2.15 Provisions
A provision is recognized when the Company 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 measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects the risks specific to the liability. The increase in the provision due to the passage of time is recognized as a finance cost.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
2.16 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. The Company does not recognize a contingent liability but discloses its existence in financial statements.
2.17 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits 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) and funds in transit. However, for the purpose of the
statement of cash flows, in addition to above items, any bank overdrafts / cash credits that are integral part of the Company's cash management, are also included as a component of cash and cash equivalents.
The cash flow has been prepared under the "Indirect Method" as set out in Indian Accounting Standard (Ind AS) 7 - statement of cash flows.
2.18 Segment reporting policies
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). Only those
business activities are identified as operating segment for which the operating results are regularly reviewed by the CODM to make decisions about resource
allocation and performance measurement. For details, refer to note 38.
2.19 Critical accounting judgements, estimates and assumptions
The estimates used in the preparation of the said financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events), that the Company 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 Company 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 recognized in the financial statements in the year 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. Allowance for uncollectible trade receivables and advances
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing of the receivable balances and historical experience. Additionally, a large number of minor receivables is grouped into homogeneous groups and assessed for impairment collectively. Individual trade receivables are written off when management deems them not to be collectible are provided in note 11 and 42.
b. Defined benefit plans
The costs of post-retirement benefit obligation under the Gratuity plan are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increase, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For details, refer to note 33.
c. Contingencies
Where it is not probable that an outflow of economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits
is remote. Contingent liabilities are disclosed
on the basis of judgment of the management/ independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.
2.20 Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Note:
** The Board of Director in its meeting held on October 10 2022, recommended sub division of the equity shares of face value of ' 2/- (Rupees Two) each into equity shares of face value of '. 1/- (Rupees One) each. The Company had fixed November 22, 2022, as record date for the purpose of sub-division of equity shares. Subsequently, the Company has issued bonus shares of 1,303,740,000 fully paid-up Equity shares of ' 1/- (Rupees one) each as fully paid-up Equity Shares in proportion of 3 (Three) new fully paid-up Equity Shares of ' 1/- (Rupees one) for every 1 (One) existing fully paid-up Equity Shares of ' 1/- (Rupees One) each to the eligible shareholders of the Company whose names appear in the Registers of Members or in the Register of Beneficial Owner maintained by the depositories on the record date, i.e., November 22, 2022.
(c) Terms/Rights attached to equity shares
The Company has only one class of equity shares having a par value of ' 1 per share (March 31,2023 : ' 1 each). The company declares and pays dividend in Indian rupees. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders. The Company has paid Interim Dividend of ' 0.10/- (par value ' 1/- each) per equity share during the year ended March 31, 2024 (March 31, 2023 Nil).
(d) Weighted average number of shares is the number of equity shares outstanding at the beginning of the year adjusted by the number of equity shares issued during year, multiplied by the time weighting factor. The time
weighting factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the year.
32 EMPLOYEE BENEFITS
A. Defined Contribution Plans
The Company makes contributions towards provident fund and superannuation fund which are defined contribution
plans for qualifying employees. The contributions are made to the registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contribution plan is ' 13.11 Mn
(March 31, 2023: ' 12.58 Mn).
B. Defined Benefit Plans Gratuity:
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member's length of
service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service with part thereof in excess of six months subject to maximum limit of ' 2 Mn. The same is
payable on termination of service or retirement or death whichever is earlier.
The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognised immediately in the Other Comprehensive Income (OCI).
(a) The Company has ongoing legal cases against the Company on account of various matters including recovery of moneys advanced in the course of business, infringement of trademarks and seeking damages thereof. The cumulative amounts claimed against the Company in these cases is ' 40.00 Mn ; details of which are mentioned below:
(i) Air Worth Travel & Tours Private Limited; one of the ticketing partner with the Company, has filed claim of ' 574.62 Mn against the Company on grounds of claiming wrongful refunds on flown tickets, failed to
make payment of cancellation charges, lower ticket charges for higher class tickets, excess refunds claimed. On February 26, 2024 The Delhi High Court has dismissed the petition of Air Worth Travel & Tours Private
Limited. The management based on legal assessment and as represented by lawyers believes that the case is dismissed and accordingly does not believes that any liability may occur on this account.
