NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

Notice is hereby given that the Seventeenth (17th) Annual General Meeting of the Shareholders of Indian Railway Catering and Tourism Corporation Limited will be held as under: -

Day                        :  Tuesday                                           

Date                      :  September 27, 2016

Time                      :  1200 hrs                           

Venue                  :  Conference Hall, 2nd Floor, Railway Board, Rail Bhawan, New Delhi-110001

to transact, with or without modifications, as may be permissible, the following businesses:

ORDINARY BUSINESS

1.To receive, consider and adopt the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2016 together with the Board's Report, the Report of Auditors thereon and Comments of the Comptroller & Auditor General of India, in terms of Section 143(6) of the Companies Act, 2013.

2.To declare final dividend on equity shares for year ended on 31st March, 2016.

3.To fix their remuneration of the statutory auditors for the financial year 2016-17 and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

RESOLVED THAT Board of Directors of the Company be and is hereby authorized to fix the remuneration of the Statutory Auditors to be appointed by  the Comptroller  and Auditor General of India for the financial year 2016-17  on the recommendations made by the Audit Committee .

SPECIAL BUSINESS

4.To ratify the remuneration of Cost Auditor for the financial year 2016-17 and 2017-18.

To ratify the remuneration of Cost Auditor for the financial year 2016-17 and 2017-18 and in this regard, if thought fit, to pass with or without modification(s), the following resolutions as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-

enactment(s) thereof, for the time being in force) and upon the recommendation of Board of Directors, the remuneration of M/s Sanjay Gupta & Associates,  Cost Accountants, appointed by the Board of Directors of the Company, to conduct cost audit of accounting records maintained by Rail Neer Plants of the Company for the financial year 2016-17 and 2017-18 on a remuneration of Rs. 2,75,000/-   (Rupees Two lakhs Seventy Five Thousand only)  per annum plus taxes as applicable and  inclusive of boarding/lodging/other out of pocket expenses be and is hereby ratified.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.

By order of the Board of Directors of

Indian Railway Catering and

Tourism Corporation Limited 

Sd/-

(Suman Kalra)

Company Secretary

Tele No.: 011-23327746

Email: companysecretary@irctc.com

Website: www.irctc.com

Date:  01.09.2016

Place: New Delhi

Registered and Corporate Office:

11th Floor, B-148, Statesman House,

Barakhamba Road, New Delhi 110001.

CIN: U74899DL1999GOI101707

To

1.All the shareholders of Indian Railway Catering and Tourism Corporation Limited.

2.M/s Serva Associates, Chartered Accountants, Statutory Auditor.

3.M/s Akhil Rohtagi & Associates, Company Secretaries, Secretarial Auditor.

4.All Directors of the Company. 

NOTE:

1.A member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote on poll instead of himself / herself and that the Proxy need not be a Member of the Company. In order to be effective, the proxy form duly completed should be deposited at the registered office of the company not less than forty eight hours before the scheduled time of the Annual General Meeting. Blank Proxy form is enclosed.

2.A minimum of five members personally present other than proxy will be Quorum for the meeting.

3.Kindly note that if at the expiration of half an hour from the time appointed for holding the meeting,  quorum  is not present, the meeting shall stand adjourned to the same day in the next week or if that day is a public holiday until the next succeeding day which is not a public holiday at the same time and place or to such other day and at such other time and place, as the Board may determine, and if at such adjourned meeting, a quorum is not present at the expiration of half an hour from the time appointed for holding the meeting, the member, present shall be the quorum, and may transact the business for which the meeting was called.

4. The relevant explanatory statement pursuant to section 102(1) of the Companies Act, 2013 in respect of special businesses as set out in the notice are annexed hereto and forms part of this notice.

5.The Relevant statutory records/ documents including documents referred to in the item of businesses set out in this Notice shall be available for inspection by the Members at the Registered Office of the Company till the end of the meeting.

6.A form for Attendance slip is enclosed

7.Route Map for the venue of the meeting alongwith relevant landmark is enclosed.

8.The Notice of the 17th AGM is also placed on the website of the Company at www.irctc.com

9.The Resolutions, if passed by the requisite majority, shall be deemed to have been passed on the date of the 17th Annual General Meeting i.e. 27th September, 2016.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT, 2013.

The following statements set out all material facts relating to the Special Business mentioned in the accompanying notice:

ITEM NO. 4: To ratify the remuneration of Cost Auditor for the financial year 2016-17 and 2017-18

As per the notification issued by Ministry of Corporate Affairs dated 31st December, 2014, IRCTC is not covered under the purview of Cost Audit with effect from FY 2014-15. However, the Cost audit has been carried out voluntarily as decided by the management.

As advised in the 39th Meeting of Audit Committee held on 4th July, 2016 regarding appointment of Cost Auditor, a limited tender was called from the Cost Accountants firms as per the list available on the website of the Institute of Cost Accountants of India and M/s Sanjay Gupta & Associates, Cost Accountants have been selected through the above process of tender in accordance with the eligibility criteria and lowest quote basis.

Thereafter, the Board of Directors of the Company, on the recommendations of the Audit Committee, at its 81st  meeting held on 17th  August, 2016 has considered and approved the appointment of M/s Sanjay Gupta & Associates, Cost Accountants, Cost Accountant in Practice, as the Cost Auditors of the Company to conduct cost audit of accounting records maintained by Rail Neer Plants of the Company on voluntary basis  for the financial year 2016-17 and 2017-18 , on a remuneration of ` 2,75,000/-(Rupees Two lakhs Seventy Five Thousand only) per annum plus taxes as applicable and  inclusive of boarding/lodging/other out of pocket expenses.

Pursuant to provision of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration, as approved by the Board of Directors of the Company on the recommendation of the Audit Committee, is required to be subsequently ratified by the Members of the Company. Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at Item No. 4 of the Notice for ratification of the remuneration payable to the Cost Auditor for the financial year 2016-17 and 2017-18.

None of the Directors and/or Key Managerial Personnel of the Company and/or their relatives is, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No.4 of the Notice.

The Board commends the Ordinary Resolution set out at Item No. 4 of the Notice for approval by the shareholders.

By order of the Board of

Indian Railway Catering and Tourism Corporation Limited

(Suman Kalra)

Company Secretary

Tele No.: 011-23327746

Email: companysecretary@irctc.com

Website: www.irctc.com

Date: 01.09.2016

Place: New Delhi

Registered and Corporate Office:

11th Floor, B-148, Statesman House,

Barakhamba Road, New Delhi 110001.

CIN: U74899DL1999GOI101707

ATTENDANCE SLIP

Indian Railway Catering and Tourism Corporation Limited

CIN: U74899DL1999GOI101707

Registered and Corporate Office:

11th Floor, B-148, Statesman House, Barakhamba Road, New Delhi 110001

Tel. No.: 011-23311263-64 Fax No.: 011-23311259 Email: companysecretary@irctc.com

Website: www.irctc.com

Name of the Member/Proxy                      :

(In Block Letters)

Address of the Member/Proxy                 :

Folio No. :

No. of Shares held                                           :

I certify that I am a member/proxy for the member of the Company.

I hereby record my presence at the 17th Annual General Meeting of the Company held on Tuesday, 27th day of September, 2016 at 12.00 p.m. at Conference Hall, 2nd Floor, Railway Board, Rail Bhawan, New Delhi-110001.

Signature of Shareholder / Proxy

Please fill and sign this attendance slip and hand it over at the venue of the Meeting.

Form No. MGT-11

PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and Rule 19 (3) of the Companies (Management and Administration) Rules, 2014]

CIN:                                        U74899DL1999GOI101707

Name of the Company:        Indian Railway Catering and Tourism Corporation Limited

Registered Office:                11th Floor, B-148, Statesman House, Barakhamba Road, New Delhi 110001.

Tel. No.:                     011-23311263-64                    Fax No.:                      011-23311259

Email: companysecretary@irctc.com                       Website:                     www.irctc.com

I/We, being the member (s) of shares of the above named company, hereby appoint:

(1)        Name:..... Address: .................................................................

E-mail Id:Signature:.............., or failing him/her;

(2)        Name:..... Address: .................................................................

E-mail Id:Signature:.............., or failing him/her;

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventeenth (17th) Annual general meeting of the company, to be held on the day of. At. a.m. / p.m. at(place) and at any adjournment thereof in respect of such resolutions as are indicated below :

Signed this day of2016.                        Signature of the Shareholder

Signature of first proxy holder                        Signature of Second proxy holder

1)This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the Meeting.

2)For Resolutions, Statement pursuant to Section 102 of the Companies Act, 2013 and Notes, please refer to the Notice of 17th Annual General Meeting.

3)*This is only optional. Please put a X in the appropriate column against the resolutions indicated in the Box. If you leave the For or Against column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

4) Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes.

DIRECTORS REPORT

Distinguished Members,

Your Directors are delighted to present the 17th Annual Report on the business and operations of your Company for the financial year ended 31st March, 2016, along with the Audited Financial Statements, Auditors. Report, Secretarial Auditors. Report and the Review of Financial Statements by the Comptroller & Auditor General of India for the period under review. It gives us an immense pleasure to inform you that your Company has continued the journey of excellent performance for this year also. The detailed financial and operational performance of the Company is produced in the report.

1.FINANCIAL RESULTS

The key highlights of the financial performance of IRCTC during FY 2015-16 alongwith the corresponding performance in FY 2014-15 are mentioned below:

                                                                                                                                                              (Rs. In Crores)

a.Contribution to Revenue of Ministry of Railways

The Company contributes by way of revenue share to Railways and the total share of such contribution in FY 16 comes to Rs. 396.46 crore against the share of Rs. 52.03 crore during the previous year. Contribution to the revenue of Railways comprises of Haulage Charges, Concession fee, License fee, User Charges and Dividend.

b.Dividend

Ministry of Railways, Govt. of India vide its Order No.2011/PL/64/3/Pt.1 dated 29.04.2016 issued Presidential Directive stating therein that for the year ended on 31st March 2016, the Company is required to pay Dividend @ 40% of its profit after tax. Therefore, taking into consideration the above Presidential Directive, the Board of Directors has recommended a Final dividend of Rs. 75.45 crore (40% of net profit) excluding Dividend Distribution Tax, for the financial year 2015-16, which is approx.  Rs. 377 % of the paid-up share capital, as against Rs. 26.13 crore (131% of the paid-up share capital) paid in the previous year. The payment of final dividend is subject to the approval of Shareholders at the ensuing Annual General Meeting which shall be paid to members after the approval.

c.Capital Structure

As on 31st March, 2016, paid-up share capital of the Company remained at Rs. 20 crore divided into 2 Crore Equity Shares of Rs. 10 each. President of India (Government of India) through Ministry of Railways and its nominees holds the entire paid up share capital of the Company and there was no change in the capital structure of the Company during 2015-16.

