Thomas Cook (India) Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2019
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2019
1. The statement of unaudited standalone financial results ("the Statement") of Thomas Cook (India) Limited which includes the financials information of Thomas Cook (India) Limited Employee Trust ("the Company") for the quarter and nine months ended 31 December 2019 has been reviewed by the Audit cum Risk Management Committee and thereafter approved by the Board of Directors in the meeting held on 30 January 2020.
2. The figures for the quarter and nine months ended 31 December 2019 are subjected to limited review by the Statutory Auditors of the Company. The review report of Statutory Auditor is being filed with the Stock Exchange and is also available on the Company's website www.thomascook.in.
3. These financial results have been prepared in accordance with Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules thereunder as amended from time to time and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
4. Pursuant to the provisions of the Listing Regulations, the Company will publish unaudited consolidated financial results in the newspapers. However, the unaudited standalone financial results of the Company will be made available on the Company's website www.thomascook.in and also on the website of BSE (www.bseindia.com) and NSE (www.nseindia.com).
5. The shareholders approved final dividend for the year ended 31 March 2019 @ 37.5% on equity shares of Rs. 1 each of the Company (i.e. Rs. 0.375 per equity share) at the Annual General Meeting held on 9 August 2019 and paid on 27 August 2019.
6. During the quarter and nine months ended 31 December 2019, the Company has allotted 7,650 and 191,059 equity shares of Rs. 1 each respectively, to employees under Employee Stock Option Schemes ("ESOP") of the Company.
7. The Board at its meeting held on 3 October 2019 had approved the amendments to the Composite Scheme of Arrangement and Amalgamation amongst Thomas Cook (India) Limited (TCIL'), Quess Corp Limited ('QCL'), Travel Corporation (India) Limited (TCI'), TC Forex Services Limited (formerly known as Tata Capital Forex Limited) ('TCF'), TC Travel Services Limited (formerly known as TC Travel and Services Limited) (TCTSL') and SOTC Travel Management Private Limited (formerly known as SITA Travels and Tours Private Limited) ('SOTC TRAVEL') and their respective shareholders ('the Scheme') in accordance with the provisions of Section 230 to 232 read with Section 52, 55, and 66 of the Companies Act, 2013. The Scheme inter-alia provides:
i. Demerger of the inbound business of TCI consisting of business of handling inward foreign tourist activity from TCI into SOTC TRAVEL; and
ii. Amalgamation of residual TCI, TCF and TCTSL with TCIL; and
iii. Demerger of the Human Resource Services Business of TCIL (including shares in QCL held by TCIL) into QCL. As a part of consideration, QCL will issue its own shares to the shareholders of TCIL in the ratio of 1889 QCL shares for every 10000 shares held in the Company.
The National Company Law Tribunal ("NCLT"), Mumbai Bench for TCIL and Bengaluru Bench for QCL vide its order dated 10 October 2019 and 7 November 2019 respectively had approved the Scheme o' Arrangement. The Scheme of Arrangement has become effective from Appointed Date i.e. 1 April 2019 but operative from Effective Date i.e. 25 November 2019 being the date of filing of certified cop^ of the Order of NCLT by all the companies with their respective jurisdictional Registrar of Companies. Upon coming into effect of the Scheme, net operating assets including reserves are transferred in the Company with effect from the Appointed Date and accordingly have restated its results for the comparative periods including Earnings Per Share ("EPS") in accordance with IND AS 103 Business Combination.
The impact on the statement are as follows: For Table, kindly refer Corporate Announcements on www.bseindia.com.
Pursuant to the Scheme, the Company has acquired net assets/(liabilities) including reserves of Rs. 9,952.2 lakhs, Rs. 115.5 lakhs and Rs. (2,200.0) lakhs of residual TCI, TCF and TCTSL respectively by way of amalgamation and transferred net operating assets of its Human Resource Services Business (including its investment) to QCL of Rs. 16,644.1 lakhs by way of demerger in accordance with the Scheme of Arrangement with effect from Appointed Date. Consequently the difference between assets and liabilities acquired and transferred aggregating to Rs. 24,511.8 lakhs has been debited to "Reserve or restructuring account". As prescribed in the Scheme of Arrangement, balance in Reserves on restructuring account is adjusted with Capital Redemption Reserves and Security Premium.
8. During the quarter, the Company formed Thomas Cook Employee Benefit Trust, which subscribed 73,56,122 shares of the Company for INR 11,048.8 lakhs out of the loan received from the Company EPS is calculated after reducing the equity shares of the Company held by the Trust. Pursuant to the Scheme of Arrangement the Trust received 13,89,571 shares of QCL, Mark-to-Market ("MTM") gain for the quarter and nine months ended 31 December 2019 on QCL shares held by the Trust amounting to Rs. 825.5 lakhs is included in other income.
9. Pursuant to the Scheme of Arrangement, the employees of the Company are entitled to shares of QCL along with those of TCIL in the same share entitlement ratio. As per IND AS 102 Share Based Payment the grant of QCL shares is considered to be modification of ESOP Schemes, the impact of modification for the quarter and nine months ended aggregates to Rs. 39.8 lakhs is included in the Employee Benefit Expenses.
10. During the quarter, the Company purchased the rights to the Thomas Cook Brand for India, Sri Lanka and Mauritius markets from Thomas Cook UK and others, through Court appointed Special Manager: for a consideration of Rs. 1,817.1 lakhs which is being amortised.
11. The Company has adopted IND AS 116 "Leases" using the modified retrospective approach with effect from 1 April 2019. The Company has applied the standard to its leases with the cumulative impact recognised on the date of initial application (1 April 2019). Accordingly, the comparative periods have not been restated.
This has resulted in recognising a right-of-use assets of Rs. 4,228.9 lakhs and a corresponding lease liability of Rs. 4,124.6 lakhs. A transitional adjustment of Rs. 199.7 lakhs (net of deferred tax of Rs 107.2 lakhs) has been credited to retained earnings as at 1 April 2019.
In the profit and loss account for the current period, the nature of the expenses in respect of operating leases has changed from lease rent in previous periods to depreciation cost for the right-of-use asset and finance cost for interest accrued on lease liability. The adoption of the standard has an impact of increase in total expense by Rs. 24.1 lakhs and Rs. 81.1 lakhs on the standalone financial results for the quarter ended and nine months year ended 31 December 2019.