(ii) One97 Communications Limited had filed a case against the Company for non-payment of cancellation refunds of ' 53.06 Mn for the year till May 2017 which have been paid by One97 Communication Limited to its customers on behalf of the Company. On March 01, 2024, the Company has enterd into settlement agreement with One97 Communication Limited in Delhi High Court Mediation and Conciliation Centre to settle all it's
outstanding amounts and claims, as per which the Company has paid ' 68 Mn in full and final settlement.
(iii) MakeMyTrip has filed a claim of ' 40.00 Mn for Permanent Injunction Restraining Infringement of Trademarks, Copyrights, Passing Off, Dilution of Goodwill, Unfair Competition, Rendition of Accounts of Profits/Damages, Delivery Up etc for use of similar name. The matter is pending before the Hon'ble High Court of Delhi.
The Company based on assessment of its legal counsel believes that any chances of liability devolving upon the Company upon final conclusion of the cases mentioned above in Court of Law, is not probable and hence has not provided for any amounts in the financial statements towards any adverse outcome of these cases.
(b) The Company had an outstanding service tax demand of ' 30.62 Mn for the financial years 2012-13 to 2016-17 pertaining to incorrect availment of Cenvat credit on input services in cases where it has taken abatement and exemptions for provision of output services. The Company in March 2019 has paid ' 15.31 Mn under section 127 of Finance (No. 2) Act, 2019 read with rule 9 of the Sabka Vishwas (Legacy Scheme, 2019) as full and final settlement against such demand. As per the scheme, such payments would not be construed as admission of liability for any subsequent years if assessed under the GST regime. Further, the Company based on internal assessment and expert opinion believes chances of any liability devolving on this matter is not probable and hence have not provided for any amounts in the financial statements which if computed for years subsequent to FY 2016-17 shall be ' 94.49 Mn (March 31, 2023: ' 94.49 Mn).
(c) The Company has issued below guarantees :
(i) ' 120.00 Mn (March 31, 2023: ' 120.00 Mn): The Company has given joint bank guarantees to Travel Agents
Federation of India ('TAFI') in respect of air travel business.
(ii) ' 140.00 Mn (March 31, 2023: ' 20.00 Mn): The Company has given bank guarantees to International Air Transport Association('IATA') in respect of air travel business.
(iii) ' 80.87 Mn (March 31, 2023: ' 80.87 Mn): The Company has issued a SBLC (Standby letter of credit) to ICICI
bank towards issuance of working capital loan to its wholly owned subsidiary Easemytrip UK Limited against
fixed deposits. The bank can invoke the SBLC in full in case of default of repayments of loan and/or interest by Easemytrip UK Limited.
(iv) ' Nil (March 31, 2023: ' 105.27 Mn): The Company has issued a SBLC (Standby letter of credit) to ICICI bank
towards issuance of overdraft facility to its wholly owned subsidiary Easemytrip UK Limited against fixed deposits. On October 11, 2023, ICICI bank has invoked the SBLC and utilised the FD proceeds towards
repayment of loans to ICICI UK, and such non-fund based financial commitment is changed to financial commitment by way of loan.
(v) ' 25.5 Mn (March 31, 2023: ' 25.5 Mn): The Company has given Bank guarantee to National Stock Exchange of India Ltd. (NSE) in accordance with the conditions precedent for NSE to function as the 'Designated stock
exchange' for the Initial public offer of the Company.
(vi) ' 62.54 Mn (March 31,2023: ' Nil): The Company has given bank guarantees to ean.com LP (Expedia) in respect of extended credit period for booking of Hotel Accommodation.
(vii) ' 9.59 Mn (March 31, 2023: ' Nil): The Company has given bank guarantees to Agoda Company PTE LTD in respect of extended credit period for booking of Hotel Accommodation.