2.OPERATIONAL PERFORMANCE

The segment wise operational performance of the Company during 2015-16 is detailed below:

a.Catering & Hospitality;

b.Internet Ticketing;

c.Travel &Tourism;

d.Packaged Drinking Water (Rail Neer).

a.CATERING & HOSPITALITY:

The Catering and Hospitality segment of IRCTC is divided into:

1)Railway Catering: Railway catering includes Departmental Catering, Mobile Catering, Static Catering like Food Plazas, Janahars, Executive Lounges, Budget Hotels, Rail Yatri Niwases, Base Kitchens, Minor units etc.

2)Non Railway Catering (NRC): Non Railway Catering includes Central Kitchen, Institutional Catering, Office Catering, Event Catering and Management, Facility Management, Guest House Management, Housekeeping services, Consultancy Services, Food Courts, Kiosks etc.

The business segment of Departmental Catering generated an income of Rs. 255.56 crore in the year 2015-16, as compared to Rs. 296.42 crore in the year 2014-15. The NRC units contributed Rs. 27.28 crore to the total revenue in the year 2015-16 as compared to the Rs. 35.16 crore in the year 2014-15. The loss from Departmental Catering during the year 2015-16 also increased to Rs. 66.09 crore from Rs. 57.32 crore of previous year.

Business segment of Licensee catering generated an income of Rs. 76.49 crore in the year 2015-16 as compared to Rs. 69.79 crore in the year 2014-15. As on 31.03.2016, IRCTC had 33 mobile units (including 17 Duronto), 4 Base Kitchens, 10 Jan Aahars and 2 Refreshment Rooms, after the complete transfer of licensee units and partial transfer of departmental units.

1.Railway Catering

i.Mobile Catering

During the year, IRCTC managed on-board catering services in 30 pairs of Premium trains, based on Dynamic fare system. However, w.e.f. July, 2015, Ministry of Railways issued guidelines, whereby, it stopped running of Premium trains and introduced Suvidha trains. The onboard catering services in Suvidha trains were based on the pattern of existing Rajdhani/ Shatabdi, Duronto and Mail/ Express trains. Ministry of Railways subsequently entrusted IRCTC with the responsibility to manage the onboard catering services in Suvidha trains also. During the year, 20 pairs of Suvidha trains were managed by IRCTC.

Ministry of Railways also introduced Madgaon Rajdhani and Mahamana Express trains and IRCTC was mandated to manage the onboard catering services in these trains. Both the trains were taken over by the Company and onboard catering services in the trains were managed.

IRCTC also managed on-board catering services in 36 pairs of Mail/Express, 1 Rajdhani and 2 Shatabdi trains through award of temporary licenses for onboard catering services. During 2015-16, in total, IRCTC operated 17 Duronto, 06 Rajdhani, 02 Shatabdi and 08 Mail Express trains through departmental operations.

ii.Static Catering

During the year, 13 Jan Ahaars, 05 Refreshment Rooms and 128 Minor Units (Stalls, Trolleys etc.) were managed by IRCTC. Out of these units, 03 Jan Ahaar, 03 Refreshment Rooms and 02 Minor units were handed over to Zonal Railways.

iii.Base Kitchens

As on 31st March, 2016, IRCTC operated 4 Base Kitchens at New Delhi, Howrah, Ahemdabad and Patnadepartmentally. These base kitchens supply food to prestigious Rajdhani/Shatabdi/Duronto trains running through departmental operations. The Base kitchens at New Delhi, Howrah and Patna are ISO 22000:2005 certified and the meals are prepared by professionally trained staff. Regular inspections are conducted for monitoring the food quality and also for ensuring the standards of meals prepared in the Base Kitchens.

IRCTC also operates a Food Factory as Central Kitchen at Noida for supply of meals and snacks to Trains as well as Corporate Sector.

iv.           Food Plazas/Fast Food Units/Food Courts

During the year, the Company commissioned 30 Food Plazas/Fast Food Units, making the total number of operational units to 198. The company also awarded 51 units at annual license fee of Rs.15.00 crore during 2015-16.

v.E-Catering

IRCTC introduced a new and dynamic wing of supplying food to railway passengers at their berth under E-catering w.e.f. 25.09.2014. Initially, the project was based on call centre based services called tele-catering. However, an exclusive website www.ecatering.irctc.co.in for the purpose of E-Catering was launched on 23.01.2015. The services of E-catering are now available for passengers through this website along with telephone calls and SMSs. Also, a mobile application with name Food on Track has been developed for facilitation of online ordering passengers while on move.

At the time of launch, the average meals booked per day was around 1 (Oct 2014), which has now increased to about more than 3000 meals per day (May 2016), showing an encouraging trend in the meal orders thereby indicating growth in the services.

In October, 2015, Ministry of Railways issued directions and permitted the services of E-catering to be extended to all trains passing through nominated 45 A1 category stations. In accordance with Rail Budget 2016-17, the Company has been advised to extend E-catering to all 409 A1 & A Category stations.

The Company has taken steps to include more F&B Brands including the reputed local and national level brands. This is being done with a view to offer choice(s) and options to the travellers all over Indian Railways. Self Help Groups (SHGs) are also being encouraged to get associated with these services at various locations and they have already joined the project from Ernakulum, Vijaywada and Bhopal.

As a shared endeavour of Indian Railways and IRCTC for providing good quality food and reliable service to train passengers; public awareness is critical to the success of this endeavour. IRCTC has also taken steps to spread awareness about the services through distribution of pamphlets, posters, and press releases, in addition to advertisements in news papers. In this regard, Railways has also been requested for station announcements, awareness drives, posters in and around station area for increasing public awareness.

The web page for E-Catering has also been upgraded and made more user friendly by incorporating innovative steps for improved user engagement.

vi.Executive Lounges

As  per  the  policy  directives issued by Ministry of Railways, IRCTC has been advised to invest in the infrastructure of Executive Lounges and these would be IRCTCs branded outlets. Consequently, Executive Lounges at Agra Cantt. And Jaipur have been constructed and commissioned by IRCTC. Besides this, contracts have been also awarded for setting up, operation, maintenance and transfer back of Executive Lounges at seven more stations viz. Howrah, Visakhapatnam, Jammu, Lucknow, Kanpur, Vijayawada and Varanasi out of 49 approved stations.

vii.E-Bed Rolls

In order to provide clean and hygienic bed rolls to the rail passengers, E-bed rolls scheme was launched at four major stations on 7th   and 10th February 2016 and a total of 877 bed rolls were sold till 31st March 2016.

Under this scheme, a passenger can order the bed roll through website and collect the same at the designated pick up points at the stations and can carry the same with them after use. The scheme has been liked by the passengers.

viii.         Election Special Trains

IRCTC in close coordination with Ministry of Home Affairs (MHA), CRPF Head Quarters and Control Offices, managed the Catering Services for Central and State Election Special Trains and the splinter coaches from 9th March, 2016 till 24th May, 2016. During that period, around 8 lakh meals worth Rs. 10 crore (approx.) were supplied in 118 trains and splinter coaches all through the assembly elections in the states of Assam, West Bengal. Tamil Nadu, Puducherry and Kerala.

2.Non-Railway Catering (NRC)

The turnover from NRC business during the year was Rs. 27.28 crore against the turnover of Rs. 35.15 crore in the previous year. As on 31.03.2016, the number of NRC units was 40.

As per the Railway Budget announcement for the year 2016-17, IRCTC has been entrusted to take over catering services of Indian Railways in a phased manner. In the initial phase, all mobile units are proposed to be transferred to IRCTC. To manage the same and have real time monitoring of services provided through mobile units, large number of resources are required. Therefore, it has been decided that Company will gradually exit from NRC business and redeploy the available manpower for monitoring/operation of mobile units including Base Kitchens.

Central Kitchen (ISO 22000:2005 certified)

Presently, Central Kitchen is providing quality meals and snacks to the prestigious trains. This is one of its kinds, ultra modern Food Factory in line with the major Air Flight Catering Kitchens to produce meals of high quality and standards. The factory is fully automated with equipments from the best of the manufacturers from India and abroad and managed by professionals from the hospitality industry.

During the year, an hour long docu-feature on the Central Kitchen Noida, was telecast on National Geographic, an International Channel, in their programme Mega Kitchens, wherein, IRCTCs Kitchen was featured as one of the biggest nine kitchens of the country, thereby taking IRCTC as F & B leader on global platform.

Future Potential & Planning:

Railway Catering:

Food Plazas/Fast Food Units/Food Courts

At present, IRCTC is operating 202 Food Plazas and Fast Food Units over Indian Railways. The annual earnings from these units is Rs. 30.90 crore. Another, 112 units are at various stage of commissioning. The Company plans to commission around 36 units in 2016-17, which will give additional annual earnings of Rs. 6.00 crore.

Executive Lounges

During 2015-16, Company awarded contract for 10 Executive Lounges at various Railway stations, namely, Jaipur, Agra Cantt., New Delhi, Howarh, Vishakhapatnam, Kanpur Central, Jammu Tawi, Lucknow NR, Vijaywada and Varanasi Jn, to provide upgraded services to the railway passengers.

Retiring Room Complexes

The Company has also approached Ministry of Railways to handover the management of Retiring Room Complexes on Indian Railways network. Presently, Retiring Room Complex facilities are available at 554 stations, consisting of around 2000 rooms. IRCTC will upgrade Retiring Room Complexes on PPP (Public Private Partnership) model and the same will be operated under ROT (Renovate-Operation-Transfer) model.

E-Catering

For enhanced performance of E-Catering, atleast 5 vendors other than Food Plaza/Fast Food Units are targeted to be empanelled for each of the 409 A1 & A category stations; more specialties of regional cuisine are proposed to be made available; the website and mobile app are planned to be upgraded to match the standards of market and customer expectations with nationwide publicity. A complete end to end electronic feedback mechanism from consumer is also in pipeline to be established.

Central Kitchen

The catering by Central Kitchen to institutions/corporates within NCR was making losses primarily due to competition from unorganized sector and high cost of manpower. Loss making NRC units which were catered by Central Kitchen have been closed down. Presently, the operation of Central Kitchen is restricted to take care of Railway catering requirement for Rajdhani/Shatabdi/Duronto trains and to supply evening tea/snacks, dinner/lunch. The Company is in process to take a long term view regarding operation of Central Kitchen due to continuous losses from units and keeping in view of the transfer of catering services from Indian Railways.

Monitoring System Customer Satisfaction Survey

In IRCTC, quality of Food and Service is gauged by conducting Customer Satisfaction Surveys through Third Party professional agencies. IRCTC has empanelled 5 (five) such agencies for a period of 3 years.

During 2015-16, Duronto/Rajdhani Trains, NRC Units, Food Plazas/ Fast Food Units and Base Kitchens/Food Pick-up Points were covered under Customer Satisfaction Surveys. Two rounds of surveys were done in Sep-Nov, 2015 and Jan- March, 2016 respectively. The overall score of Rajdhani and Duronto was 84% and 80% in final round respectively.

