures and certain other industry measures related to our operations and financial performance. These Non-GAAP Measures and industry measures may not be comparable with financial, or industry related statistical information of similar nomenclature computed and presented by other companies." on page 62.
For our internal management reporting, budgeting and decision-making purposes, including comparing our operating results to that of our competitors, these Non-GAAP Measures exclude share-based payment expenses, re-measurement of contingent consideration, impairment of goodwill and intangible assets, impairment of loan to joint venture, listing and related expenses and change in fair value of warrants. Our Non-GAAP Measures reflect adjustments based on the following:
Share based payment expenses: The compensation cost is dependent on varying available valuation methodologies and subjective assumptions that companies can use while valuing these expenses especially when adopting Ind AS 2 "Share-based Payment". Thus, the management believes that providing Non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between our operating results and those of other companies.
Re-measurement of contingent consideration: The contingent consideration relates to the payment made under business combination agreement, based on the certain performance conditions of the acquired business.
Impairment of goodwill and intangible assets: The impairment cost is dependent on varying available valuation methodologies and subjective assumptions that companies can use while valuing the fair value of the assets on the balance sheet date. Thus, the management believes that providing Non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between our operating results and those of other companies.
Impairment of loan to joint venture - The impairment cost to be recorded is dependent on varying available valuation methodologies and subjective assumptions that companies can use while valuing the fair value of the assets on the balance sheet date. Thus, management believes that providing non-IFRS financial measures that exclude such expenses allows investors to make additional comparisons between our operating results and those of other companies.
Listing and related expenses - These primarily reflect the non-recurring expenses incurred in the Indian IPO process.
We evaluate the performance of our business after excluding the impact of above measures and believe it is useful to understand the effects of these items on our Loss from operations before share of loss from joint venture and tax, loss for the year and basic and diluted loss per share.
A limitation of using Adjusted EBITDA Profit/(Loss), Adjusted Profit/(Loss) from operations before share of (profit)/loss from joint venture, exceptional items, tax, share based payment expenses, and listing related expenses, Adjusted Profit/(Loss) for the year and Adjusted Basic and Adjusted Diluted Earnings/(Loss) Per Share as against using the measures in accordance with Ind AS issued by the ICAI are that these Non-GAAP financial measures exclude share-based payment expenses, re-measurement of contingent consideration, impairment of goodwill and intangible assets, impairment of loans to joint venture, Listing and related expenses and depreciation and amortization in case of Adjusted EBITDA Loss. Management compensates for this limitation by providing specific information on the Ind AS amounts excluded from Adjusted EBITDA Profit/(Loss), Adjusted Profit/(Loss) from operations before share of (Profit)/ loss from joint venture, exceptional items, tax, share based payment expenses, and listing related expenses, Profit/(Loss) for the year and Adjusted Basic and Adjusted Diluted Earnings/(Loss) Per Share.
The following table reconciles our Restated loss for the year (a GAAP measure) to Adjusted EBITDA (Loss) (a non-GAAP measure) for the years indicated:
Reconciliation of Restated profit/(loss) to EBITDA, EBITDA Margin, Adjusted EBITDA, and Adjusted EBITDA Margin
(In INR millions except percentage)
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| Restated Profit/(loss) for the year (A) | 76.32 | (307.86) | (1,188.63) |
| Tax expense/ (benefit) (B) | 45.46 | 15.15 | 66.30 |
| Restated Profit/(loss) before tax (C=A+B) | 121.78 | (292.71) | (1,122.33) |
| Adjustments: | |||
| Add: Finance Costs (D) | 234.10 | 99.46 | 102.41 |
| Add: Depreciation and Amortization (E) | 182.79 | 280.83 | 523.03 |
| Add: Interest income (Bank deposit and Others) (F) | (17.08) | (34.32) | (77.75) |
| Add: Unwinding of discount on other financial assets (G) | (3.33) | (3.15) | (2.70) |
| Add: Foreign exchange gain (net) (H) | (7.38) | (8.50) | 7.52 |
| Earnings before interest, taxes, depreciation and amortization | 510.88 | 41.61 | (569.82) |
| expenses (EBITDA) (I=C+D+E+F+G+H) | |||
| EBITDA Margin (I/O) | 13.44% | 2.10% | (45.42%) |
| Add: | |||
| Exceptional items (J) | 1.00 | 72.70 | 450.30 |
| Share based payment expenses (K) | 134.22 | 192.98 | 64.90 |
| Share of (profit)/ loss from joint venture (L) | - | (41.63) | 4.00 |
| Listing and related expenses (M) | 23.59 | 55.82 | - |
| Adjusted Earnings before interest, taxes, depreciation and amortization expenses (Adjusted EBITDA) (N=I+J+K+L+M) | 669.69 | 321.48 | (50.62) |
| Revenue from operations (O) | 3,801.60 | 1,980.66 | 1,254.50 |
| Adjusted EBITDA Margin (Adjusted EBITDA as a percentage | 17.62% | 16.23% | (4.04)% |
| of Revenue from operations) (P=N/O) | |||
The following table reconciles our Restated profit/loss from operations before share of loss from joint venture, exceptional items and tax (a GAAP measure) to Adjusted Profit/(Loss) from operations before share of (profit)/loss from joint venture, exceptional items, tax, share based payment expenses, and listing related expenses(a Non-GAAP measure) for the years indicated:
Reconciliation of Restated Profit/(Loss) from operations before share of (profit)/loss from joint venture, exceptional items and tax to Adjusted Profit/(Loss) from operations before share of (Profit)/loss from joint venture, tax, share based payment expenses, and listing related expenses
| (in INR millions) | |||
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Restated Profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items and tax (A) | 122.78 | (261.64) | (668.03) |
| Add: Share based payment expenses (B) | 134.22 | 192.98 | 64.90 |
| Add: Listing related expenses (C) | 23.59 | 55.82 | - |
| Adjusted Profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items, tax, share based payment expenses, and listing related expenses (D = A+B+C) | 280.59 | (12.84) | (603.13) |
The following table reconciles Restated profit/(loss) for the year (a GAAP measure) to Adjusted profit/(loss) for the year (a Non-GAAP measure) for the years indicated
Reconciliation of Restated Profit/(loss) for the year to Adjusted Profit/(loss)
| (in INR millions) | |||
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Restated Profit/ (Loss) for the year (A) | 76.32 | (307.86) | (1,188.63) |
| Add: Share-based payment expenses (B) | 134.22 | 192.98 | 64.90 |
| Add: Exceptional items (C) | 1.00 | 72.70 | 450.30 |
| Add : Listing and related expenses (D) | 23.59 | 55.82 | - |
| Adjusted profit/(Loss) for the year E=(A+B+C+D) | 235.13 | 13.64 | (673.43) |
The following table reconciles basic and diluted earnings/(loss) per share (a GAAP measure) to Adjusted Basic and Diluted earnings/loss Per Share (a Non-GAAP measure) for the years indicated:
Reconciliation of Basic earnings/(loss) (Per Share) to Adjusted Basic Earnings/Loss (Per Share)
| (in INR million, unless otherwise stated) | |||
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Basic earnings/(loss) per share (A) | 0.69 | (2.76) | (11.08) |
| Add: Share-based payment expenses (B) | 1.19 | 1.73 | 0.60 |
| Add :Exceptional Items (C) | 0.01 | 0.65 | 4.20 |
| Add : Listing and related expenses (D) | 0.21 | 0.50 | - |
| Adjusted Basic earnings/(loss) Per Share E= (A+B+C+D) | 2.10 | 0.12 | (6.28) |
Reconciliation of Diluted Earnings/(loss) (Per Share) to Adjusted Diluted Earnings/Loss (Per Share)
(In INR million, unless otherwise stated)
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Diluted Earnings/(loss) per share (A) | 0.69 | (2.76) | (11.08) |
| Add: Share-based payment expenses (B) | 1.19 | 1.73 | 0.60 |
| Add :Exceptional Items (C) | 0.01 | 0.65 | 4.20 |
| Add : Listing and related expenses (D) | 0.21 | 0.50 | 0.00 |
| Adjusted Basic earnings/(loss) per share E= (A+B+C+D) | 2.10 | 0.12 | (6.28) |
Reconciliation of Net Worth and Return on Net Worth to Total Assets
The table below reconciles return on net worth to total assets. Return on net worth is calculated as profit / loss for the year divided by net worth.
| (in INR millions except percentages) | |||
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Total assets (A) | 6,812.50 | 5,477.81 | 5,629.08 |
| Total liabilities (B) | 5,117.27 | 4,468.53 | 4,394.22 |
| (in INR millions except percentages) | |||
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Net Worth (A-B) | 1,695.23 | 1,009.28 | 1,234.86 |
| Restated Profit/(loss) for the year (C) | 76.32 | (307.86) | (1,188.63) |
| Return on net worth (%) (C/(A-B)) | 4.50% | (30.50%) | (96.26%) |
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
We commenced our business in 2006 with sales of airline tickets in our Air Ticketing business and our Hotels and Packages business with a focus on retail customers (B2C) through websites and call center sales. Over time, we have expanded our channels of sales to small travel agents (B2B2C) and corporate customers (B2E) as well as new services and products such as the sale of rail and bus tickets, income from freight forwarding business, car transfers and facilitating access to travel insurance. We also generate advertising revenue from third-party advertisements on our websites as well as sales of travel vouchers and coupons.
Total Income
Our total income comprises: (i) revenue from operations; and (ii) other income.
Revenue from Operations
Revenue from operations comprises sale of services that includes our Air Ticketing, Hotels and Packages and Other Services.
Air Ticketing. We earn commissions from airlines for tickets booked by customers through our various channels of sales. We either deduct commissions at the time of payment of the fare to our airline suppliers or collect our commissions on a regular basis from our airline suppliers, whereas incentive payments, which are largely based on volume of business, are collected from our airline suppliers on a periodic basis. We charge our customers a service fee for booking airline tickets. We receive fees from our GDS service providers based on the volume of sales completed by us through the GDS. Revenue from airline tickets sold as part of packages is included in our Hotels and Packages revenue. Hotels and Packages. Revenue from our Hotels and Packages business includes commissions and markups we earn for the sale of hotel rooms (without packages), which is recorded on a "net" basis. Revenue from packages, including hotel and airline tickets sold as part of packages, is accounted for on a "gross" basis.