(viii) ' 15.75 Mn (March 31, 2023: ' Nil): The Company has given bank guarantees to Head of Chancery, Embassy of India, Abu dhabi for Outsourcing of Consular-Passport-Visa (CPV) - OCI - Attestation services in respect of submission of bid.
(d) A search under section 132 of the Income Tax Act, 1961 was carried out at the premises of the Company by the
Income Tax authorities during the financial year 2017-18. On March 27, 2019 the Company has received demand orders amounting to ' 356.98 Mn for financial years 2011-12 to 2016-17 pertaining to disallowances of certain expenses and addition of sales. During the year ended March 31, 2023, the Company has received appellant orders under section 250 of Income Tax Act 1961 for the financial year 2011-12 to 2016-17; wherein the demand raised in
the earlier notices have been dropped. During the year ended March 31, 2024, the IT Authority have filed an appeal to Income Tax Appellate Tribunal (ITAT) against the order passed by CIT for '. 257.59 Mn and the same is pending for disposal. The Company on the basis of its internal assessment and expert opinion believes that the likelihood of these demands sustained is not probable hence not accrued any amount towards these demands in the financial statement.
(e) There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated 28th February, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC order. The Company will update its provision, on receiving further clarity on the subject.
(B) Capital commitment
There are no capital commitment as at March 31, 2024 and March 31, 2023.
Other Commitment
At March 31, 2024 the Company had commitments of ' Nil (March 31, 2023: ' 687.50) related to the long term
advertisement contract.
Terms and conditions of transactions with related parties
The sale and purchase from related parties are made on terms equivalent to those that prevailing arm's length transaction. Outstanding balances at the year end are unsecured and interest free (other than loans) and settlement occurs in cash. For the year ended March 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2023 :Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. There have been no guarantees provided or received for any related party receivables or payables except financial guarantee of ' 80.87 Mn (March 31, 2023: ' 186.14 Mn) given on behalf of Easemytrip UK Ltd for working capital demand loan taken from ICICI Bank UK PLC. There were no commitments given to related parties.
36 INTERIM DIVIDEND
The Board of Directors (in the meeting held on December 11, 2023) declared an interim dividend of ' 0.10/- (par value
' 1/- each) per equity share. The record date for payment was December 19, 2023 and the same was paid on January 09, 2024 (During the year ended March 31, 2023, the Company has not declared or paid any dividends).
37 SEGMENT INFORMATION
Business segments
For management purposes the Company is organized into Lines of Business (LOBs) based on its products and services
and has following reportable segments based on the nature of the products the risks and returns the organisation structure and the internal financial reporting systems. The segment results are regularly reviewed and performance is assessed by its Chief Operating Decision Maker (CODM) i.e. whole-time director. LOB wise profits before taxes finance costs other income depreciation and amortisation are reviewed by CODM on monthly basis. The whole time director(s) monitor the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.
The following summary describes the operations in each of the Company's reportable segments:
1 Air Ticketing: Through an internet and mobile based platform and call-centres the Company provides the facility to book and service international and domestic air tickets to ultimate consumer through B2C (Business To Consumer)
and B2B2C (Business to Business to Consumer) channel. Both these channels share similar characteristics as they are engaged in facilitation of air tickets. Management believes that it is appropriate to aggregate these two channels as one reporting segment due to similarities in the nature of business.
2 Hotels Packages: The Company provides holiday packages and hotel reservations through call-centers and branch offices. The hotel reservations form integral part of the holiday packages and accordingly management believes that it is appropriate to aggregate these services as one reportable segment due to similarities in the nature of services.
3 Other services primarily include the income from sale of rail and bus tickets. The other services do not made any
of the quantitative thresholds to be a reportable segment for any of the periods presented in these 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 financial statements.
Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The fair values of the Company's advances are determined by using discount rate that reflects the incremental borrowing rate as at the end of the reporting year.
40 FAIR VALUE HIERARCHY
ALL financial instruments for which fair value is recognised or disclosed 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: This level of hierarchy includes financial assets that are measured by reference to quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: This level of hierarchy includes financial assets that are measured using inputs, other than quoted prices included within level 1, that are observable for such items, directly or indirectly.