Customer Satisfaction Surveys have also been conducted in Food Plazas/Fast Food Units during the year 2015-16. A total of 179 such units were covered, over which an average customer satisfaction level was gauged at 77%.

Passenger Satisfaction Survey

As per Ministry of RailwaysRs. instructions, Passenger Satisfaction Survey was conducted in the month of Jan-Feb, 2016 at 409 A-1 and A Category Stations over Indian Railways Network under Swachh Rail, Swachh Bharat Abhiyan.

Food Safety Audits

Keeping in view the impact of food safety on public health, food safety audits are conducted by IRCTC through third party agencies accredited by National Accreditation Board for Certification Bodies (NABCB).

ISO Certification

IRCTC takes consistent steps to improve the quality of catering services including ISO certification. During the year 2015-16, 21 Food Plazas/Fast Food Units were certified with ISO 22000:2005 certification, taking the total number to 131 out of 190 licensee-operated units, as on 31st March, 2016.

Complaint Monitoring and Action Taken

A total of 1073 complaints were received from train passengers during 2015-16 as against 1252 in the previous year having a reduction of 14.3%. With effect from January, 2014, parameterization of complaints have been done to identify the root cause of complaints, focusing on multiple raised issues in a single complaint, providing roadmap for improvement, making correlation between complaints and the input provided etc.

Preventive and punitive actions have been taken based on the nature and seriousness of the complaints. All the complains were addressed and methods such as penalising service provider, D&AR action against staff, counselling and warning have been adopted at appropriate levels.

b. INTERNET TICKETING

If one witnesses the welcome sight of shortening of queues at rail ticket counters across the country, the credit goes to the e-ticketing initiative of your Company which has emerged as a single window solution for online booking of train and air tickets, catering, tourism and portal shopping. Leveraging technology to launch a raft of pioneering measures, the Company has now created for itself a reliable and super efficient passenger/customer- friendly brand.

IRCTC is now the largest website in the Asia-Pacific region with a transaction volume of 15-18 million per month and 12 million visitors a month. Its user base currently stands at 4.25 crore with around 15,000 users being added per day.

Powered by its exponential growth, e-ticketing now accounts for 58.5% of reserved tickets in India booked online, leaving behind several high profile e-commerce sites worldwide. The Companys phenomenal growth in e-ticketing has been triggered by a robust process for e-reservation, which facilitates booking for all types of credit cards, major debit cards and cash cards and net banking facilities. On an average, more than 5.45 lakh tickets were sold daily through IRCTCs website during 2015-16.

Launching of Internet Ticketing by IRCTC has resulted in savings for Indian Railways on their infrastructure like buildings, air-conditioning, electricity, furniture, staff etc. The spirit behind the project was that instead of the customers going to Passenger Reservation System (PRS), the PRS should be brought to the customer. The booking of railway tickets through internet is now available 24*7*365.  The site remains closed only for 35 minutes i.e. from 2345 hrs to 0020 hrs. In order to make the system more user friendly, e-mails and SMSs are sent to the customers on completion of successful booking of e- ticket with details of the e-ticket viz PNR, Tickets status, Fare charged etc.

Presently full fare tickets including Tatkal, Child tickets and tickets for senior citizens at concessional rates can be booked through the website. A nominal service charge of Rs. 20/- only per e-ticket in case of sleeper class (SL) and Second sitting(2S) and Rs. 40/-per e-ticket in case of all other classes(1AC, 2AC, 3AC, CC, 3E, FC) irrespective of the number of passengers booked on an e-ticket was levied during the financial year 2015-16.

Earnings:

a.No. of E-Tickets Booked

Growth of e-ticketing on IRCTC website has been phenomenal since its  launch  in  year  2002-2003. During the year 2015-16, 1992.80 lakh tickets have been booked as compared to 1830.80 lakhs during year 2014-15.

c.No. of Passengers

During the years 2015-16, 3595.82 lakh number of passengers bookes e-tickets on IRCTC Website.

c. E-ticketing Revenue Collection

There has been tremendous growth in the revenue collection of train fare and service charge being collected from users at IRCTC website. During the year 2015-16, a total of Rs. 24022.65 crore has been collected from the users.

d.Service Charge

IRCTC collected a nominal Service Charge of Rs. 20/- per ticket for non AC classes and Rs. 40/- per ticket for AC classes excluding Service Tax.

New Initiatives taken during 2015-16

During the year, various initiatives were taken to increase non business revenue through monetizing the digital resources available with us. Some of the relevant measures are detailed below:

Mobile Booking

Mobile Internet is expanding rapidly in our country. In order to address need of this market segment, IRCTC has launched several products for booking tickets using mobile phones. Mobile App booking and downloads during the year have been as under:

Co-Branding

Through co branding initiative, IRCTC has tied up with Amazon which has given an annual revenue of Rs. 18 Cr.

Banner Advertisement

The banner advertisement in our website has been done through Google, which has given the Company, an advertisement revenue of Rs. 20 Crores and to further explore the possibilities, the Company started contextual advertisements and the revenues earned were up to the tune of Rs. 8.36 Crores.

Unreserved Ticketing

The unreserved ticketing through mobile app UTS has been launched last year and this year the same has been extended to eight new sections of NR, ER, SCR and SER. During the year, more than 1.11 lakh tickets were sold amounting to Rs. 2.25 Crores. Efforts are being made to make the scheme more popular by reducing the pain points for the passengers.

Upgradation  of  Websites

In order to improve the look and feel, the tourism portal and the Maharajas Express websites have been given a new makeover.

Next Generation E-Ticketing System (NGeT)

E-ticketing today constitutes about 58.5% of total reserved tickets on Indian Railways. IRCTC has been continuously working to improve the software and augment supporting IT infrastructure at Data Centre to give improved services and booking experience to users. Next Generation E-Ticketing System (NGeT) Capacity has been enhanced from 7200 tickets per minute to 15000 tickets per minute; enquires have been increased from 1000 to 3000 per second and concurrent user connections have increased to 3,00,000 from 1,20,000 connections.

Under NGeT system, booking of 15,884 tickets per minute was observed on 14th November 2015. A new state of the art Data Centre has been set up in CRIS premises at Chankayapuri, New Delhi for this system.

Highlights of Internet Ticketing  

During the year, through NGeT (Next Generation E-Ticketing System), a total of 1992.80 lakhs tickets were booked.

   On 1st April 2015, IRCTC achieved highest ticket bookings i.e. 13,45,519  tickets in a day.

   Hindi e-ticketing website was launched on 08th July 2015.

   Booking through mobile e-wallets i.e. Paytm wallet, MobiKwik Wallet and mRupee Wallet was launched on 22nd April, 2015, 31st December 2015 and 09th February 2016 respectively.

   ATAS (Alternate Train Accommodation System) was launched on 1st November, 2015.

   Facility of Online Journalist booking was launched on 15th March 2016.

   Online Current Booking facility through website was launched on 13th November, 2015.

   IRCTC started the facility of Preferred Bank while doing payments, which allows user to select up to 6 payments options under once screen.

   Boarding Point Change: From 28th January 2016, users can change their boarding point station online 24 hours before schedule departure of the train.

   Booking for Suvidha Trains and Mahamana Train was launched on 07th July 2015 and 21st January 2016 respectively.

   Online Feedback Survey  and Online Captcha Survey was launched on 01st September 2015 and 28th  November 2015 respectively

   IVRS based Passenger Feedback was launched on 01st  July 2015.

   Changes related to New Refund Rules were implemented w.e.f. 12th November 2015 and Changes related to Child Fare were implemented w.e.f. 23rd December 2015.

   Mobikwik & PayU as a payment option on IRCTC mobile app launched on 24th  November 2015 and 06th  April 2016   respectively.

   Migrated more than 1 lac Retail Service Provider (RSPs) into Next Generation e-ticketing system.

   To implement greater transparency into the system, all Retail Service Providers (RSPs) are allowed to book ticket through Digital Certificate only.

   Ticket booking facility to Controller General of Defence Accounts extended across more than 2000 locations of India including provisioning of i-ticket booking, where defence personnel can now book ticket within their units and collect i-ticket (PRS ticket) across any PRS counter of India.

c.TRAVEL AND TOURISM

Travel and tourism is the largest service industry in India. The main objective is to develop and promote tourism, maintain competitiveness of India as a tourist destination, improve and expand the existing tourism products to ensure employment generation and economic growth. IRCTC has established itself as a big name in this segment and provides a bouquet of various products and services which is useful for all types of tourists. These include Bharat Darshan tourist trains, Semi-luxury tourist train i.e. Buddhist Circuit, Desert & Heritage Circuits, Tiger Express, etc., MaharajasRs. Express, State Special Tourist trains, Rail Tour Packages, Chartered Trains & Coaches, RTP with Charter Trains & Coaches, Hill Charters, Educational Tours, Online Air ticketing, and Corporate Travel Services, Outbound Air packages, Domestic Air packages, Helicopter packages, On-line hotel booking services, Land Tour packages, Cab Rental Services, LTC facilities, customised packages etc.

Travel & Tourism Business of IRCTC has generated an income of Rs. 375.02 Crore in the year 2015-16 as compared to Rs. 362.37 crore in the year 2014-15.

Tourism Portal

IRCTCs tourism portal www.irctctourism.com is a One Stop Travel Shop. The portal, which won the National Tourism Award in the year 2008, is increasingly becoming popular among the travellers and offers various Travel and Tourism services such as on-line booking of tourist trains, tour packages, hotels, cab rental, Concierge Services, air tickets as well as Luxury tourist trains. During 2015-16, semi-luxury train circuits Desert circuit and Heritage Circuit, online hotel bookings (IRCTC OYO Hotels), booking of e-wheelchairs, Outbound Air packages have been launched on IRCTCs Tourism Portal.

Bharat Darshan Tourist Train

IRCTC operates Bharat Darshan tourist trains for the budget segment tourists where the traveller gets to see India at a price of Rs. 800/- per day per pax + service tax, which include rail and road travel, meals, sightseeing, accommodation and accidental insurance. 73 Bharat Darshan trips were operated across the country during 2015- 2016.

Buddhist Circuit Special Train

The Buddhist Circuit Special Train offers a 7 Nights / 8 Days all inclusive tour covering various destinations of the Buddhist Circuit for international as well as domestic tourists. During the FY 2015-16, a total of 291 passengers availed the services of Buddhist Special in 5 trips with total income of Rs. 2.06 crores.

Semi Luxury Trains

The number of trips of Buddhist Circuit train was reduced by 50% on the direction of Railway Board. Hence, IRCTC had launched two Semi-Luxury Circuits on 13th December 2015 and 30th December 2015 by utilising Buddhist rake:

Desert Circuit (covering Jaisalmer, Jodhpur & Jaipur); and

Heritage Circuit (covering Varanasi, Khajuraho & Agra).