Other Services. Revenue from other services primarily comprises of revenue from sale of rail and bus tickets and Revenue from Freight Forwarding Business. Revenue from the sale of rail and bus tickets is recognized as an agent on a net commission earned basis. Revenue related to our Freight Forwarding Business is recognized at the time of departure of the cargo at the origin in case of exports. In case of Imports, revenue is recognized on the basis of arrival dates. We act as an agent and accordingly we recognize revenue only for our commission on the arrangement.
Other operating income
Revenue from Other, primarily comprising advertising revenue, income from sale of coupons and vouchers and fees for facilitating website access to travel insurance companies are being recognized as the services are being performed
Other Income
Other Income primarily comprises: (A) gain on sale of property, plant and equipment (net); (B) gain on termination/ rent concession of leases; (C) government grants; (E) liability no longer required written back and (F) miscellaneous income.
Expenses
Our expenses comprise: (i) service cost; (ii) employee benefits expense; (iii) marketing and sales promotion expenses; (iv) depreciation and amortisation expense; (v) impairment of goodwill and intangible assets; (vi) finance cost; (vii) other expenses; (viii) impairment of loan to joint venture; and (ix) listing and related expenses.
Service Cost
Service cost primarily consists of costs paid to hotels and package suppliers and air suppliers for the acquisition of relevant services and products for sale to customers, and includes the procurement cost of hotel rooms, air tickets, meals and other local services such as sightseeing costs for packages, entrance fees to museums and attractions and local transport costs.
Employee Benefit Expenses
Employee benefits expenses comprise: (i) salaries and wages; (ii) contribution to provident and other funds; (iii) staff welfare expenses; (iv) employee compensation expenses, and (v) Share based payment expenses.
Marketing and Sales Promotion Expenses
Marketing and sales promotion expenses primarily comprise of online, television, radio and print media advertisement costs as well as event driven promotion cost for the companys products and services. Such costs are the amount paid to or accrued towards advertising agencies or direct service providers for advertising on websites, television, print formats, search engine marketing and any other media. Advertising and business promotion costs are recognized when incurred.
Other Operating Expenses
Other operating expenses primarily consist of, among other things, commission and distribution expenses, charges by payment gateway providers, rental costs and other utilities, legal and professional fees, traveling and conveyance, communication costs, trade and other receivables provision and advance provision and other sundry expenses.
Depreciation and Amortization
Depreciation consists primarily of depreciation expense recorded on property and equipment, such as computers and peripherals, furniture and fixtures, leasehold improvements, office equipment and vehicles. Amortization expense consists primarily of amortization recorded on intangible assets such as computer software and websites and other acquired intangible assets such as agent/supplier relationships, trademarks, intellectual property rights and non-compete agreements. Amortisation of use of assets primarily consists of amortization of Right-of-use assets created on premises taken by the Company on lease, motor vehicles and others.
Finance Expense
Finance expenses comprise of interest expense on borrowings on bank or otherwise, interest on lease liability and bank charges. Interest expense is recognized in profit or loss, using the effective interest method.
RESULTS OF OPERATIONS
FISCAL 2023 COMPARED TO FISCAL 2022
The following table sets forth certain information with respect to our results of operations for Fiscal 2023 and 2022:
| (INR millions except percentages) | ||||
| Fiscal 2023 | Fiscal 2022 | |||
| Particulars | (INR million) | % of total income | (INR million) | % of total income |
| Income | ||||
| Revenue from operations | 3,801.60 | 96% | 1,980.66 | 91% |
| Other income | 173.05 | 4% | 207.44 | 9% |
| Total income | 3,974.65 | 100% | 2,188.10 | 100% |
| Expenses | ||||
| Service cost | 644.63 | 16% | 152.14 | 7% |
| Employee benefit expenses | 1,090.08 | 27% | 976.06 | 45% |
| (INR millions except percentages) | ||||
| Fiscal 2023 | Fiscal 2022 | |||
| Particulars | (INR million) | % of total income | (INR million) | % of total income |
| Marketing and sales promotion expenses | 336.39 | 8% | 124.14 | 6% |
| Depreciation and amortisation | 182.79 | 5% | 280.83 | 13% |
| Finance costs | 234.10 | 6% | 99.46 | 5% |
| Other expenses | 1,340.29 | 34% | 761.29 | 35% |
| Listing and related expenses | 23.59 | 1% | 55.82 | 3% |
| Total expenses | 3,851.87 | 97% | 2,449.74 | 112% |
| Restated Profit/(loss) from operations before share of | 122.78 | 3% | (261.64) | (12%) |
| (Profit)/loss from joint venture, exceptional items and tax | ||||
| Share of (profit)/ loss from joint venture | - | 0% | (41.63) | (2%) |
| Restated Profit/(loss) before exceptional items and tax | 122.78 | 3% | (220.01) | (10%) |
| Exceptional items | 1.00 | 0% | 72.70 | 3% |
| Restated Profit/(loss) before tax | 121.78 | 3% | (292.71) | (13%) |
| Tax expense/ (benefit) | ||||
| Current tax expense | 50.67 | 1% | 13.17 | 1% |
| Deferred tax expense/ (benefit) | (5.21) | 0% | 1.98 | 0% |
| 45.46 | 1% | 15.15 | 1% | |
| Restated Profit/(loss) for the year | (76.32) | (2%) | (307.86) | (14%) |
| Other comprehensive income | ||||
| Items that will not be reclassified subsequently to profit or loss | ||||
| Remeasurement (gain)/ loss on defined benefit plan | 10.32 | 0% | 0.37 | 0% |
| Income tax expense/ (gain) related to items that will not be reclassified through profit or loss | 0.14 | 0% | - | 0% |
| Other comprehensive income for the year, net of income tax | 10.45 | 0% | 0.37 | 0% |
| Total comprehensive income for the year | 65.87 | 2% | (308.23) | (14%) |
Results of Fiscal Year Ended March 31, 2023 Compared to Fiscal Year Ended March 31, 2022
Total Income
Total income increased by 81.65% from INR 2,188.10 million in Fiscal 2022 to INR 3,974.65 million in Fiscal 2023 primarily due to recovery in both our consumer and corporate travel business due to the diminishing impact of COVID-19 as compared to the corresponding period of March 31, 2022, and an accrual of threshold bonus for GDS contracts in the year ended March 31, 2023.
Revenue from operations: We generated revenue of INR 3,801.60 million in the year ended March 31, 2023, an increase of 91.94% compared with INR 1,980.66 million in year ended March 31, 2022. Increase in revenue was primarily due to recovery in both our consumer and corporate travel business due to the diminishing impact of COVID-19 as compared to the corresponding period of March 31, 2022, and an accrual of threshold bonus for GDS contracts in the year ended March 31, 2023. Air Ticketing: Revenue from our Air Ticketing Business was INR 1,779.98 million in the year ended March 31, 2023, against INR 1,150.47 million in the year ended March 31, 2022.
Adjusted Margin from our Air Ticketing business increased to INR 4,335.30 million in the year ended March 31, 2023, against INR 2,211.07 million in the year ended March 31, 2022. In the year ended March 31, 2023, Adjusted Margin for our Air Ticketing business includes the addition of INR 2,555.32 million in the year ended March 31, 2023, against INR 1,060.60 million in the year ended March 31, 2022, of consumer promotion and loyalty program costs, which reduced revenue as per IndAS 115. The recovery in revenue and Adjusted Margin is on account of volume growth, an accrual of threshold bonus for GDS contracts and additional incentives from suppliers due to increases in travel demand.
Hotels and Packages: Revenue from our Hotels and Packages business was INR 1,445.61 million in the year ended March 31, 2023, against INR 512.07 million in the year ended March 31, 2022.
Adjusted Margin for this business increased by 78.16% to INR 1,064.73 million in the year ended March 31, 2023, from INR 597.63 million in the year ended March 31, 2022. In the year ended March 31, 2023, Adjusted Margin for our Hotels and Packages business includes the add-back of INR 263.75 million against INR 237.70 million in the year ended March 31, 2022, of customer promotional expenses, which had been reduced from revenue as per IndAS 115. The increase in revenue and Adjusted Margin in the year ended March 31, 2023 is on account of recovery in domestic travel, along with addition of new corporate customers and expansion of our distribution channels. The reduction in adjusted margin % is on account of change in the mix in favour of packages.
Other services: Our income from other services was INR 154.32 million in the year ended March 31, 2023, an increase from INR 146.16 million in the year ended March 31, 2022.
Adjusted Margin for this business increased by 10.04% to INR 177.70 million in the year ended March 31, 2023 from INR 161.49 million in the year ended March 31, 2022. In the year ended March 31, 2023, Adjusted Margin includes add-back of INR 23.38 million in the year ended March 31, 2022 against INR 15.33 million in the year ended March 31, 2022 of consumer promotion expenses, which had been reduced from revenue as per Ind AS 115. This increase in revenue from other services like rail, bus and car is partially offset by decrease in our freight forwarding business revenue.
Other operating income. Our other operating income was INR 421.69 million in the year ended March 31, 2023, an increase from INR 171.96 million in the year ended March 31, 2022
Other Income: Our other income decreased to INR 173.05 million in the year ended March 31, 2023 from INR 207.44 million in the year ended March 31, 2022 due to impact of write back of liabilities offset.
Service Cost: Our service cost increased to INR 644.63 million in the year ended March 31, 2023 from INR 152.14 million in the year ended March 31, 2022 primarily due to higher package sales in the year ended March 31, 2023, on account of recovery in the consumer travel markets.