Level 3: This level of hierarchy includes items measured using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data.
Specific valuation techniques used to value financial instruments is discounted cash flow analysis.
The following table provides the fair value measurement hierarchy of the Company's assets and liabilities:
41 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's activities are exposed to variety of financial risk; credit risk, liquidity risk and foreign currency risk.
The Company's senior management oversees the management of these risks. The Company's senior management ensures that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Company reviews and agrees on policies for managing each of these risks which are summarized below:
(a) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables), including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
(i) Trade receivables are typically unsecured. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business.
(iii) Financial Guarantees
The Company is exposed to credit risk in relation to financial guarantee given to bank. The Company's maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on. Financial guarantees are accounted as explained in note 2.10. The maximum amount Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee is ' 337.90 Mn. Based on expectations at the end of the reporting year, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include
trade payables in foreign currency.
(a) Foreign currency risk:
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The Company undertakes transactions denominated in foreign currencies and thus it is exposed to exchange rate fluctuations.
The Company has a treasury team which evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks and advises the management of any material adverse effect on the Company.
47 The Company is yet to file Annual Performance Report to Authorised Dealer in respect of EaseMyT rip Middleeast DMCC
and EaseMyTrip SG Pte. Ltd. for the financial year 2019-20, 2020-21, 2021-22 and 2022-23.
48 On July 08, 2023, the Company entered into a General Sales Agreement (GSA) with SpiceJet Airline to sell, promote, and market passenger tickets and other products and services to passengers in India effective August 01,2023.
49 During the current year, the Company has acquired 51% controlling interest in the following Companies which operate as tour and travel operators:
i) Tripshope Travels Technologies Private Limited ('TTTPL') vide Share Purchase agreement ("SPA") dated August 02, 2023, for a consideration of ' 178.50 Mn.
ii) Dook Travels Private Limited (DTPL) vide SPA dated August 02, 2023, for a consideration of ' 163.20 Mn.
iii) Guideline Travels Holidays India Private Limited ('GTHIPL') vide SPA dated August 02, 2023 for a consideration of
' 306.00 Mn
The consideration for acquisition of share in these Companies has been discharged through issuance of 1,46,14,168 of equity shares of the Company @ ' 44.32 per share on preferential basis to the respective shareholders of above entities.
Further, the control and shares against the above acquisitions were transferred to the Company on September 27, 2023.
50 During the current year, the Company via Shareholder's cum Share Subscription agreement ("SSSA") has acquired 55% controlling interest in Glegoo Innovations Private Limited for a consideration of ' 30 Mn comprising of 275,000 equity
shares of ' 10 each. As at March 31, 2024; shares have been subscribed and partly paid up to the extent of 14.87 Mn.
51 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled in respect of sales records and for certain changes made using privileged access rights.
Further no instance of audit trail feature being tampered with was noted in respect of accounting software where the audit trail has been enabled.
52 The Company has maintained proper books of accounts as required by law except that the company does not have server located in India for the daily back up. The Company is in the process of setting up the server in India in order to be
in compliance with companies rule 3(5) of the companies act 2013.
53 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India.
However, the date on which the Code will come into effect has not been notified and the final rules / interpretation have not yet been issued. The company will assess the impact of the Code when it comes into effect and will record any
related impact in the period the Code becomes effective.
As per our report of even date
For S.R. Batliboi & Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Easy Trip Planners Limited
ICAI firm registration number: 101049W/E300004
per Nikhil Aggarwal Nishant Pitti Rikant Pittie
Partner Director Director
Membership No.: 504274 DIN: 02172265 DIN: 03136369
Place: New Delhi Place: New Delhi
Date: May 24, 2024 Date: May 24, 2024
Ashish Kumar Bansal Priyanka Tiwari
Chief Financial Officer Company Secretary
Membership No: A50412
Place: Gurugram Place: New Delhi Place: New Delhi
Date: May 24, 2024 Date: May 24, 2024 Date: May 24, 2024
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