Total four trips of Desert circuit, one trip of Heritage circuit and one special FTR train to Roorkee were operated during the year. A total of 304 passengers travelled on these circuits and generated an income of Rs. 91.19 lakhs.

Tour Packages

(i)Rail Tour packages - IRCTC operates all inclusive Rail Tour Packages across the country, which include confirmed rail travel, road transfers, accommodation, meals and sight-seeing at reasonable rates. During 2015-16, a total of 33,049 passengers availed IRCTC tour packages.

(ii)Land Tour packages - IRCTC operates all inclusive Holiday Packages across the country, which includes road transfers, accommodation, meals and sight-seeing at reasonable rates where passengers have to reach the first point of their itinerary on their own and then IRCTC services starts. During 2015-16, a total of 15,442 passengers availed IRCTC tour packages.

(iii)RTP with charter coach and train - IRCTC provides entire tour package services such as Rail travel, road transportation, sightseeing, accommodation, meals etc. to the clients on charter train and coach. During 2015- 16, a total of 2,006 passengers availed IRCTC tour packages.

(iv)Customized tour package - IRCTC also designs customized packages as per the demand and requirement of clients. During 2015-16, a total of 1,729 passengers availed IRCTC customised tour packages.

Educational Tours

IRCTC operated educational tours for students under its Travel to Learn scheme and has tied up with Kendriya Vidyalaya Sangathan and various State Governments as well as private schools for operating educational tours for students. In the year 2015-16, a total of 2,98,656 students availed the facility of educational tours (including students of Local Trips of Delhi Govt. Schools).

Charter Trains and Coaches

IRCTC operated 391 (34 trains & 357 coaches) charters in the year 2015-16 as against 423 (53 trains/ 370 coaches) charters during the previous year. The company is operating hill charters over Kalka-Shimla and DHR mountain railways. The decline was due to change of booking procedures to online procedure of Charter Train/ Coaches in Western Railway, which is a major contributor in this product segment.

State Special trains

IRCTC has operated State Special trains of State Governments of Madhya Pradesh, Chhattisgarh, Rajasthan and Uttar Pradesh. During FY 2015- 16, Punjab State Govt. has also started State Special trains w.e.f. 01.01.2016 to Nanded, Varanasi, Ajmer & Pushkar and Vaishno Devi.

During the year 2015-16, a total of 1,76,439 passengers travelled on State Special Trains in 185 trips. IRCTC earned Rs. 185.31 crores from operation of State Special trains.

Maharajas Express

The Maharajas Express has been awarded as the Worlds leading Luxury Tourist Train for four consecutive years i.e. 2012, 2013, 2014 & 2015 at the World Travel Awards. This train is operated on 5 different itineraries out of which three itineraries are of 7 Night/ 8 Days whereas two itineraries are of 3 Night/ 4 Days. The itineraries cover places like Ajanta, Udaipur, Jodhpur, Bikaner, Jaipur, Ranthambore, Agra, Balasinor, Gwalior, Orchha, Khajuraho, Varanasi and Lucknow.

During the year 2015-16, a total of 1,087 passengers availed the services of Maharajas Express in 29 trips with total income of Rs. 45.90 crores.

Foreign Inbound Tourists (FITs)

During the year 2015-16, FITs were operated with all inclusive services for 217 passengers.

Pilgrim Special Tourist Trains

The product was introduced in the Rail Budget Speech of FY 2014-15. The product was launched by IRCTC on 25.10.2015. During the year 2015-16, a total of 8,515 passengers availed the services of Pilgrim Special Tourist Train in 15 trips with total income of Rs. 8.43 crores.

Election Special Trains

During the FY 2015- 16, IRCTC has operated 70 trains for Bihar, Assam & West Bengal State Assembly Elections, with total income of Rs. 18.65 crores.

Online Air  ticketing

IRCTCs online air-ticketing micro-site provides the services of Domestic as well as International Air-ticket booking at very competitive prices. The website www.air.irctc.co.in has become quite popular in a very short span of time, and the average booking of air tickets in 2015-16 was 2700 tickets per day. The earning of IRCTC from the Air-ticketing segment in FY 2015- 16 is Rs. 10.79 crores.

Corporate Travel Business

IRCTC is offering complete Travel services to Corporates which include air ticketing, booking of domestic as well as International hotels, Passport and visa facilitation, Insurance and Forex. During 2015-16, the company had enrolled 24 new Corporate/ Ministries for IRCTC Corporate Travel Business (total 140 PSUs & Ministries). Even Ministry of Railways has given assurance to nominate IRCTC for Corporate Travel Business for Indian Railways as well as for its PSUs.

Outbound Air packages

During the period FY 2015-16, a total of 1,484 passengers have travelled in International tours operated by IRCTCs zones from different cities of the country as against 393 passengers travelled in previous year. IRCTC earned total Rs. 7.38 crores from this segment.

Domestic Air packages

During the year, IRCTC has operated Domestic Air packages from all the Zones to various destinations like Shirdi, Goa, Delhi, Tirupati, Gangtok, Darjeeling, Kalimpong, Andaman & Nicobar, Ladakh, Srinagar, Kashmir, Mumbai, Mysore, Coorg, Bangalore sectors, etc. and expanding. During FY 2015- 16, approx. 2359 passengers travelled in 181 trips with total earnings of Rs. 3.26  crores  (includes  fixed  departure  of  air packages & helicopter ride Mumbai).

Concierge Service

As announced in the Rail Budget Announcement of FY 2015- 16, concierge services have been started at 26 Railway Stations during the year. Railway passengers can book Cab and porter services at these stations, online through IRCTC tourism portal. The product has been marketed through various modes like newspaper, e-mailers, etc.

Online booking of Retiring Rooms at Stations and Hotel Booking

IRCTC provides the facility of online booking of retiring rooms at 487 Railway stations for railway passengers having confirmed PNR. IRCTC has also entered into an agreement with hotel content provider OYO for online hotels booking through IRCTC Tourism portal. During the year, IRCTC has generated a total revenue of Rs. 2.93 crores from online booking of retiring rooms and hotels.

Gandhi Circuit

As announced in the Rail Budget announcement of FY 2015- 16, IRCTC has operated two Gandhi Circuit trains to cover the footsteps of Mahatma Gandhi. One train was operated from Madurai to New Delhi with 208 pax and other train was operated from Jabalpur to Gujarat with 488 passengers to comply the Rail Budget announcement.

Kisan Yatra

As announced in the Rail Budget announcement of FY 2015- 16, IRCTC operated two special trains for Farmers - One from Madurai to Bhopal in association with M/s Eicher Tractors, with 600 farmers and other train from Lucknow to Pantnagar and Bareilly in association with M/s IFFCO with 500 farmers. Apart from these trains, IRCTC has also operated 9 coaches ex- Bangalore to Bhopal for farmers in association with M/s Eicher Tractors.

Radio Cab Service

Radio cab service has been launched in Delhi NCR region with tie ups with Mega, Meru & Easy cabs.

E- Wheel Chairs

An initiative to help differently-abled and sick passengers has been taken by starting E- wheel chairs at 23 stations. Till the end of the year, total 3520 passengers have availed the benefit of the scheme.

Tie up with OYO rooms

In order to provide low cost and standard hotel facilities. IRCTC has entered into a contract with OYO rooms in the month of Feb  2016. This facility is becoming very popular among the Railway passengers.

MOU with Pawan Hans Limited

An MOU has been signed with Pawan Hans Limited to provide ticketing services to their existing business and to explore the possibilities of making tourist packages involving Helicopter services.

Future Potential And Planning

The Company plans to further enhance tourism business in the coming years by expanding existing business lines as well as introducing new products. Some of these are International and Domestic Air packages, Helicopter air services, Gatiman type Rail Tour packages, Pick up and Drop (Concierge) Services, Cab services, Medical tourism and Inbound as well as Outbound travel services for individual travellers. Specific focus areas for the future are:-

  IRCTC Air Mobile App: To provide easy access of IRCTC Air portal www.air.irctc.co.in  on mobile phones of customer, a Mobile App IRCTC Air has been developed and launched on 31st May 2016.  It will boost online air ticketing of IRCTC.

  IRCTC Tourism mobile App: On the same lines, IRCTC Tourism mobile App is being developed for customers.  It is expected to be launched by July-August 2016.

  Tour Packages: IRCTC would strengthen its portfolio of comprehensive rail based and non-rail based tour packages utilizing regular train services. IRCTC will provide Land packages and customised packages to various destinations by linking the Railway stations.

  Gatiman type Rail Tour packages: IRCTC has offered special packages to passenger travelling by Gatiman Express for Agra ex Delhi. On the same line, IRCTC have also planned to launch Rail Tour packages to popular destinations for railway passengers travelling on connected trains.

  Aastha Circuit: As announced in Rail Budget, IRCTC envisages to operate Aastha Circuit Special Trains in October 2016, connecting various popular pilgrim destinations across India with all inclusive package service, for budget segment people.

  Buddhist Circuit & Semi Luxury Trains: IRCTC is making efforts to increase the utilization of Buddhist rake by operating semi luxury circuits like Desert Circuit, Rajasthan Circuit, Tiger Express, Dakshin Temple Yatra, etc. as well as offering it for FTR charter train to third party.

  State Special Trains: IRCTC is approaching various State Governments for operation of State Special Trains.  State Government of Jharkhand, Odisha, Haryana and West Bengal are keen to run these trains in association with IRCTC. 

  Glass Top Coaches:      The glass top coaches are under manufacturing at Integral Coach Factory, Perambur and Chennai.  Two transparent glass top coaches shall be operated in Araku Valley and one glass top coach will be operated in Kashmir Valley. Ministry of Tourism has released ` 4 crores initially for this project.  Balance payment of approx. ` 8.0 crores is yet to be released by MoT. These glass top coaches are in advance stages of production and expected to be ready by Oct./ Nov. 2016.

  Online Air-ticketing: IRCTC would strengthen customer relations further by setting a target of providing above 90% refund of cancelled tickets within 30 days from the date of cancellation and increase the sale of segments from 2700 to 3000 in a day.

  Corporate Travel: IRCTC will focus on providing cost effective and efficient travel solutions to Corporates, especially to all Ministries/ Govt. offices and PSUs. IRCTC will approach and take on board new PSUs/ Ministries/ Govt. Departments in next FY i.e. 2016-17.

  Domestic Air Packages: IRCTC will widen the ambit of its offerings in domestic air packages by expanding to new destinations after due diligence.

  Educational Tours:  IRCTC be the leading provider of specially designed packages with strong educational content & a caring environment to meet the needs of educational institutions across the country under its Travel to Learn scheme.