Employee Benefit Expenses: Our employee benefit expenses increased by 11.68% to INR 1,090.08 million in the year ended March 31, 2023, from INR 976.06 million in the year ended March 31, 2022. Excluding share-based payment expenses of INR 134.22 million in the year ended March 31, 2023 from INR 192.98 million in the year ended March 31, 2022, personnel expenses increased by 22.06% in the year ended March 31, 2023 due to the impact of the reinstatement of salaries for employees to pre-pandemic levels and annual salary increase, along with increase in headcount.
Marketing and Sales Promotion Expenses: Marketing and sales promotion expenses increased by 170.98% to INR 336.39 million in the year ended March 31, 2023 from INR 124.14 million in the year ended March 31, 2022. Adding back the expenses for consumer promotions and loyalty program costs, which have reduced revenue per IndAS 115, our customer inducement and acquisition costs and marketing and sales promotion expenses is INR 3,178.84 million against INR 1,437.77 million in the year ended March 31, 2022, or a 121.10% an increase year-over-year.
Other Expenses: Other expenses increased by 76.06% to INR 1,340.29 million in the year ended March 31, 2023, from INR 761.29 million in the year ended March 31, 2022, primarily due to increase in commissions, legal and professional charges, bad debts written off and provision for doubtful debts and payment gateway charge.
Earnings before interest, taxes, depreciation and amortization expenses (EBITDA) and Adjusted Earnings before interest, taxes, depreciation and amortization expenses (Adjusted EBITDA):
Due to the forgoing factors, EBITDA improved by 1,127.81% to INR 510.88 million in the year ended March 31, 2023 from INR 41.61 million in the year ended March 31, 2022. Also, Adjusted EBITDA increased by 108.31% to INR 669.69 million in the year ended March 31, 2023, from Adjusted EBITDA of INR 321.48 million in the year ended March 31, 2022.
Depreciation and Amortization: Our depreciation and amortization expenses decreased by 34.91% to INR 182.79 million in the year ended March 31, 2023, from INR 280.83 million in the year ended March 31, 2022, primarily due to an increase in fully depreciated and amortized assets in the year ended March 31, 2023.
Restated profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items and tax: As a result of the foregoing factors, our restated profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items and tax was INR 122.78 million in the year ended March 31, 2023 as compared to restated loss of INR 261.64 million in the year ended March 31, 2022. Adjusted profit/(loss) from operations before share of (profit)/ loss from joint venture, exceptional items, tax, share based payment expenses, and listing related expenses is INR 280.59 million for year ended March 31, 2023 as compared to loss of INR 12.84 million for year ended March 31, 2022.
Share of (profit)/loss from Joint Venture: This amount pertains to a reversal of the cumulative loss contribution relating to a joint venture investment that operates in adventure travel activities and represents a true-up of provision created by the Company as per the joint venture agreement post impairment of a loan to the joint venture. Our loss from this joint venture is Nil in the year ended March 31, 2023 from profit of INR 41.63 million in the year ended March 31, 2022.
Finance Costs: Our finance costs increased to INR 234.10 million, including interest on the lease liability of INR 36.12 million in the year ended March 31, 2023, as compared to INR 99.46 million includes interest on lease liabilities of INR 43.56 million in the year ended March 31, 2022. The increase was due to increase in interest on borrowings and increase in borrowings.
Listing and related expenses. Listing and related expenses relate to the expenses incurred in connection with the IPO. During the year ended March 31, 2023, the Company has incurred INR 23.59 million as compared to INR 55.82 million in the year ended March 31, 2022
Tax expense/ (benefit): Our income tax expense during the year ended March 31, 2023 was INR 45.46 million compared to an expense of INR 15.15 million during the year ended March 31, 2022.
Restated profit/(loss) for the Year: As a result of the foregoing factors, our restated profit during the year ended March 31, 2023 was INR 76.32 million as compared to a restated loss of INR 307.86 million in the year ended March 31, 2022. Excluding the employee share-based compensation costs, listing related expenses and exceptional items the restated adjusted profit would have been INR 235.13 million for year ended March 31, 2023 and INR 13.64 million for year ended March 31, 2022.
Basic earnings/(loss) per share: Basic earnings per share was INR 0.69 in the year ended March 31, 2023 as compared to basic earnings per share of INR (2.76) in the year ended March 31, 2022. After excluding the share-based payment expense, listing related expenses and exceptional items, adjusted basic earnings per share would have been INR 2.10 in the year ended March 31, 2023, as compared to adjusted basic earnings per share INR 0.12 in the year ended March 31, 2022.
Diluted earnings/(loss) per share: Diluted earnings per share was INR 0.69 in the year ended March 31, 2023 as compared to basic earnings per share of INR (2.76) in the year ended March 31, 2022. After excluding the share-based payment expense, listing related expenses and exceptional items, adjusted diluted earnings per share would have been INR 2.10 in the year ended March 31, 2023, as compared to adjusted diluted earnings per share INR 0.12 in the year ended March 31, 2022.
Liquidity: As of March 31, 2023, the balance of cash and cash equivalents and other bank balance reduced to INR 1,028.86 million from INR 1,279.75 million as at March 31, 2022.
FISCAL 2022 COMPARED TO FISCAL 2021
The following table sets forth certain information with respect to our results of operations for Fiscal 2022 and 2021:
(INR millions except percentages)
| Fiscal 2022 | Fiscal 2021 | |||
| Particulars | (INR million) | % of total income | (INR million) | % of total income |
| Income | ||||
| Revenue from operations | 1,980.66 | 91% | 1,254.50 | 87% |
| Other income | 207.44 | 9% | 181.66 | 13% |
(INR millions except percentages)
| Fiscal 2022 | Fiscal 2021 | |||
| Particulars | (INR million) | % of total income | (INR million) | % of total income |
| Total income | 2,188.10 | 100% | 1,436.16 | 100% |
| Expenses | ||||
| Service cost | 152.14 | 7% | 20.02 | 1% |
| Employee benefit expenses | 976.06 | 45% | 736.33 | 51% |
| Marketing and sales promotion expenses | 124.14 | 6% | 79.60 | 6% |
| Depreciation and amortisation | 280.83 | 13% | 523.03 | 36% |
| Finance costs | 99.46 | 5% | 102.41 | 7% |
| Other expenses | 761.29 | 35% | 642.80 | 45% |
| Listing and related expenses | 55.82 | 3% | - | |
| Total expenses | 2,449.74 | 112% | 2,104.19 | 147% |
| Restated Profit/(loss) from operations before share of | (261.64) | (12%) | (668.03) | (47%) |
| (Profit)/loss from joint venture, exceptional items and tax | ||||
| Share of (profit)/ loss from joint venture | (41.63) | (2%) | 4.00 | 0% |
| Restated Profit/(loss) before exceptional items and tax | (220.01) | (10%) | (672.03) | (47%) |
| Exceptional items | 72.70 | 3% | 450.30 | 31% |
| Restated Profit/(loss) before tax | (292.71) | (13%) | (1,122.33) | (78%) |
| Tax expense/ (benefit) | ||||
| Current tax expense | 13.17 | 1% | 6.40 | 0% |
| Deferred tax expense/ (benefit) | 1.98 | 0% | 59.90 | 4% |
| 15.15 | 1% | 66.30 | 5% | |
| Restated Profit/(loss) for the year | (307.86) | (14%) | (1,188.63) | (83%) |
| Other comprehensive income | ||||
| Items that will not be reclassified subsequently to profit or loss | ||||
| Remeasurement (gain)/ loss on defined benefit plan | 0.37 | 0% | (1.80) | 0% |
| Income tax expense/ (gain) related to items that will not be reclassified through profit or loss | - | 0% | (0.20) | 0% |
| Other comprehensive income for the year, net of income tax | 0.37 | 0% | (2.00) | 0% |
| Total comprehensive income for the year | (308.23) | (14%) | (1,186.63) | (83%) |
Total Income
Total income increased by 52.36% from INR 1,436.16 million in the year ended March 31, 2021 to INR 2,188.10 million in the year ended March 31, 2022. The increase in Revenue was primarily due to recovery in domestic travel demand relative to the year ended March 31, 2021.
Revenue from Operations: We generated revenue of INR 1,980.66 million in the year ended March 31, 2022, an increase of 57.89% compared with INR 1,254.50 million in year ended March 31, 2021. The increase in Revenue was primarily due to recovery in domestic travel demand relative to the year ended March 31, 2021.
Air Ticketing: Revenue from our Air Ticketing Business was INR 1,150.47 million in the year ended March 31, 2022, against INR 893.10 million in the year ended March 31, 2021.
Adjusted Margin from our Air Ticketing Business increased to INR 2,211.07 million in the year ended March 31, 2022, against INR 1,487.50 million in the year ended March 31, 2021. In the year ended March 31, 2022, Adjusted Margin for our Air Ticketing Business includes the addition of INR 1,060.60 million in the year ended March 31, 2022 against INR 594.40 million in the year ended March 31, 2021, of consumer promotion and loyalty program costs, which reduced revenue as per Ind AS 115. The increase is due to a continued recovery in domestic travel demand in the fiscal year ended March 31, 2022
Hotels and Packages: Revenue from our Hotels and Packages business was INR 512.07 million in the year ended March 31, 2022, against INR 156.60 million in the year ended March 31, 2021.
Adjusted Margin for this business increased by 77.85% to INR 597.63 million in the year ended March 31, 2022, from INR 336.03 million in the year ended March 31, 2021. In the year ended March 31, 2022, Adjusted Margin for Hotels and Packages business includes the add-back of INR 237.70 million against INR 199.45 million in the year ended March 31, 2021, of customer promotional expenses, which had been reduced from revenue as per Ind AS 115. The increase in Adjusted Margin from Hotels and Packages is due to recovery in domestic travel demand relative to the fiscal year ended March 31, 2021.
Other Services: Our revenue from other services was INR 146.16 million in the year ended March 31, 202, an increase from INR 31.40 million in the year ended March 31, 2021. Adjusted margin for this business increased by 242.51% to INR 161.49 million in the year ended March 31, 2021 from INR 47.15 million in the year ended March 31, 2021. In the year ended March 31, 2022, Adjusted margin includes add-back of INR 15.33 million in the year ended March 31, 2022 against INR 15.75 million in the year ended March 31, 2021 of customer inducement and acquisition expenses, which had been reduced from revenue as per IND AS 115. This increase in Adjusted Margin is primarily due to increase in our freight forwarding business revenue.