  Helicopter Services: Presently IRCTC is providing helicopter services in Mumbai in association with M/s Pawan Hans. IRCTC is exploring the possibility of extending helicopter services in association with M/s Pawan Hans and/or other companies for city tours of Delhi and other cities.

  Pick up and drop Services: IRCTC has planned to expand the Cab and Porter services to railway passenger by adding new stations. Passengers will be picked up from Railway station and dropped at destination and vice-versa. The online booking will be available at IRCTC tourism portal www.irctctourism.com.

  Cab services: Presently this service is available in Delhi/NCR.  IRCTC is planning to expand it in other cities subject to financial viability and demand.  Radio cab service in association with Radio Cab operators through www.irctctourism.com  can be availed by passengers/ travellers at select locations.

  Medical Tourism: IRCTC has tied up with big Hospital chains at Chennai, and Secunderabad where world class medical treatment is available at reasonable cost. IRCTC in collaboration with Hospital chains plans to provide medical packages through its tourism portal and tour packages to accompanying passenger and recovered patient as well.  IRCTC is in touch with Hospital chains of Kolkata and Delhi to expand this segment.

D.PACKAGED DRINKING WATER (RAILNEER)

At present, IRCTC has six operational Rail neer plants located at Delhi, Patna, Palur, Ambernath, Amethi and Parassala, out of which Rail Neer Plants at Amethi and Parassala are under PPP mode. Two more plants are also being set up, out of which, company owned plant is proposed at Bilaspur (Chhattisgarh) and plant at Nagpur is proposed under PPP mode. The commissioning of these plants is expected in 2016-17.

During financial year 2015-16, Rail Neer business registered an income of Rs. 118.48 crores as against Rs. 81.03 crores achieved during year 2014-15. This does not include sale of Rail Neer through departmental catering, amounting to Rs. 15.54 crores as against Rs. 15.11 crores in the previous year. The Segment result (profit) during the year was Rs. 20.97 crores as against profit of Rs. 6.31 crores during the previous year.

Production: The total production of Rail Neer at Nangloi, Danapur, Palur, Ambernath and Amethi plants was 14.40 crore bottles against total production of 11.95 crore bottles in previous year. Commercial production at Rail Neer Plant Amethi and Parassala were started in June 15 and March  16 respectively.

Distribution: Rail Neer produced at Nangloi is distributed on mobile trains and to static catering units primarily in Delhi area and other states such as Haryana, Punjab, Uttarakhand, West U.P. and Rajasthan. In addition, supply is also made to Parliament House, PMO, Railway Board and Ministry of External Affairs.

Rail Neer produced at Palur is distributed on trains starting from two metro cities in South India viz Chennai and Bangalore. Further it is distributed to States of Tamilnadu, Karanatka, Andhra Pradesh and to some parts of Kerala. Rail Neer produced at Danapur is distributed to States of Bihar, West Bengal, Jharkhand, Assam and Odisha.

Rail Neer Produced at Ambernath is distributed mainly in Mumbai area, Pune and Bhusawal in the state of Maharashtra besides Surat and Vadodara in Gujarat. A total of 62 A-1 category stations have been covered with Rail Neer so far.

Rail Neer produced at Amethi is distributed in Central and East Uttar Pradesh and Rail Neer produced at Parassala is distributed to states of Kerala & Tami Nadu.

Initiatives were taken, whereby, around 85 Thousand litres of water was dispatched from its Rail Neer Plant, Nangloi to the earthquake victims of Nepal in April 2015.

Quality: Rail Neer Plant, Danapur, Nangloi and Palur are accredited with ISO: 9001- 2008 quality management system certification.

The result of the test, carried out by accredited laboratories on Rail Neer Packaged Drinking Water indicates that the quality of Rail Neer conforms to European Economic Community (EEC) norms for pesticide residue.

Technology/Capacity upgradation:

To reduce packaging cost, automatic shrink wrapping machine has been installed at Rail Neer Plant, Palur.

Automatic shrink Neer wrapping machine has been installed at Rail Neer Palur in Feb 16 to reduce packaging cost by eliminating corrugated paper tray costing of Rs. 3 per case.

Table showing performance of Rail Neer (Physical & Financial) for all the plants for 2015-16:

Consumption per unit of production:

Future potential & Planning:

v"As perone study, daily requirement of Packaged Drinking Water over Indian Railway network is approx 30 lac bottles/day, against which, at present IRCTCs capacity is 7.54 lac bottles/day, which shall become 8.96 lac bottles/day by the year 2016-17, when plants at Bilaspur and Nagpur will become operational. This will meet about 33% of total requirement over Indian Railways.

v"After installation of Plant and Machinery, the Rail Neer plant at Bilaspur is likely to be commissioned in mid of 2016-17. The installed capacity of the plant is 72000 litres per day

v"The civil construction work at Nagpur, the third plant under PPP mode, is in progress and the plant is likely to be commissioned by 2016-2017. The installed capacity of the plant is 72000 litres per day.

v" LOAs have been awarded for new plants at Lalitpur and Ambala on PPP mode and awaiting for allotment of land from Railways.

v"Land has been purchased for setting up plant at Sankrail (Kolkata) from WBIDC.

v" Further, in an atempt to meet the increasing demand of drinking water in Delhi area, another PDW plant is being Further planned in NCR region. Land has also been purchased from UPSIDC to set up Rail Neer Plant at Hapur near NCR.

Water Vending Machines

Ministry of Railways vide Commercial circular No. 36 of 2015 dated 16.06.2015, issued guidelines for installation and operation of Water Vending Machines by IRCTC to provide purified, chilled & potable drinking water to railway passengers at an affordable rate (@ Rs. 5/- per 1 litre) thereby reducing pollution on account of lesser consumption of plastic bottles and generating employment.

Regarding this, IRCTC has already awarded licenses for installation of 2000 machines over Indian Railways with a target of installing all the machines by March, 2017. Fresh tenders have been invited for installation of another 1100 WVMs.

Highlights of performance of Water Vending Machines:

a.A1, A, B & C categories stations covered in first phase;

b.Stations identified 1200

c.Awarded a total of 62 clusters consisting of one or more divisions.

d.Till 14th July, 2016, 346 Water Vending Machines have been commissioned over 18 divisions. From August 2016 onwards, it is targeted to commission atleast 200 WVMs every month.

e.Tenders for installation and operation of 2000 WVMs over D & E categories of stations are in process.

f.Ministry of Women and Child Development has requested IRCTC to allot 33% of the D & E category stations for installation of WVMs by Self Help Groups duly providing financial assistance by Rashtriya Mahila Khosh.

g.The average sale per machine at A1 & Acategory stations is 500 lts. per day (approx).

h.The above initiative is likely to create an employment generation of around 20,000 individuals.

3.HUMAN RESOURCE DEVELOPMENT

The Human Resource Development (HRD) function in the organization has been designed to maximize employee performance. HRD is primarily concerned with the management of people within organization and focusing on policies and systems. IRCTC firmly believes in the strength of its most vital asset i.e. Human Resource. IRCTC cares and values for its human resource which is the bedrock of success story. To keep the employees. morale high, your Company extends several welfare benefits to them and their families by way of implementing various new and revised welfare policies for its Employees.

As on 31st March, 2016, the Company had a total manpower strength of 3310 employees with the following details:

The percentage of women employees, SC/ST/OBC employees, persons with disabilities and ex-servicemen out of regular employees of the Company is mentioned below:

Government of India has issued policies on reservation(s) from time to time providing for certain percentages of reservation on direct recruitment as well as promotion in specified posts for reservation of SCs and STs. IRCTC, being a Central Government Public Sector Undertaking, strictly complies the reservation policies through maintenance of Post Based Roaster System as prescribed by the Government.

During the year, no recruitment in the reserved category of SC, ST, Persons with Disabilities and Ex-Serviceman was done except 01 (one) recruitment from Other Backward Classes.

4.INDUSTRIAL RELATIONS

The Industrial/Employee relations climate remained congenial and constructive. There were no man-days or man hours lost during the year on account of any industrial conflict/unrest.

5.PARTICULARS  OF  EMPLOYEES  UNDER  RULE  5(2)  OF  THE  COMPANIES  (APPOINTMENT  AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

During the year under review, none of the employees of the Company has drawn remuneration exceeding the limits laid down to be disclosed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

6.USE OF INFORMATION TECHNOLOGY (IT) AND ENTERPRISE RESOURCE PLANNING (ERP)

During the year, IT department implemented a web based Open Sourced ERP system named as Open ERP, 4G Technology of Wifi in Luxury Tourist Train Maharajas Express & Buddhist Mahaparinirman Express/Dessert Circuit Train and various in-house developed Application Program Interface (APIs), viz, Twitter Log, Document Servlet, Email Servlet, InspMISRpt Servlet, Central Kitchen and EmpFile Upload.

Post Implementation support for various in-house developed applications are also managed by in-house dedicated team of IT at www.irctc.com Portal, viz, File Tracking System, MCDO, Sales & Inventory Management System, Feedback Management System, Telecatering system, Email Tracking System, Tender upload & Central Public Procurement Portal and Online tendering through E-tendering system. Zimbra mail server mx.irctc.com was also upgraded during the year.

The Company organised the Inauguration of E-bedroll Service at NDLS by Honble Minister of Railways on 11.02.2016, which was recorded and viewed across zones & regions through IP based CCTV technology.

7.VIGILANCE

The Vigilance Department is headed by a full-time Chief Vigilance Officer. The Vigilance Department of IRCTC consists of 12 officials including CVO. During the year, emphasis continued on Preventive Vigilance to improve the system and procedures, thereby increasing transparency, accountability and reducing the scope for discretion. Preventive/Surprise checks were conducted in all departments of IRCTC working to detect system failures and existence of corruption/malpractices.

During the year 2015-16, the Vigilance Department investigated 12 complaints and conducted 100 Preventive/ Surprise checks resulting in recovery of fine of Rs. 82,59,919/- from catering licensees, e-ticketing agents etc. Suitable punitive action was also taken against the erring officials. On the recommendations of vigilance, 8 system improvements were implemented by the various departments of IRCTC. Sensitization programs for staff, licensees and e- ticketing agents were conducted throughout the year. Regular exchange of views between CMD, CVO, Directors and senior Management was established for better co-ordination and overall improvement in Vigilance functioning. CVC and his officials were consulted regularly for effective flow of instructions/guidelines.

The Vigilance Awareness week was organized from 26th October, 2015 to 31st October, 2015. Various programmes/ competitions/ seminars were conducted in all the offices of the IRCTC with a view to create awareness about preventive measures through system improvement. During Vigilance Awareness Week - 2015, various Skits were organized at New Delhi Railway Station, Chennai Central Railway Station, CST Railway Station and Howrah Railway Station during the week, conveying the message about benefits of e-ticketing, Dos and Donts to be followed while booking e-tickets through IRCTC authorized agents, consequences of booking e-tickets through touts and usage of Rail Neer instead of using unapproved brand of packaged drinking water. AVigilance Bulletin 2015 was published for the first time, encompassing all relevant OMs/GOs/Rules & guidelines and was circulated widely.