Other operating income. Our other operating income was INR 171.96 million in the year ended March 31, 2022, a decrease from INR 173.40 million in the year ended March 31, 2021.
Other Income: Our other income increased to INR 207.44 million in the fiscal year ended March 31, 2022, from INR 181.66 million in the fiscal year ended March 31, 2021, due to the impact of write back of liabilities offset.
Service Cost: Our service cost increased to INR 152.14 million in the year ended March 31, 2022 from INR 20.02 million in the year ended March 31, 2021 primarily due to increased sales of holiday packages on account of strong recovery in domestic travel demand in India during the fiscal year ended March 31, 2022.
Employee Benefit Expenses: Our employee benefit expenses increased by 32.56% to INR 976.06 million in the year ended March 31, 2022, from INR 736.33 million in the year ended March 31, 2021. This increase was due to the impact of the addition of personnel in the Yatra Freight business and the gradual reinstatement of salaries for mid and junior level employees to pre-pandemic levels. Excluding share-based payment expenses of INR 192.98 million in the year ended March 31, 2022, from INR 64.90 million in the year ended March 31, 2021, personnel expenses increased by 16.63% in the year ended March 31, 2022.
Marketing and Sales Promotion Expenses: Marketing and sales promotion expenses increased by 55.95% to INR 124.14 million in the year ended March 31, 2022, from INR 79.60 million in the year ended March 31, 2021. Adding back the expenses for consumer promotions and loyalty program costs, which have reduced revenue per Ind AS 115. Our customer inducement and acquisition costs and marketing and sales promotion expenses is INR 1,437.77 million against INR 889.20 million in the year ended March 31, 2021, which is a 61.69% an increase year-over-year.
Other Expenses: Other expenses increased by 18.43% to INR 761.29 million in the year ended March 31, 2022, from INR 642.80 million in the year ended March 31, 2021, primarily due to increase in legal and professional charges, payment gateway charges and commission & discount which is partially offset by decrease in bad debts written-off and allowance for credit impaired receivables.
Earnings before interest, taxes, depreciation and amortization expenses (EBITDA) and Adjusted Earnings before interest, taxes, depreciation and amortization expenses (Adjusted EBITDA):
Due to the foregoing factors, EBITDA improved by 107.30% to INR 41.61 million in the year ended March 31, 2022 from INR (569.82) million in the year ended March 31, 2021. Also, adjusted EBITDA improved by 735.05% to INR 321.48 million in the year ended March 31, 2022 from an EBITDA of INR (50.62) million in the year ended March 31, 2021.
Depreciation and Amortization: Our depreciation and amortization expenses decreased by 46.31% to INR 280.83 million in the year ended March 31, 2022, from INR 523.03 million in the year ended March 31, 2021 primarily as a result of amortization of intangible assets based on re-assessment of carrying value of the acquired intangible assets year ended March 31, 2021.
Exceptional items. Pertains to impairment of loan to joint venture of INR 72.70 million in the year ended March 31, 2022 and impairment of goodwill of INR 450.31 million in the year ended March 31, 2021. As a result of the significant negative impact related to the COVID-19 pandemic on the travel industry, we concluded that sufficient indicators existed to require us to perform a quantitative assessment of goodwill and, following that assessment, we recorded an impairment charge of our goodwill.
Restated profit/(loss) from operations before share of (profit)/loss from joint venture, exceptional items and tax:
As a result of the foregoing factors, our restated loss from operations before share of (profit)/loss from joint venture, exceptional items and tax was INR 261.64 million in the year ended March 31, 2022. Our restated loss for the year ended March 31, 2021 was INR 668.03 million. Excluding the share-based payment expense and listing related expenses, adjusted restated loss from operations before share of (profit)/loss from joint venture, exceptional items and tax would have been INR 12.84 million for year ended March 31, 2022 as compared to INR 603.13 million for year ended March 31, 2021.
Share of profit/(Loss) from Joint Venture: This amount pertains to a reversal of the cumulative loss contribution relating to a joint venture investment that operates in adventure travel activities and represents a true-up of provisions created by the Company as per the joint venture agreement post impairment of a loan to the joint venture. During Fiscal 2022, we have reversed the liability on account of obligation arising due to contribution towards losses of the joint venture. Our gain from this joint venture is INR 41.63 million in the year ended March 31, 2022 compared to a loss of INR 4.0 million in the year ended March 31, 2021.
Finance Costs: Our finance costs decreased to INR 99.46 million includes interest on lease liabilities of INR 43.56 million in the year ended March 31, 2022, as compared to INR 102.41 million includes interest on the lease liabilities of INR 69.21 million in the year ended March 31, 2021. The decrease was due to decrease in interest on lease liabilities which is partially offset by increase in interest on borrowings.
Listing and related expenses. Listing and related expenses relate to the expenses incurred in connection with the IPO. During the year ended March 31, 2022, INR 55.82 million is charged to the restated Statement of profit and loss
Tax expense/ (benefit): Our income tax expense during the year ended March 31, 2022 was INR 15.15 million compared to an expense of INR 66.30 million during the year ended March 31, 2021.
Restated profit/(loss) for the year. As a result of the foregoing factors, our restated loss in the year ended March 31, 2022 was INR 307.86 million as compared to a loss of INR 1,188.63 million in the year ended March 31, 2021. Excluding the share-based payment expense, listing related expenses and exceptional items, the adjusted restated profit would have been INR 13.64 million for year ended March 31, 2022 and INR 673.43 million loss for year ended March 31, 2021.
Basic earnings/(loss) per share. Basic earnings per share were INR (2.76) in the year ended March 31, 2022 as compared to basic loss per share of INR (11.08) in the year ended March 31, 2021. After excluding the share-based payment expense, listing related expenses, impairment of goodwill and intangible assets, adjusted basic earnings per share would have been INR 0.12 in the year ended March 31, 2022, as compared to loss of INR (6.28) in the year ended March 31, 2021.
Diluted earnings/(loss) per share. Diluted earnings per share was INR (2.76) in the year ended March 31, 2022 as compared to diluted loss per share of INR (11.08) in the year ended March 31, 2021. After excluding the share-based payment expense, listing related expenses, impairment of goodwill and intangible assets, adjusted diluted earnings per share would have been INR 0.12 in the year ended March 31, 2022, as compared to loss of INR (6.28) in the year ended March 31, 2021.
Liquidity: As of March 31, 2022, the balance of cash and cash equivalents and term deposits decreased to INR 1,279.75 million from INR 1,982.16 million as at March 31, 2021.
LIQUIDITY AND CAPITAL RESOURCES
We finance our operations and capital requirements primarily through cash flows from operations and borrowings under credit facilities from certain banks. We believe that our credit facilities, together with cash generated from our operations and a portion of the funds already raised will be sufficient to finance our working capital needs for next 12 months. We expect that these sources will continue to be our principal sources of cash in the medium term. However, there can be no assurance that additional financing will be available, or if available, that it will be available on terms acceptable to us.
CASH FLOWS
The following table sets forth certain information relating to our cash flows in the years indicated:
(INR millions)
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| Net cash flow from/ (used in) operating activities (A) | (1,530.60) | (833.86) | 1,041.05 |
| Net cash flow used in investing activities (B) | (166.74) | (84.45) | (211.09) |
| Net cash flow from financing activities (C ) | 1,384.20 | 200.81 | 64.58 |
| Net increase/ (decrease) in cash and cash equivalents D=(A+B+C) | (313.13) | (717.50) | 894.54 |
| Cash and cash equivalents as at the end of year | 469.02 | 758.61 | 1,471.93 |
Net cash from / (used in) operating activities
Our net cash used in operating activities was INR 1,530.60 million in the fiscal year ended March 31, 2023, as compared to net cash used in operating activities of INR 833.86 million in the fiscal year ended March 31, 2022, an increase in cash usage of INR 696.74 million in the fiscal year ended March 31, 2023. Our net profit adjusted for interest, tax, amortization and depreciation and other non-cash items was INR 500.81 million in the fiscal year ended March 31, 2023. Further, in the fiscal year ended March 31, 2023, there was an increase in our working capital of INR 1,905.31 million, as compared to an increase in working capital of INR 933.06 million in the fiscal year ended March 31, 2022. The increase in working capital in the fiscal year ended March 31, 2023, was primarily due to an INR 1,082.31 million increase in trade receivables, increase in contract assets by INR 190.50 million, increase in other financial and non-financial assets by INR 323.62 million and decrease in other financial and non-financial liabilities by INR 399.98 million. The increase in working capital in the fiscal year ended March 31, 2022, was primarily due to an INR 983.41 million increase in trade receivables, decrease in other financial and non-financial liabilities of INR 385.50 million which was partially offset by an INR 463.60 million increase in trade payables.
Our net cash used in operating activities was INR 833.86 million in the fiscal year ended March 31, 2022, as compared to net cash from operating activities of INR 1,041.05 million in the fiscal year ended March 31, 2021, an increase in cash usage of INR 1,874.91 million in the fiscal year ended March 31, 2022. Our net loss adjusted for interest, tax, amortization and depreciation and other non-cash items was INR 69.16 million in the fiscal year ended March 31, 2022. Further, in the fiscal year ended March 31, 2022, there was an increase in our working capital of INR 933.06 million, as compared to a decrease in working capital of INR 857.76 million in the fiscal year ended March 31, 2021. The increase in working capital in the fiscal year ended March 31, 2022, was primarily due to an INR 983.41 million increase in trade receivables, decrease in other financial and non-financial liabilities of INR 385.50 million which was partially offset by an INR 463.60 million increase in trade payables. The decrease in working capital in the fiscal year ended March 31, 2021, was primarily due to an INR 1,286.31 million decrease in trade receivables, increase in other financial and non-financial assets by INR 410.67 million which was partially offset by an INR 495.81 million decrease in the other financial and non-financial liabilities and settlement of contingent consideration by an INR 389.62 Million.