The tenure of the previous CVO ended on 15th June 2016 and pending appointment of a new full time CVO, the functions are being discharged by GGM (Services) of the Company.

8.RIGHT TO INFORMATION ACT, 2005

The Right to Information Act, 2005 seeks to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities in order to promote transparency and accountability in the working of every public authority. To deal with RTI Applications in a fast track mode, IRCTC generates one Unique Registration Number (URN) for each application and the same is replied by the concerned PIO well before the prescribed time limit. In Corporate Office and Zonal Offices, PIOs and Appellate Authorities have been nominated as per the provisions of RTI Act, 2005. The list of PIOs, Appellate Authorities and CPIO is available on the IRCTC website www.irctc.com .

During 2015-16, a total of 1044 cases under RTI Act, 2005 were received and all the applications were disposed off in time.

9.DISCLOSURE REQUIREMENT UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE ACT (PREVENTION, PROHIBITION AND REDRESSALACT) 2013

The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereon are being strictly complied with. In accordance with the Act, to provide protection against sexual harassment of women at workplace and to maintain their safety, IRCTC has nominated the committee(s) with the composition as required under the Act, at Corporate Office as well as Zonal offices of the company.

During the year 2015-16, one complaint was received from IT dept. of IRCTC, New Delhi. Immediate enquiry was initiated through Internal Complaints Committee on Prevention of Sexual Harassment of Women at Workplace and the complaint was disposed off in prescribed time limit.

10.DEPOSITS

The Company has not accepted or invited any deposits from the public under Chapter V of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Therefore the information required to be reported under Rule 8 (5) (v) of Companies (Accounts) Rules, 2014 is NIL.

11.PARTICULARS  OF  LOANS  &  GUARANTEES  GIVEN,  INVESTMENTS  MADE  AND  SECURITIES PROVIDED

During the year, the Company has not provided any loan, made any investment; or provided any guarantee under section 186 of Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014. Therefore, the information to be reported under section 186 of the Companies Act 2013 is NIL.

12.CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company did not enter into any contract / arrangement / transaction with related parties under section 188 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 during the year under review and, therefore, there is Rs.NilRs. information required to be reported under Form AOC-2 prescribed under clause (h) of sub-section (3) of Section 134 of the Companies Act 2013 and Rule 8 of Companies (Accounts) Rules 2014.

13.INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place an internal control system which commensurates with size, scale and complexity of its operations. Internal audit constitutes an important element in overall internal control systems of the company. Details of the internal control system are provided in the Management Discussion and Analysis Report given at Annexure-A.

Fraud Prevention and Detection Policy

The Company has in place a Fraud Prevention and Detection Policy. The Policy provides a system for detection and prevention of fraud, misappropriations and other irregularities, reporting of fraud detected or suspected, if any, and fair dealing of matters which pertains to fraud. Fraud Prevention Policy promotes the culture of honesty and opposition to fraudulent practices. The same is available on the website of the Company www.irctc.com.

14.RISK MANAGEMENT

The Company has in place a Risk Management Policy to assist in establishing and maintaining an effective risk anagement framework for the Company. The main objectives of the Policy are to ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated and managed and to establish a framework for the Companys risk management process and to ensure companywide  implementation.

The Company has formed a Board Level Risk Management Committee and the details of the composition, meeting held and terms of reference are included under the Report of Corporate Governance given at Annexure-B.

The Company also has a Committee of GGM level officers, which is assisted by a Chief Risk Officer (CRO). The functions of the Committee are to identify the risks related to the specific business segments of IRCTC in order to establish an appropriate risk management framework in the Company. This Committee also submit their report on regular basis to the Audit Committee and Board Level Risk Management Committee. The Company also nominated its employees of senior level for trainings related to Enterprise Risk Management during the financial year 2015-16.

The Risk Management Policy of the Company is also available on website www.irctc.com.

15.SIGNIFICANT AND MATERIAL ORDERS

There are no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

16.PROCUREMENT FROM MICRO SMALL AND MEDIUM ENTERPRISES (MSMEs)

During the financial year 2015-16, IRCTC has made a total value of procurement from MSME firms of Rs. 18.33 crore (14.40%) out of the total procurement of Rs. 127.30 crore.

MSME guidelines on public procurement policy dated 25th April, 2012 prescribes that 358 items have been reserved for purchase from MSMEs units including handicraft sector. Out of these reserved items, only two items, namely, (i) Corrgugated Paper Board and Boxes and (ii) Paper Conversion Products are applicable for the Company, which are procured 100% from MSMEs only.

In view of above, MSME guidelines have been majorly complied with, except the requirement of 20% of annual procurement of goods & services from MSMEs, as items required by IRCTC, in accordance with Railway Boards guidelines, have limited applicability for MSME manufacturers.

17.PARTICULARS  RELATING  TO  CONSERVATION  OF  ENERGY,  TECHNOLOGY  ABSORPTION  AND FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

The details pertaining to Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given as under:

IRCTC is well aware about environment protection and conservation, technological conservation, renewable energy developments and foreign exchange conservation. All out efforts and initiatives are taken by IRCTC to minimize adverse environmental impacts from its operations, products and services by using processes, practices, materials and products that avoid, reduce and control pollution. Compliance with the relevant environmental laws and effective operation of the various pollution control facilities are ensured at all the Plants/Units. For ensuring a safe and clean environment, Central Kitchen, Noida has installed vermicompost for organic waste and Effluent Treatment Plant for treatment of water and is using solar energy for provision of hot water and two induction base brat pans are being used for cooking food.

All major Installations at Rail Neer Plants are accredited with ISO 9001-2008 and technology/capacity upgradation from time to time at plants ensures to reduce the wastage of water. The Company is also planning to install solar panels at Rail Neer Plants for conservation of energy. The senior officials of the Company are also sent in seminars/trainings which are conducted to spread awareness in this regard.

(A)Technology absorption

Details are mentioned below in the table

(B)Expenditure incurred on Research and Development

Your Company does not undertake exclusive research projects as it does not have presence in such domain. However, to improve the technical capability and enhance competence, some methods and techniques have been developed and innovative systems have been introduced.

(C)Foreign exchange earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows as compare to previous year are mentioned below:

(Rs. In Lakh)

18.PRESIDENTIAL DIRECTIVES

Ministry of Railways has issued a Presidential Directive vide its Order no. 2011/PL/64/3/Pt.1, dated 29.04.2016, stating that with the approval of the President of India, CPSEs are hereby directed that the total dividend for the financial year 2015-16 shall be paid at the rate of 40% of Profit After tax. Further, interim dividend for the financial year 2016-17 shall be 20 per cent higher than the interim dividend 2015-16 and total dividend for the FY 2016-17 shall be minimum 40 per cent of Profit after Tax.

19.RAJBHASHA (OFFICIAL LANGUAGE)

The Company continued its thrust on the Official language implementation as per the Govt. of Indias Rajbhasha Policy. Several steps were taken to increase the use of Rajbhasha in the Company and the Company has proved its commitment to ensure the implementation of the Rajbhasha Policy.

The Company has made several efforts to increase the use and propagation of the official language. Various activities were undertaken during the year like organizing workshops, providing training, organizing meetings, essay competitions, cultural activities, and publishing of bilingual House Magazine PRERNA etc. The e-ticketing site of the Corporation is bilingual. For outstanding and note worthy contribution in Rajbhasha, number of incentives and reward schemes are in force.

A Hindi week was organized in the month of September 2015 in the corporate office in which various competitions, such as Hindi Quiz, Write Hindi in one minute , Hindi dictation, Hindi Essay and Hindi Typing competitions were organized, in which large number of participants took part . Winners were awarded with Cash awards and Certificate.

20.MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, vision and objectives, outlook, sectoral and segment-wise operational performance, its resources and systems, strengths, opportunities, constraints, risks and concerns, strategies, prospects, its internal control systems etc. Aseparate report on the Management Discussion and Analysis is given at Annexure-A.

21.CORPORATE GOVERNANCE REPORT

The Corporate Governance Report highlighting the Companys philosophy on Corporate Governance, composition of Board of Directors and its Committees as on 31st March, 2016, attendance, remuneration of Directors, CEO/CFO Certification and other relevant disclosures is given at Annexure-"B". It is supplemented by the following compliance certificates.

(i)A Certificate from the Chairman and Managing Director and Director Finance (CFO) with regard to authenticity of financial statements (placed at Annexure B-1) in accordance with the guidelines of Corporate Governance of DPE and;

(ii)A Certificate of compliance of Corporate Governance signed by a practicing Company Secretary (placed at Annexure B-2) as per guidelines of Department of Public Enterprises on Corporate Governance.

22.REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY

A separate report on the Corporate Social Responsibility (CSR) and Sustainability containing the Companys CSR and SD activities, Budget and expenditure during 2015-16 is given at Annexure-"C".

23.EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed form MGT-9 is appended to the Directors Report as Annexure "D".

24.MEMORANDUM OF UNDERSTANDING

The performance of the Company in terms of MoU signed with the Ministry of Railways, Government of India for the financial year 2014-15 has been rated as Excellent. Based on the self evaluation, your Company is expecting to achieve an Excellent rating for 2015-16 also.

25.AWARDS AND ACHIEVEMENTS

IRCTC endeavors for an all round growth and the same is reflected in the list of awards and achievements:

1.Indian e-Retail Awards 2015, in the category Leisure and Travel eRetailer of the Year 17.04.2015

2.News Ink legend PSU Shining Awards 2014 in the category Legend PSU of the year for Customer Friendly Operations 27.04.2015

3.Website of the Year India award (WOTY 2014) for IRCTCs tourism website www.irctctourism.com April 2015

4.IRCTC Mobile App IRCTC Connect has been awarded Mobillion 2015 award under the category Best Use of Mobile App 30.04.2015

5.Brand IRCTC listed as Most Trusted Brand in the category of Railways Service Provider in The Brand Trust Report, India Study 2015 by Trust Research Advisory (A Comniscient Group Company).

6.Dainik Bhaskar India Pride Awards 2014-15 Under category Consumer Industry 04.06.2015

7.World Travel Awards 2015 for Maharajas Express, as the Worlds Leading Luxury Train.

8.CNBC-AWAAZ Travel Awards 2015 Maharajas Express adjudged Best Luxury Train 04.06.2015

9.IRCTC has been placed in the list of Rs.100 most influential CFOs of India by Chartered Institute of Management Accountants (CIMA), the worlds largest professional body of management accountants. Mumbai 23.07.2015

10.Director Finance of the Year award to Sh. M.P. Mall by Bharat Nirman, a leading NGO dedicated to promotion of Indian culture and traditions, for its prestigious India Excellence Awards for the year 2015 01.07.2015

11.IRCTC was identified as one of Delhi-NCR Hot 50 Brands at The Delhi-NCR Brand Summit 2015 recognizing excellence in the brand marketing- 28.08.2015.