Net cash used in investing activities
During the fiscal year ended March 31, 2023, cash used in investing activities was INR 166.74 million, as compared to cash used in investing activities, which was INR 84.45 million in the fiscal year ended March 31, 2022. During the fiscal year ended March 31, 2023, we invested INR 28.72 million in other bank balances and invested an incremental INR 144.51 million in property plant and equipment and in software and technology related development projects. We also interest received on our other bank balance of INR 6.49 million in the fiscal year ended March 31, 2023, as compared to INR 20.70 million in the fiscal year ended March 31, 2022.
During the fiscal year ended March 31, 2022, cash used in investing activities was INR 84.45 million, as compared to cash used in investing activities was INR 211.09 million in the fiscal year ended March 31, 2021. During the fiscal year ended March 31, 2022, we invested INR 6.92 million in other bank balances, invested an incremental INR 98.23 million in property plant and equipment and in software and technology related development projects.
We also interest received on our other bank balance of INR 20.70 million in the fiscal year ended March 31, 2022, as compared to INR 33.40 million in the fiscal year ended March 31, 2021.
Net cash from financing activities.
During the fiscal year ended March 31, 2023, cash from financing activities was INR 1,384.20 million, which was primarily the result of net proceeds from factoring of INR 738.30 million, net proceeds from debentures, which was INR 417.18 million and proceeds from issue of equity share INR 620.13 million. Further, we made payments of INR 178.64 million in interest on bank overdrafts, interest on lease liabilities, vehicle loans and payment of principal portion of lease liabilities.
During the fiscal year ended March 31, 2022, cash from financing activities was INR 200.81 million, primarily as a result of net proceeds from factoring was INR 227.28 million and proceeds from issue of equity shares INR 82.67 million. Further, we made payments of INR 39.10 million as interest on bank overdrafts, interest on lease liabilities, vehicle loans and payment of principal portion of lease liabilities.
INDEBTEDNESS
As of March 31, 2023, we had total borrowings (consisting of current and non-current borrowings) of INR 1,530.74 million. Our gross debt to equity ratio was 0.9% as of March 31, 2023. For further information on our indebtedness, see "Financial Indebtedness" on page 521.
The following table sets forth certain information relating to our outstanding indebtedness as of March 31, 2023, and our repayment obligations in the years indicated:
(INR millions)
| As of March 31, 2023 | |||
| Particulars | Payment due by period | ||
| Total | Not later than 1 year | 1 - 5 years | |
| Secured | |||
| Vehicle loan | 23.87 | 4.60 | 19.27 |
| Factoring | 1,089.70 | 1,089.70 | |
| Non-Convertible Debenture | 417.17 | 196.49 | 220.68 |
| 1,530.74 | 1,290.79 | 239.95 | |
| Less: Current Borrowings | 1,089.70 | ||
| Less: Current maturities of Non-Current Borrowings | 201.08 | ||
| Non-Current Borrowings | 239.96 | ||
CONTINGENT LIABILITIES
As of March 31, 2023, contingent liabilities as per Ind AS 37 as derived from our Restated Consolidated Summary Statement are as follows:
Contingent liabilities (to the extent not provided for)
(in INR million)
| Description | As of March 31,2023 |
| Claims against the Company not recognized as debts | 85.44 |
| Service tax demand | 315.53 |
| Income-tax demand | 1.27 |
(1) These represents claim made by the customers due to service-related issues, which are contested by the Company and are pending in various district consumer redressal forums in India. The management does not expect these claims to succeed and, accordingly, no provision has been recognised in the financial statements.
(2) INR 50.40 million (March 31,2022: INR 50.40 million, March 31,2021: INR 50.4 million) represents service tax demand for the period April 2008 to March 2011. The company has filed appeals before CESTAT, Chandigarh and INR 3.90 million (March 31 , 2022 : INR 3.90 million, March 31, 2021: INR 3.90 million) represents dispute on service tax refund which is pending before "The Commissioner Appeals, Central Excise & GST, Gurugram, Haryana". The management believes that the likelihood of the case/appeals going in favour of the Company is probable and, accordingly, has not considered any provision against this demand in the financial statements.
INR 261.30 million as at March 31,2023 ( March 31, 2022: INR 255.90 million, March 31, 2021: INR 255.90 million), represents show cause cum demand notices raised by Service tax authorities over one of the subsidiaries in India. Based on the Groups evaluation, it believes that it is not probable that the demand will materialize and therefore no provision has been recognized.
(3) INR 1.27 million as at March 31,2023 (March 31,2022 :INR 1.27 million , March 31, 2021: INR 96.60 million), represents show cause cum demand notices raised by Income Tax authorities over subsidiaries in India. Based on the Groups evaluation, it believes that it is not probable that the demand will materialize and therefore no provision has been recognized.
For information in relation to the notes to the contingent liabilities as at March 31, 2023, as per Ind AS 37 -
Provisions, Contingent Liabilities and Contingent Assets, see "Restated Consolidated Summary Statements - Annexure VII Note 32 Commitments and Contingent Liabilities" on page 460.
Claims against the Company not acknowledged as debts (cases where the possibility of any outflow in the settlement is remote):
| (in INR million) | |
| Description | As of March 31,2023 |
| Income-tax demand | 135.03 |
| Service tax demand | 2,110.49 |
(1) Income-tax demand includes INR 135.00 million base amount having tax impact of INR 84 million (March 31,2022: INR 136.63 million base amount having tax impact of INR 83.88 million, March 31, 2021: INR 112.8 million base amount having tax impact of INR 34.40 million) represents income tax demand for the period April 2007 to March 2016. The Group has filed appeal before CIT (A). The management believes that the likelihood of the case/appeal going in favor of the Company is probable and accordingly has not considered any provision against this demand in the restated consolidated financial statements.
(2) Service tax demand includes INR 1,865.15 million (March 31,2022: INR 1865.10 million, March 31, 2021: INR 1,865.10 million) represents service tax demand for the period April 2007 to June 2017. The company has filed appeals before CESTAT, Chandigarh. The management believes that the likelihood of the case/appeals going in favor of the Company is probable and, accordingly, has not considered any provision against this demand in the financial statements.
INR 241.36 million (March 31,2022: INR 241.40 million, March 31, 2021: INR 241.40 million) represents service tax demand for the period November 2005 to March 2009 as per order dated February 27, 2017. INR 8.50 million (March 31, 2021: INR Nil) represents goods and service tax demand for the period financial year 2017-18 as per show cause note received. The company has filed reply before the adjudicating authority. The company has filed appeal before the tribunal against the order of Commissioner (Appeals). The management believes that the likelihood of the case/appeal going in favor of the Company is probable and accordingly has not considered any provision against this demand in the financial statements.
INR 3.98 million (March 31, 2022: INR 2.90 million) represents show cause notice received for goods and service tax due to difference in input claimed against input reflecting in GSTR 2A for the period of financial year 2017-18. The company has filed reply before the adjudicating authority. The management believes that the likelihood of the case/appeal going in favor of the Company is probable and accordingly has not considered any provision against this demand in the restated consolidated financial statements.
(3) Pursuant to the order dated March 9, 2021, corporate insolvency resolution process was initiated against Ezeego One Travel and Tours
Limited ("Ezeego") under the Insolvency and Bankruptcy Code, 2016 (the "IBC") and Resolution Professional was appointed. During the insolvency process, a demand notice was issued against the Parent Company and one of its subsidiaries by the Insolvency Professional on November 30, 2021 demanding payment of an unpaid liability amounting to INR 170.28. The Group replied to the demand notice on December 10, 2021 submitting that the amount claimed by Ezeego is contrary to its books of accounts of the Group and amount payable is INR 56.24 Subsequently, a Company Petition was filed in January 2022 under Section 9 of the IBC seeking initiation of the corporate insolvency resolution process against the Group for a default amounting to INR 251.32 (including interest payable). The matter is currently pending with the National Company Law Tribunal. The Group will be submitting its response in due course and is of the view that it will be able to successfully defend its stand as per its books of accounts.
Except as disclosed in this Red Herring Prospectus, there are no off-balance sheet derivative financial instruments, guarantees, interest rate swap transactions or foreign currency forward contracts that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we believe are material to investors. We do not engage in trading activities involving non-exchange traded contracts.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth certain information relating to future payments due under known contractual commitments as of March 31, 2023, aggregated by type of contractual obligation:
| (In INR millions) | |||||||
| As of March 31, 2023 | |||||||
| Contractual Cash flows | Payment due by period | ||||||
| Particulars | Current | Non- Current | Total | Carrying amount | Within 1 year | 1 - 5 years | More than 5 years |
| Borrowings | 714.17 | 168.62 | 882.79 | 1,530.74 | 714.17 | 168.62 | - |
| Trade Payables | 1,385.07 | - | 1,385.07 | 1,385.07 | 1,385.07 | - | - |
| Lease liabilities | 79.83 | 269.55 | 349.38 | 251.21 | 79.83 | 240.91 | 28.64 |
| Other financial liabilities | 1,151.26 | - | 1,151.26 | 1,151.26 | 1,151.26 | - | - |
| Total | 3,330.33 | 438.17 | 3,768.50 | 4,318.28 | 3,330.33 | 409.53 | 28.64 |
CAPITAL EXPENDITURES
In Fiscal 2023, 2022 and 2021 our capital expenditure towards (i) additions to Property, plant and equipment was INR 44.19 million, INR 12.79 million, INR 0.14 million respectively and (ii) addition to computer software and website was INR 140.03 million, INR 69.56 million and INR 96.00 million respectively. The following table sets forth our property, plant, and equipment, computer software and website and intellectual property right as of the dates indicated:
| (INR million) | |||
| Particulars | As at March 31, 2023 | As at March 31, 2022 | As at March 31, 2021 |
| Gross carrying value of property, plant and equipment | 297.57 | 289.92 | 303.19 |
| Gross carrying value of Computer software and websites | 2,104.22 | 1,967.98 | 1,901.43 |
| Gross carrying value of Intellectual property rights | 6.90 | 6.90 | 6.90 |
| Accumulated depreciation on property, plant and equipment | 251.73 | 268.01 | 278.90 |
| Accumulated amortization of Computer software and websites | 1,922.93 | 1,822.62 | 1,631.90 |
| Accumulated amortization of Intellectual property rights | 6.90 | 6.90 | 6.20 |
| Net carrying value of property, plant and equipment | 45.84 | 21.91 | 24.29 |
| Net carrying amount of Computer software and websites | 181.29 | 145.36 | 269.53 |
| Net carrying amount of Intellectual property rights | - | - | 0.70 |
We expect to meet our capital expenditure in the next three Fiscals through a mix of internal accruals and funding from financial institutions.
RELATED PARTY TRANSACTIONS
For further information on our related party transactions, see "Summary of the Offer Document Summary of Related Party Transactions" on page 22. Also, see "Risk Factors We have, in the past entered into certain related party transactions and may continue to do so in future. Any related party transactions that are not on an arms length basis or that may lead to conflicts of interest may adversely affect our business, results of operation, cash flows and financial condition." on page 60.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The companys activities are exposed to variety of financial risks: credit risk, foreign currency risk and liquidity risk. The companys senior management oversees the management of these risks. The companys senior management ensures that the companys financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured, and managed in accordance with the companys policies and risk objectives. The company reviews and agrees on policies for managing each of these risks which are summarized below:
Credit Risk. Credit risk is the risk that a counterparty 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), including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the companys established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.
Liquidity Risk. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, we aim to maintain flexibility in funding by maintaining sufficient amounts in certificates of deposits with banks and keeping committed credit lines available.
The Company manages liquidity by maintaining adequate reserves and banking facilities, by continuously monitoring forecasts and actual cash flows and matching the maturity profiles of financial assets and financial liabilities. Based on our past performance and current expectations, we believe that the cash and cash equivalent and cash generated from operations will satisfy the working capital needs, funding of operational losses, capital expenditure, commitments and other liquidity requirements associated with our operations through at least the next 12 months. In addition, there are no transactions, arrangements or other relationships with any other person that are reasonably likely to materially affect the availability of the requirement of capital resources.
Foreign Currency Risk. Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Groups operating, investing and financing activities.
TOTAL TURNOVER OF EACH MAJOR INDUSTRY BUSINESS IN WHICH THE COMPANY OPERATES
We are primarily engaged in providing ticketing and travel booking services through our OTA platforms. Also, see "Industry Overview" on page 205.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
SIGNIFICANT ECONOMIC CHANGES THAT MATERIALLY AFFECT OR ARE LIKELY TO AFFECT INCOME FROM CONTINUING OPERATIONS
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified above in " Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 481, and 31, respectively.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in " Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 481, and 31, respectively. To our knowledge, except as discussed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of
Financial Condition and Results of Operations" on pages 31, 337, and 477 respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALES PRICES
Changes in revenue in the last three fiscals and are as described in "Managements Discussion and Analysis of
Financial Condition and Results of Operations , "Managements Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2023 compared to Fiscal 2022" and "Managements Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2022 compared to Fiscal 2021" above on pages 490, 492 respectively.
SEGMENT REPORTING
For management purposes, the Group is organized into lines of business ("LOBs") based on its products and services and has three reportable segments as mentioned below. The LOBs offer different products and services, and are managed separately because the nature of products and/ or methods used to distribute the services are different. For each of these LOBs, the Chief Executive Officer (CEO) reviews internal management reports for making decisions related to performance evaluation and resource allocation. Thus, the CEO is construed to be the Chief Operating Decision Maker (CODM). The CODM uses Adjusted Margin, a non IND AS measure, to assess segment profitability and in deciding how to allocate resources and in assessing performance. The Adjusted Margin is arrived at by (i) adding back customer inducement costs including customers incentives, customer acquisition cost and loyalty program costs, which are recorded as a reduction of revenue, and (ii) reducing service costs, from the ‘Revenue as per IND AS - Rendering of services.
The following summary describes the operations in each of the Groups reportable segments:
Air Ticketing: Through internet, mobile based platform and call-centers, the Group provides the facility to book and service international and domestic air tickets to ultimate customers through B2C (Business to Consumer), Business to Enterprise (B2E) and B2B2C (Business to Business to Consumer) channels..
Hotels and Packages: Through an internet and mobile based platform and call-centers, the group provides holiday packages and hotel reservations. For internal reporting purpose, the revenue related to Airline Ticketing issued as a component of group developed holiday package is assigned to Hotel and Package segment and is recorded on a gross basis. The hotel reservations form integral part of the holiday packages and, accordingly, is treated as one reportable segment due to similarities in the nature of services..
Other services: Primarily include the income from sale of rail and bus tickets and income from freight forwarding services. The Other services do not meet any of the quantitative thresholds to be a reportable segment for any of the periods presented in the consolidated financial statements. However, management has considered this as the reportable segment and disclosed it separately, since the management believes that information about the segment would be useful to users of the consolidated financial statements.
For disclosure of segment reporting as per Ind AS 108 for years ended March 31, 2023, 2022 and 2021, refer note
" Note 25 - Segment information" of Restated Consolidated Summary Statements on page 453.
SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS
Other than as described in this Red Herring Prospectus, particularly in sections "Risk Factors" and
"Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 31 and 477 respectively, to our knowledge, there is no significant dependence on a single or few customers or suppliers
SEASONALITY/ CYCLICALITY OF BUSINESS
Our business is subject to seasonality or cyclicality, we experience seasonal fluctuations in our revenues due to the inherent nature of the travel industry. For further information, see, " Significant Factors Affecting our Results of Operations Seasonality", "Industry Overview" and "Our Business" on pages 483, 205, and 337 respectively.
COMPETITIVE CONDITIONS
We operate in a competitive environment. See sections, "Our Business", "Industry Overview", "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Results of Operations" on pages 337, 205, 31, and 477, respectively.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2023 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed above and in this sections titled " Significant Factors Affecting Our Results of Operations and Financial Condition", "Our Business" and "History and Certain Corporate Matters" on pages respectively, to our knowledge no circumstances have arisen since March 31, 2023 that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months. However, following are key developments since March 31, 2023:
(i) On January 2022, One, Ezeego One Travel and Tours Limited ("Ezeego"), being a company admitted into insolvency filed a company petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 ("Code") before National company Law Tribunal, Mumbai ("NCLT") seeking to initiate corporate insolvency resolution plan of Yatra Online Limited ("Company Petition"). Ezeego filed the Company Petition pursuant to a demand notice dated November 30, 2021 demanding payment of INR 21.50 million to which Yatra issued its reply dated December 10, 2021 stating that the amount claimed by Ezeego is not in accordance with its books of accounts. The Company Petition was filed on the basis of a default of INR 31.50 million (including interest). Yatra filed its reply to the company petition along with an application seeking rejection of the Company Petition for being barred under Section 10A of the Code ("Application"). On March 17, 2023, the NCLT dismissed the Application ("NCLT Order"). Yatra challenged the NCLT Order before the National Company Law Appellate Tribunal, New Delhi ("NCLAT"). By an order dated March 31, 2023, the NCLAT allowed Yatras appeal and dismissed the Company Petition filed against Yatra ("NCLAT Order").
Ezeego challenged the NCLAT Order before the Supreme Court ("Civil Appeal"). By an order dated May 02, 2023, Ezeego withdrew the Civil Appeal on account of a settlement between the parties whereby Yatra paid a sum of INR 16.00 million to Ezeego as full and final settlement of all outstanding dues between the parties. Accordingly, the proceedings against Yatra under the Code stand concluded.
(ii) Company has allotted 300 non-convertible debenture ("NCDs") and 100 NCDs to its existing debenture holders i.e., Blacksoil Capital Private Limited and Blacksoil India Credit Fund (acting through its investment manager Blacksoil Asset Management Private Limited) (collectively, "Blacksoil") respectively on August 19, 2023 aggregating to INR 200 million. These NCDs shall be redeemed with interest rate of 14.25% p.a. during a period of thirty months from the date of allotment. The first repayment of principal shall commence on April 30, 2024 and interest payment has started from August 31, 2023. Post 12 months from the allotment date, till the time amount payable to Blacksoil is at least INR 20 million, Company has the right (but not the obligation) to redeem any or all of the NCDs by paying all outstanding amounts. Any prepayment will attract premium of 2% on the amount being redeemed/prepaid. These NCDs have been secured against the first pari-passu charge over the movable fixed assets and current assets (both present and future).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of this Restated Consolidated Summary Statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of consolidation
The Restated Consolidated Summary Statements comprise the restated consolidated summary statements of the Yatra Online Limited together with its subsidiaries ("Group") as at March 31, 2023, March 31, 2022 and March 31, 2021. Comprise the financial statements of the Parent Company, its subsidiaries and joint venture.
A subsidiary is an entity controlled by the Group. Control exists when the parent has power over the entity, is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entitys returns.
Subsidiaries are fully consolidated from the date on which the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Where necessary, adjustments are made to the Restated consolidated summary statements of subsidiary to bring their accounting policies and accounting period in line with those used by the Group. All intra-group transactions, balances, income and expenses and cash flows are eliminated on consolidation.
Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent. Non-controlling interests in the net assets of consolidated subsidiary are identified separately from the Groups equity therein. Non-controlling interests consist of the amount of those interests at the date of the business combination and the non-controlling interests share of changes in equity since that date.
Profit or loss and each component of other comprehensive income/ loss (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.
Joint venture
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.
The Groups investment in its joint venture is accounted for using the equity method. Under the equity method, the investment in the joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognize changes in the Groups share of net assets of the joint venture since the acquisition date. Restated Consolidated Summary Statement of Profit and Loss (including Other Comprehensive Income), reflects the Groups share of the results of operations of the joint venture.
In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group.