12.Internationally acclaimed Maharajas Express, owned and operated by IRCTC, has been conferred the coveted Seven Star Global Luxury Award at a function in Bali, Indonesia, further strengthening its brand as the worlds leading luxury train -19.09.2015.

13.EMC award for the IT department- October, 2015.

14.3rd Governance Now PSU award in Mini Ratna I category for ICT initiatives on 17.12.2015, held at The Imperial, New Delhi.

15.Website of the year award (WOTY) for www.irctctourism.com for the year 2015 on 21.12.2015 by Metrixlab.

16.IRCTC  new Next Generation e-Ticketing System gets Gold in national award for e-governance 2015-16 in the category of Innovative Use of ICT by Central Government PSUs.

17.India Power Brand 2016 award in the category of Most Recognizable Brand of Indian Origin within its industry segment - March, 2016.

26.ESTABLISHMENT OF VIGIL MECHANISM

Disclosure regarding establishment of vigil mechanism is included under the Corporate Governance Report at Annexure-"B".

27.JOINT VENTURES/SUBSIDIARIES

The Company had formed a joint venture company with Cox & Kings Limited with 50:50 equity partnership in the name of Royale Indian Rail Tours Limited (RIRTL) by virtue of Joint venture Agreement dated 10th December, 2008.

The Company was incorporated to acquire, furnish, maintain, manage and operate luxury trains, and to market holiday packages with such luxury trains as an integral part. Accordingly, as per the Joint Venture agreement, a Luxury train of 23 coaches in the name of Maharajas Express was constructed, funded and created by IRCTC and was given to Royale Indian Rail Tours Limited (RIRTL) for operations and maintenance. However, due to the issues between the equity partners, IRCTC terminated the agreement with Cox and Kings Ltd on 12th August, 2011 and also withdrawn the train from RIRTL.

IRCTC had initiated proceedings under section 397 and 398 of the Companies Act, 1956 against Cox and Kings Ltd. and its officers, which is sub-judice. Details of the Joint Venture are covered in the Notes to Accounts of the financial statements for the periods ending 31st March 2016 vide Note No. 31.3, No. 38 and No. 39. RIRTL has also taken permission from the Company Law Board (CLB) for not holding the Board and General meetings without its approval in July, 2013.

28.CONSOLIDATION OF FINANCIAL STATEMENTS

As mentioned in the para above, the Board meetings and general meetings of the Company have not been held after the financial year 2010-2011, due to pending dispute with Cox & Kings Limited. Therefore, the consolidation of financial statements as required under section 129(3) of the Companies Act 2013 could not be done as also explained and disclosed vide Note No. 39 of the Notes to accounts of the financial statements for the period ending 31st March 2016.

29.AUDITORS

29.1Statutory Auditors

Under section 139(5) of the Companies Act 2013, Comptroller & Auditor General of India has appointed M/s Serva Associates, as Statutory Auditors of the Company to audit the financial statements for the financial year 2015-16. The Statutory auditor has been paid an audit fee of Rs. 7.08 lac plus applicable taxes and out of pocket expenses for the year 2015-16. The Statutory Auditor has audited the annual financial statements of the Company for the period ending 31st March, 2016.

29.2Cost Auditors

As the business segments of the Company are not covered under new Cost Audit Rules notified by Ministry of Corporate Affairs dated 30.06.2014 and 31.12.2014, the Company got conducted the cost audit of cost records maintained by the Rail Neer Plants of the company on voluntary basis only through M/s Sanjay Gupta & Associates as the Cost Auditor for the year 2015-16.

29.3Secretarial Auditor

Pursuant to section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, IRCTC has re-appointed M/s Akhil Rohtagi, Company Secretaries, an independent practicing firm of Company Secretaries to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed as Annexure- "E" to this Report.

29.4Internal Auditor

As per the section 138 of the Companies read with Rule 13 of Companies (Accounts) Rules 2014, the Company has appointed M/s Kumar Vijay Gupta & Co., Chartered Accountants, an independent Chartered Accountant firm to undertake the assignment of internal audit for FY 2015-16. The details regarding scope and functions of the firm is placed in the Management Discussion and Analysis Report at Annexure-"A".

30.COMMENTS OF COMPTROLLER & AUDITOR GENERAL (C&AG) OF INDIA

The Comptroller & Auditor General of India has undertaken supplementary audit on the financial statements of the Company for the year ended 31st March, 2016 under Section 143(6) of the Companies Act, 2013.

The comments of the C & AG on the Annual Financial Statements of the Company for the year ended 31st  March, 2016 shall also form part of this report.

31.DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company in pursuance of section 134 (5) of Companies Act 2013 confirms that:

(i)in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii)the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(iii)the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv)that the directors have prepared the annual accounts on a going concern basis; and

(v)that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

32.DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)

Chairman & Managing Director, Director (Finance), Director (Catering Services), Director (Tourism & Marketing) and Company Secretary are Key Managerial Personnel (KMPs) of the Company. The role of CEO is being performed by the Chairman & Management Director and the role of CFO is being performed by Director (Finance) of the Company.

The following changes have taken place in the Board of Directors and Key Managerial Personnel of your Company since the last Directors Report:

Appointment:

(i)Shri Ranjan Prakash Thakur (DIN 07309901), Executive Director (T&C), Railway Board has been appointed as part-time (official) Director on the Board of the Company w.e.f. 08th October, 2015.

(ii)Shri Sriram Venkatachalam (DIN 07445220), Regional Director, IRCTC/South Zone assumed the charge of Director (Catering Services) on the Board of the Company w.e.f 11th March, 2016.

(iii)Smt. Sunira Bassi (DIN 07554378), Advisor (T&C), Railway Board has been appointed as part-time (official) Director on the Board of the company w.e.f  27th June, 2016.

Cessation:

(i)Smt. Mani Anand (DIN 03085030), the then Executive Director (T&C), Railway Board ceased to be part-time (official) Director on the Board of the Company on 18th August, 2015 as communicated by Ministry of Railways.

(ii)Shri Rabindra Nath Kalita (DIN 00843481), ceased to be a Director (Catering Services) of the Company due to his superannuation on 29th February, 2016.

(iii)Shri Ranjan Prakash Thakur (DIN 07309901), the then Executive Director (T&C), Railway Board ceased to be a part-time (official) Director of the company w.e.f  15th June, 2016 as communicated by the Ministry of Railways.

The Board of Directors wishes to place on record their deep appreciation for the valuable services rendered as well as the advice and guidance provided by Smt. Mani Anand, Ex-ED (T&C), Railway Board, Sh. R. N. Kalita, Ex- Director (Catering Services) and Sh. Ranjan Prakash Thakur, Ex- ED (T&C), Railway Board during their tenure with the Company.

The following Directors are holding office as on the date of the report:-

33.ACKNOWLEDGEMENTS

The Board of Directors place on record their thanks for the guidance and cooperation extended to the Company by the Government of India, Ministry of Railways, Ministry of Tourism and Department of Public Enterprises. The Board of Directors is also extremely grateful to its valued customers and licensees.

The Board also acknowledges with thanks the constructive suggestions received from C&AG of India, Statutory Auditors, Internal Auditors, Secretarial Auditor and Cost Auditors.

Last but not the least, the Board wishes to place on record its sincere appreciation for the untiring efforts and contributions made by the employee at all levels, to ensure that the Company continues to grow and excel.

For and on behalf of Board of Directors

Place : New Delhi Date: 17th August, 2016

Sd/- (Dr. A. K. Manocha)

Chairman & Managing Director

DIN:06976502

REPORT ON CORPORATE GOVERNANCE

1.COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

IRCTC's Corporate Governance philosophy is To enhance stakeholders' value in the long run by ensuring fairness, transparency, disclosures and reporting that not only comply with statutory regulations but also promote ethical conduct throughout the organization, by adopting the following key values:

Zeal to excel and zest for change;

Integrity and fairness in all matters;

Respect for dignity and potential of individuals;

Strict adherence to commitments;

Ensure speed of response;

Foster learning, creativity and teamwork;

Loyalty and pride in IRCTC.

Besides adhering to the provisions of Companies Act, 2013, rules thereof and Secretarial Standards issued by ICSI, IRCTC also follows the Guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises (DPE), Government of India.

2.BOARD OF DIRECTORS

The Board serves as the ultimate decision making body of the company. It aims at enhancing the long term value for the stakeholders including the commitment to improve the community well being through Corporate Social Responsibility and Sustainability initiatives.

2.1Strength of the Board

IRCTC is Public Sector Undertaking under the administrative control of Ministry of Railways and a "Government Company" within the meaning of Section 2(45) of the Companies Act, 2013 as 100% of the total paid-up share capital of the Company is held by the President of India and its nominees (through Ministry of Railways).

As per the Articles of Association of the Company, the power to appoint Directors on the Board of the Company vests with President of India acting through Administrative Ministry. It further provides that the strength of the Board shall not be less than three (3) and not more than twelve (12) Directors.

2.2Composition of the Board

As on 31st March, 2016, the composition of Board of Directors stood as follows:

NOTES:

i.The term whole-time Director used in this report refers to Functional Directors.

ii.The term part-time Director used in this report refers to non-Executive Directors.

iii.The term official indicates part-time Government nominated Directors who hold office in the Government.

iv.Directors/KMPs do not have any pecuniary relationships or transactions with the Company;

v.None of the Director(s) on the Board is a member of more than 10 Committees or Chairman of more than 5 Committees across all the Companies in which he/she is a Director.

vi.The Directorships and memberships/chairmanships are based on the latest disclosures received from respective Directors.

During the financial year 2015-16, the part-time (non-official) Independent Directors Shri Sanjay Arora (DIN: 05337421), Shri Alok Shivapuri (DIN: 02238848) and Dr. Subhash Datta (DIN: 05352761) completed their three (3) years tenure on July 19, 2015.

In the absence of adequate number of Independent Directors on the Board of the Company, the composition of the Board of Directors is not in conformity with the provisions of Companies Act, 2013 and Clause 3.1.4 of Guidelines on Corporate Governance for CPSEs, 2010 issued by DPE. However, the compliance of these clauses would be done, once Independent Directors on the Board are appointed. The Company has also represented to Ministry of Railways to fill up the vacancies arisen due to completion of tenure of all Independent Directors on the Board of the Company.