At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognizes the loss as Share of loss of a joint venture in the Restated Consolidated Summary Statement of Profit and Loss (including Other
Comprehensive Income). When the Groups share of losses of a joint venture exceeds the Groups interest in that joint venture (which includes any long-term interests that, in substance, form part of the Groups net investment in the joint venture), the Group discontinues recognizing its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture. At each reporting date, Group true-up its obligation to contribute towards the share of cumulative loss of the Joint venture, and reversal, if any, arising is recognised as the gain under ‘Share of loss of a joint venture in the Restated Consolidated Summary Statement of Profit and Loss.
Following subsidiary companies and joint venture have been considered in the preparation of the restated summary statements:
| Name of the entity | Relationship | Country of incorporation | % of Holding and voting power either directly or indirectly through subsidiary as at | |||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | Principal activities | |||
| TSI Yatra Private Limited | Wholly owned subsidiary | India | 100% | 100% | 100% | Air travel services |
| Yatra Corporate Hotel Solutions Private Limited | Wholly owned subsidiary | India | 100% | 100% | 100% | Hotel services |
| Yatra Hotel Solutions Private Limited | Wholly owned subsidiary | India | 100% | 100% | 100% | Hotel services |
| Yatra TG Stays Private Limited | Wholly owned subsidiary | India | 100% | 100% | 100% | Hotel services |
| Yatra For Business Pvt. Ltd. (formerly known as Air Travel Bureau Private Limited) | Wholly owned subsidiary | India | 100% | 100% | 100% | Air travel services |
| Travel.Co.In Private Limited | Wholly owned subsidiary | India | 100% | 100% | 100% | Air travel services |
| Yatra Online Freight Services Private Limited ("Yatra Freight")* | Wholly owned subsidiary | India | 100% | 100% | 100% | Freight forwarding services |
| Yatra Middle East L.L.C-FZ** | Wholly owned subsidiary | United Arab Emirates | 100% | - | - | Computer programming, consultancy and related activities |
| Adventure and Nature Network Private Limited | Joint venture | India | 50% | 50% | 50% | Tour and travel services |
* On August 5, 2020, Yatra Online Freight Services Private Limited was incorporated with principal activity of Freight forwarding services.
Yatra Online Limited (formerly known as Yatra Online Private Limited) (the "Parent Company), through its subsidiary, Yatra for Business Private Limited (formerly known as Air Travel Bureau Private Limited) holds all of the outstanding shares of Yatra Online Freight Services Private Limited.
** On February 9, 2023, Yatra Middle East L.L.C-FZ was incorporated with principal activity of computer programming, consultancy and related activities.
Basis of measurement
The Restated Consolidated Summary Statements have been prepared on the accrual and going concern basis, and the historical cost convention except where the Ind AS requires a different accounting treatment
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
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).
Level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
Current versus non-current classification
The Group presents assets and liabilities in the Restated Consolidated Summary Statement of Assets and Liabilities based on current/non-current classification. An asset is current when it is:
Expected to be realised or intended to be sold or consumed in the normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period Or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle
Other Significant Accounting Policies
Property, plant and equipment (PPE)
An item is recognised as an asset, if and only if, it is probable that the future economic benefits associated with the item will flow to the Group and its cost can be measured reliably. PPE are initially recognised at cost. The initial cost of PPE comprises purchase price (including non-refundable duties and taxes but excluding any trade discounts and rebates), borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.
Subsequent costs are included in the assets carrying amount or recognised as separate assets, as appropriate, only when it is probable that the future economic benefits associated with expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to restated consolidated summary statement of profit and loss at the time of incurrence.
Gains or losses arising from de-recognition of PPE are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the restated consolidated summary statement of profit and loss when the asset is derecognised.
Depreciation on PPE is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management. The Group has used the following useful lives to provide depreciation on its PPE.
| Particulars | Years |
| Computers and peripherals | 3 |
| Office equipment | 5 |
| Furniture and fixtures | 5 |
| Vehicles | 3 7 years |
The useful lives, residual values and depreciation method of PPE are reviewed, and adjusted appropriately, at-least as at each reporting date so as to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from these assets. The effects of any change in the estimated useful lives, residual values and / or depreciation method are accounted prospectively, and accordingly the depreciation is calculated over the PPEs remaining revised useful life. The cost and the accumulated depreciation for PPE sold, scrapped, retired or otherwise disposed off are derecognised from the restated consolidated summary statement of assets and liabilities and the resulting gains / (losses) are included in the statement of profit and loss within other expenses / other income. The management basis its past experience and technical assessment has estimated the useful life, which is at variance with the life prescribed in Part C of Schedule II of the Companies Act, 2013 and has accordingly, depreciated the assets over such useful life.
Intangible assets
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be measured reliably.
Intangible assets are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalized and expenditure is reflected in the Restated Consolidated Summary Statement of Profit and Loss in the year in which the expenditure is incurred.
Intangible assets are amortized on a straight-line basis over the estimated useful economic life. The Group amortizes the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired
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. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Restated Consolidated Summary Statement of Profit and Loss when the asset is derecognised.
Research and development costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the Group can demonstrate all the following:
- The technical feasibility of completing the intangible asset so that it will be available for use or sale
- Its intention to complete the asset
- Its ability to use or sell the asset
- How the asset will generate future economic benefits
- The availability of adequate resources to complete the development and to use or sell the asset.
- The ability to measure reliably the expenditure attributable to the intangible asset during development.
Intangible assets are amortized as below:
| Non-compete agreements | 6.5 years |
| Intellectual property rights | 3 years |
| Computer software and websites | 3 to 10 years or license period, whichever is shorter |
| Customer relationships | 4 to 15 years |
During the year ended March 31, 2021, the Group has re-estimated the useful life of the following intangible assets and accounted for the impact of such change on prospective basis:-
| Customer relationships | 4-10 years |
Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested at least annually or when there are indicators that an asset may be impaired, for impairment. Assets that are subject to depreciation and amortization are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or when annual impairment testing for an asset is required. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.
Impairment test for goodwill is performed at the level of each CGU or groups of CGUs expected to benefit from acquisition-related synergies and represent the lowest level within the entity at which the goodwill is monitored for internal management purposes and which is not higher than the Groups operating segment. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less costs to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, less the costs of disposal. Impairment losses, if any, are recognised in the Restated Consolidated Summary Statement of Profit and Loss as a component of depreciation and amortization expense.
An impairment loss in respect of goodwill is not reversed. For assets excluding goodwill, an assessment is made annually to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
(i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:-
| Buildings | 3 to 9 years |
| Others | 3 to 5 years |
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (e) Impairment of non-financial assets.
(ii) Lease Liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Borrowing cost
Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, at fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial assets contractual cash flow characteristics and the Groups business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not measured at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Groups business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial assets at amortized cost (debt instruments)
• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss
Financial assets at amortized cost (debt instruments)
The Group measures financial assets at amortized cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows, and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired
The Groups financial assets at amortized cost includes trade receivables, term deposits, security deposits and employee loans.
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling, and,
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity for the issuer under "IND AS 32 Financial Instruments: Presentation" and are not held for trading. The classification is determined on an instrument-by-instrument basis.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value.
Financial assets (debt instruments) with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Groups consolidated statement of financial position) when:
The rights to receive cash flows from the asset have expired, or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it 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 Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Impairment of financial assets
The Group recognized an allowance for expected credit losses (ECLs) for all instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group 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.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Groups financial liabilities include trade and other payables, interest-bearing borrowings including bank overdrafts and share warrants.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowing
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. The EIR amortization is included as finance costs in the statement of profit or loss and other comprehensive loss. This category applies to interest-bearing borrowings, trade and other payables.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or 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 recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the restated consolidated summary statement of Assets and liabilities if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Fair value measurement
The Group measures financial instruments, at fair value such as warrants etc. at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability or
• In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
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).
Level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
Revenue recognition
The Group generates its revenue from contracts with customers. The Group recognize its revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that the Group expect to receive in exchange for those services. When the Group act as an agent in the transaction under Ind AS 115, the Group recognize revenue only for our commission on the arrangement. The Group has concluded that it is acting as agent in case of sale of airline tickets, hotel bookings, sale of rail and bus tickets as the supplier is primarily responsible for providing the underlying travel services and the Group does not control the service provided by the supplier to the traveller and as principal in case of sale of holiday packages since the Group controls the services before such services are transferred to the traveller.
The Group provides travel products and services to agents and leisure customers (B2C Business to Consumer), and B2B2C (Business to Business to Consumer) travel agents in India and abroad. The revenue from rendering these services is recognised in the Restated Consolidated Summary Statement of Profit and Loss (including Other Comprehensive Income) once the services are rendered. This is generally the case 1) on issuance of ticket in case of sale of airline tickets 2) on date of hotel booking and 3) on the date of completion of outbound and inbound tours and packages.
Air Ticketing
The Group receives commissions or service fees/ incentive from the travel supplier/ bank and/or traveling customers. Revenue from the sale of airline tickets is recognised as an agent on a net commission earned basis. Revenue from service fee is recognised on earned basis. Both the performance obligations are satisfied on issuance of airline ticket to the traveller. The Group records an allowance for cancellations at the time of the transaction based on historical experience and restrict revenue recognition only to the extent that it is highly probable that a significant reversal of revenue will not occur in future periods.
Incentives related to airlines are accounted for as variable consideration when the amount of revenue to be recognized can be estimated to the extent that it is probable that a significant reversal of any cumulative revenue will not occur.
The Group receives upfront fee from Global Distribution System ("GDS") providers for facilitating the booking of airline tickets on its website or other distribution channels to travel agents for using their system. The upfront fees are recognised as revenue for actual airline tickets sold over the total number of airline tickets to be sold over the term of the agreement, in both cases using such GDS platforms, and the balance amount is recognized as deferred revenue under contract liabilities.
The Group earns incentives from airlines if specific targets are achieved over a period of time. Such incentives are treated as variable consideration and the Group estimates the amount of consideration to which it will be entitled in exchange for services at the contract inception date and at each reporting date using either the most likely amount method or the expected value method, depending on which method the Group expects to better predict the amount of consideration to which it will be entitled. The most likely amount is used for those contracts with a single volume threshold, while the expected value method is used for those with more than one volume threshold. The Group includes estimated variable consideration in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Hotels and Packages
Revenue from hotel reservation is recognised as an agent on a net commission earned basis. Revenue from service fee from customer is recognised on earned basis. Both the performance obligations are satisfied on the date of hotel booking. The Group records an allowance for cancellations at the time of booking on this revenue based on historical experience and restrict revenue recognition only to the extent that it is highly probable that a significant reversal of revenue will not occur in future periods.
Revenue from packages is accounted for on a gross basis as the Group controls the services before such services are transferred to the traveller and is determined to be the primary obligor in the arrangement. The Group recognises revenue from such packages on the date of completion of outbound and inbound tours and packages. Cost of delivering such services includes cost of hotels, airlines and package services and is disclosed as service cost.
Other Services
Revenue from other services primarily comprises of revenue from sale of rail and bus tickets and revenue from freight forwarding services. Revenue from the sale of rail and bus tickets is recognised as an agent on a net commission earned basis on the date of booking ticket, net of allowance for cancellations at the time of the transaction based on historical experience. Revenue related to freight forwarding services is recognised at the time of departure of the cargo at the origin in case of exports. In case of Imports, revenue is recognised on the basis of arrival dates. The Group acts as an agent, accordingly, recognizes revenue only for commission on the arrangement.
Others
Income from other source, primarily comprising advertising revenue, revenue from sale of coupons & vouchers and fees for facilitating website access to travel insurance companies are being recognised as the services are being performed as per the terms of the contracts with respective suppliers.
Revenue is recognised net of allowances for cancellations, refunds during the period and taxes.
The Group provides loyalty programs under which participating customers earn loyalty points on current transactions that can be redeemed for future qualifying transactions. Under its customer loyalty programs, the Group allocates a portion of the consideration received to loyalty points that are redeemable against any future purchases of the Groups services. This allocation is based on the relative stand-alone selling prices. The amount allocated to the loyalty program is deferred and is recognized as revenue when the Group fulfils its obligations to supply the products/services under the terms of the program.
The Group incurs certain marketing and sales promotion expenses and recorded the same as reduction in revenue. This includes the cost for upfront cash incentives to the end users and select loyalty programs as incurred for customer inducement and acquisition for promoting transactions across various booking platforms.
Contract balances
Contract assets
A contract asset is recognized for the right to consideration in exchange for services transferred to the customer if receipt of such consideration is conditional on completion of further activities/ services, i.e., the Group does not have an unconditional right to receive consideration.
Trade receivables
A receivable is recognized if an amount of consideration that is unconditional is due from the customer (i.e., only the passage of time is required before payment of the consideration is due).
Contract liabilities
A contract liability is the obligation to transfer services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract.
Others
(i) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions have been complied with or will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
The Group has assessed and determined to present grants as other income in the Restated Consolidated Summary Statement of Profit and Loss (including other comprehensive Income).
(ii) Interest income
Interest income comprises income on term deposits. Interest income is recognised as it accrues in the Restated Consolidated Summary Statement of Profit and Loss (including other comprehensive income), using the effective interest rate method (EIR).
Foreign currency transactions
The Restated consolidated summary statement are presented in Indian Rupees which is the functional and presentation currency of the Group.
Transactions in foreign currencies are initially recorded by the Groups entities at their respective functional currency spot rates at the date the transactions first qualify for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in the restated consolidated summary statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively)
Employee benefits
The Groups employee benefits mainly include wages, salaries, bonuses, defined contribution to plans, defined benefit plans, compensated absences and share-based payments. The employee benefits are recognised in the year in which the associated services are rendered by the Groups employees.
a. Defined contribution plans
The contributions to defined contribution plans are recognised in Restated Consolidated Summary Statement of Profit and Loss as and when the services are rendered by employees. The Group has no further obligations under these plans beyond its periodic contributions.
b. Defined benefit plans
In accordance with the local laws and regulations, all the employees in India are entitled for the Gratuity plan. The said plan requires a lump-sum payment to eligible employees (meeting the required vesting service condition) at retirement or termination of employment, based on a pre-defined formula. The Group provides for the liability towards the said plans on the basis of actuarial valuation carried out as at the reporting date, by an independent qualified actuary using the projected unit-credit method. The obligation towards the said benefits is recognised in the Restated Consolidated Summary Statement of Assets and Liabilities, at the present value of the defined benefit obligations less the fair value of plan assets (being the funded portion). The present value of the said obligation is determined by discounting the estimated future cash outflows, using interest rates of government bonds. The interest income / (expense) are calculated by applying the above-mentioned discount rate to the plan assets and defined benefit obligations liability. The net interest income / (expense) on the net defined benefit liability is recognised in the Restated Consolidated Summary Statement of Profit and Loss. However, the related re-measurements of the net defined benefit liability are recognised directly in the other comprehensive income in the period in which they arise. The said remeasurements comprise of actuarial gains and losses (arising from experience adjustments and changes in actuarial assumptions), the return on plan assets (excluding interest). Re-measurements are not re-classified to the Restated Consolidated Summary Statement of Profit and Loss in any of the subsequent periods.
c. Share-based payments
The Group operates equity-settled, employee share-based compensation plans, under which the Group receives services from employees as consideration for stock options towards shares of the ultimate holding company. In case of equity-settled awards, the fair value is recognised as an expense in the Restated Consolidated Summary Statement of Profit and Loss within employee benefits as employee share-based payment expenses, with a corresponding increase in share-based payment reserve (a component of equity). The total amount so expensed is determined by reference to the grant date fair value of the stock options granted, which includes the impact of any market performance conditions and non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions. However, the non-market performance vesting and service conditions are considered in the assumption as to the number of options that are expected to vest. The forfeitures are estimated at the time of grant and reduce the said expense ratably over the vesting period. The expense so determined is recognised over the requisite vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. As at each reporting date, the Group revises its estimates of the number of options that are expected to vest, if required. It recognises the impact of any revision to original estimates in the period of change. Accordingly, no expense is recognised for awards that do not ultimately vest, except for which vesting is conditional upon a market performance / non-vesting condition. These are treated as vesting irrespective of whether or not the market / non-vesting condition is satisfied, provided that service conditions and all other nonmarket performance are satisfied. Where the terms of an award are modified, in addition to the expense pertaining to the original award, an incremental expense is recognised for any modification that results in additional fair value, or is otherwise beneficial to the employee as measured at the date of modification.
The share-based payment expenses is recharged to the Company, which is adjusted against Deemed capital contribution by ultimate holding company.
Income taxes
The income tax expense comprises of current and deferred income tax. Income tax is recognised in the Restated Consolidated Summary Statement of Profit and Loss, except to the extent that it relates to items recognised in the other comprehensive income or directly in equity, in which case the related income tax is also recognised accordingly.
a. Current tax
The current tax is calculated on the basis of the tax rates, laws and regulations, which have been enacted or substantively enacted as at the reporting date. The payment made in excess / (shortfall) of the Groups income tax obligation for the period are recognised in the Restated Consolidated Summary Statement of Assets and Liabilities as current income tax assets / liabilities. Any interest, related to accrued liabilities for potential tax assessments are not included in Income tax charge or (credit), but are rather recognised within finance costs.
b. Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and any unused tax losses, 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 utilized, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of deductible temporary differences associated with investments in subsidiaries and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
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 utilized. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside Restated Consolidated Summary Statement of Profit and Loss are recognised outside profit or loss. Deferred tax items are recognised, in correlation to the underlying transaction either in other comprehensive income/loss or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxation authority.
Minimum Alternative Tax (‘MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the concerned company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
Income tax assets and liabilities are off-set against each other and the resultant net amount is presented in the Restated Consolidated Summary Statement of Assets and Liabilities, if and only when, (a) the Group currently has a legally enforceable right to set-off the current income tax assets and liabilities, and (b) when it relates to income tax levied by the same taxation authority and where there is an intention to settle the current income tax balances on net basis.
Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is the number of equity shares outstanding is adjusted for share split 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 period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Provisions
A provision is recognised when the Group has a present obligation as a result of 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.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Restated Consolidated Summary Statement of Profit and Loss net of any reimbursement
Contingent liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.
Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less (that are readily convertible to known amounts of cash and cash equivalents and subject to an insignificant risk of changes in value). However, for the purpose of the Consolidated Statement of Cash Flows, in addition to above items, any bank overdrafts / cash credits that are integral part of the Groups cash management, are also included as a component of cash and cash equivalents.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value. Acquisition-related costs are expensed as incurred in Restated Consolidated Summary Statement of Profit and Loss.
When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for Non-controlling Interest over the fair value of the identifiable net assets acquired and liabilities assumed. If the fair value of the identifiable net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognizes the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups Cash Generating Units (CGUs) (refer to note 2) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Exceptional items
Exceptional items refer to items of income or expense within the Restated Consolidated Summary Statement of Profit and Loss that are of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance for the period
Significant accounting estimates and assumptions
The estimates used in the preparation of the said restated consolidated summary statement are continuously evaluated by the Group, and are based on historical experience and various other assumptions and factors (including expectations of future events), that the Group believes to be reasonable under the existing circumstances. The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date. Although the Group regularly assesses these estimates, actual results could differ materially from these estimates - even if the assumptions underlying such estimates were reasonable when made, if these results differ from historical experience or other assumptions do not turn out to be substantially accurate. The changes in estimates are recognised in the restated consolidated summary statement in the period in which they become known.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Actual results could differ from these estimates.
| a) Impairment reviews |
| b) Measurement of Expected Credit Loss (ECL) for uncollectible trade receivables and contract assets |
| c) Loyalty programs |
| d) Taxes |
| e) Defined benefit plans |
| f) Estimating the incremental borrowing rate |
| g) Useful life of Intangible assets |
| h) Recognition of variable consideration incentives pertaining to air ticketing |
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