2.3 Disclosures by Directors

As per the disclosures made by Directors under section 184 of Companies Act, 2013, they do not have any inter-se relationship amongst themselves. The Government Nominee Directors are officials of Ministry of Railways and thus related to the promoter. Since, the entire paid-up share capital of IRCTC is being held by the Central Government (Ministry of Railways), section 152 (6) of the Companies Act, 2013, which require not less than 2/3rd of the Directors as persons whose office is liable to determination by retirement of directors by rotation at a general meeting is exempted to the Company vide Notification no. GSR. 463(E) dated 05.06.2015 of Ministry of Corporate Affairs (MCA).

2.4 Brief resume of Directors appointed during/after the closure of financial year:

a.Shri  Ranjan  Prakash  Thakur,  Part-time  (official)  Director-DIN  07309901  from  08.10.2015  till 15.06.2016

Shri Ranjan Prakash Thakur, ED (Tourism & Catering) was inducted as Part-time (official) Director on the Board of IRCTC w.e.f. 8th October, 2015. He holds a degree in M.B.A from Indian Institute of Management, Indore. He has worked as Additional Director General, Doordarshan and has also held various prestigious posts including Executive Director (Statistics & Economics) for performance evaluation of freight and passenger operations of Indian Railways including compilation of all critical data related to Indian Railways. He has also worked with Ministry of Information and Broadcasting and Ministry of Tourism and Culture in prestigious capacities. In Indian Railways, he has held various significant posts, including, OSD to Member (Traffic), Ministry of Railways; Director, Passenger Marketing, Ministry of Railways for looking after the introduction of Tatkal Scheme, e-ticketing and many other activities and Divisional Traffic Manager, Shatabdi and Rajdhani.

Shri Ranjan P. Thakur ceased to be a Director on the Board of the Company as communicated by Ministry of Railways vide Order no. 2004/ PL/49/1 dated 15.06.2016.

b.Shri V. Sriram, Director (Catering Services)- DIN 07445220 from 11.03.2016

Shri V. Sriram assumed charge of Director (Catering Services) on 11th March, 2016. He is a former member of the Indian Railway Traffic Service. He has served for over two decades in Indian Railways, where, he has discharged various managerial responsibilities involving rail operations, safety, passenger business and general management. He was also a member of the roll out team of IR's passenger reservation system (PRS) in 1989 on Southern Railway and was instrumental in designing Indian Railways new look and user friendly time table (Trains at a Glance 2000) which evoked unparalleled positive customer response thereby setting the foundation for subsequent upgrades since then.

Shri V. Sriram was also a part of the startup team of IRCTC when it commenced business in 2001, as Group General Manager, South Zone. He has contributed immensely in the induction of reputed Food & Beverages players into IRCTC's Food Plaza business at stations in Kerala/Karnataka/Tamil Nadu, in addition to the design and implementation of yesteryears' flagship tourism products like Bharat Darshan and IRCTC's inbound tourism venture involving Sri Lankan foreign tourists to Buddhist destinations in India. He has also played a significant role towards design and implementation of a company-wide Personal Management System (PMS) for employees in 2011 as per the 2nd Pay Revision Committee (PRC) recommendations. He has attended various trainings, both in domestic and overseas institutions on varied subjects during his stint with IR and IRCTC.

c.Smt. Sunira Bassi, Part-time (official) Director DIN 07554378 from 27.06.2016 Smt. Sunira Bassi, Adviser (Tourism & Catering) was inducted as Part-time (official) Director on the Board of IRCTC w.e.f. 27th June, 2016. Smt Sunira Bassi is an IRTS officer belonging to 1981 exam batch of IRTS. She is presently posted as Adviser (Tourism and Catering) in the Ministry of Railways, Railway Board. She has completed M Phil (Physics) from Delhi University. Smt Bassi has more than 20 years experience in the IT sector in Railways. She has held charge of the post of Manager Systems on Northern Railway. She has also worked as Dy. Com. (Coaching) on Northern Railway. In this stint, her major contribution was in the development of Coaching Stock Monitoring System on NR. She has also worked as Joint Director (Computer Services) in the Railway Board. During her tenure as GM (CRIS)FOIS, at the Centre for Railway Information Systems, Pilot project for e-payment of freight charges of coal rakes booked for BTPP thermal power house was launched.

Smt. Bassi was selected as a member of the Long Range Decision Support System (LRDSS) team for development of LRDSS system in association with the World Bank. The system used simulation modeling (both micro modeling and network modeling) for assignment future 0-D wise traffic forecasts on IR network after incorporating the sanctioned infrastructure development projects (like new lines, doubling, changes in signaling, electrification etc.) to arrive at bottlenecks and constraints in the system. As ED/LRDSS, future 0-D wise traffic forecasts were developed for various years till 2020-21 and assigned on the envisaged IR network for that year ( both with & without DFC) for studying what if scenarios.

She has also worked briefly as Chief Project Manager- FOIS and Chief Traffic Planning Manager on Northern Railway. Prior to joining the Ministry of Railways as Adviser (T&C), she was posted as Chief Administrative Officer - PTS and was the nodal officer for Computerisation of Parcel Traffic on IR, involving - coordination with CRIS, Zonal Railways and Railway Board.

2.5 Age limit and tenure of Directors:

The age limit of the functional Directors, including Chairman & Managing Director is 60 years, who are appointed for a period of five years from the date of taking over of the charge or till the date of superannuation of the incumbent or till further orders from the Government of India, whichever event occurs earlier.

Government Nominee Directors representing Ministry of Railways, Government of India, cease to be Director from the Board of the Company at the discretion of nominating authority or on ceasing to be officials of the Ministry of Railways.

Independent Directors are appointed by the Ministry of Railways, Government of India usually for a tenure of three (3) years.

2.6 Details  of  Board  of  Directors  and  their  memberships/chairmanships  in  Committees  as  on 31st  March, 2016:

*Does not include Directorship in Private Companies, Section 8 Companies and Foreign Companies.

** For the purpose of reckoning the limit, Chairmanship/Membership of Audit Committee and Shareholders' Grievance Committee alone has been taken into consideration.

2.1    Details of Directors who ceased to be on the Board during/after the closure of the financial year 2015-16:

3.PROCEDURE ADOPTED FOR BOARD MEETINGS/ COMMITTEE MEETINGS

The meetings of the Board of Directors are generally held at the Company's Registered Office in New Delhi. In accordance with the provisions of section 173 of Companies Act, 2013, rules thereof and Secretarial Standards issued by ICSI, detailed agenda notes, along with other explanatory statements, are circulated generally atleast 7 days before the day of meeting among the members for focused discussion and effective decision-making during the meeting.

However, in case of urgent issues, meetings are sometimes called at shorter notice also with the consent of all Directors/ Members. Further, to address any exigency/ urgency, resolutions are passed by circulation also, which are noted at a subsequent meeting of the Board or Committee thereof. In special and exceptional circumstances or whenever it is not possible or wherever it is not practicable to attach document(s) to the agenda item, being confidential in nature, the same are tabled with the permission of Chairperson and all Directors present during the meeting. Minutes of the proceedings of each Board meeting and Committee are circulated amongst all members of the Board/Committee for their suggestions and comments, which are finally approved by the Chairman of the Board/Committee.

For follow up mechanism, an Action Taken Report on the decisions of the Board/Committee is placed in subsequent meetings of respective Board/Committee, which helps in effective review of decisions taken.

3.1 Information placed before the Board of Directors:

The Board has complete access to all information pertaining to the Company. The Board/Committee members are also free to recommend any issue which they may consider important for inclusion in the agenda. As and when necessary, senior management officials are also called during the meeting to provide additional inputs on the matters being discussed by the Board/Committee. The information usually provided to the Board for its consideration includes the following:

1. Annual operating plans and budgets and any updates.

2. Capital budgets and any updates.

3. Results for the company and its operating divisions or business segments.

4. Minutes of meetings of Audit Committee and other committees of the Board.

5. The information on recruitment and remuneration of senior officers just below the Board level including appointment or removal of Chief Financial Officer and the Company Secretary.

6.Major investments, formation of joint venture/subsidiaries.

7. Review of compliance of all the applicable laws to the Company on quarterly basis.

8.Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding another enterprise that can have negative implications on the company.

9.Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.

10. Any other information as required under the Companies Act, 2013 or prevalent rules or guidelines as issued by the DPE from time to time.

4.NUMBER OF BOARD MEETINGS

During the financial year 2015-16, 8 (Eight) meetings of the Board of Directors were held. The maximum time interval between two Board meetings was less than three months, as per the DPE's Guidelines on Corporate Governance. The details of Board Meetings held during 2015-16 are given below:

4.          ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS HELD DURING 2015-16 AND THE LAST AGM

   Meeting attended,  NA    - Not Applicable (not in position),                 *   - Leave of Absence,         #    - Attended AGM as Special Invitee 

6.COMMITTEES OF BOARD

To enable better and more focused attention on the affairs of the company, the Board has delegated certain matters to Committees of the Board set up for the purpose. The details of sub-committees of Board are mentioned below:

1.Audit Committee;

2.Nomination & Remuneration Committee;

3.CSR and SD Committee;

4.Risk Management Committee;

5.Investment Committee;

6.Executive Board Committee;

7.Administrative Committee;

During the year, the sub - committees of Board of Directors as mentioned above have been reconstituted from time to time due to changes in the composition of the Board of Directors because of completion of tenure of Independent Directors, cessation and appointment of functional Directors and part-time (official) Directors on the Board of the Company, as the case may be.

6.1 Audit Committee

a.Terms of reference:

The Terms of Reference of the Audit Committee, in brief, are mentioned below:

1.Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2.Recommending fixation of audit fees to the Board.

3.Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

4.Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to the requirements of Companies Act and DPE guidelines.

5.Reviewing, with the management, the financial statements before submission to the Board for approval.

6.Reviewing the adequacy of internal audit function, reporting structure coverage and frequency of internal audit.

7.Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

8.To review functioning of the Whistle Blower/vigil mechanism.

9.To review the follow-up action on audit observations of the Comptroller & Auditor General of India (C&AG) audit and on recommendations of the Parliament's Committee on Public Undertakings (COPU).

10.Approval or any subsequent modification of transactions of the company with related parties.

11.Review withtheIndependent Auditor  the  coordination  of  audit  efforts  to  assure  completeness  of coverage, reduction of redundant efforts, and the effective use of all audit resources.

12.Review and monitor the auditor's independence and performance, and effectiveness of audit process.

13.Scrutiny of inter-corporate loans and investments.

14.Valuation of undertakings or assets of the company, wherever it is necessary.

15.Evaluation of internal financial controls and risk management systems.

16.Any other function(s) as may be issued through Companies Act, 2013 and rules made there under and DPE Guidelines on Corporate Governance.

a.       Composition, Meetings and Attendance:

As on 31st March, 2016, the Audit Committee comprised of the following members:

Director (Finance) is the permanent invitee to the meetings of Audit Committee.

The meetings are also attended by GGM (Finance), Head of Internal Audit, representative of Statutory Auditors/Cost Auditors as special invitees, as and when required. Senior functional executives are also invited as and when required to provide necessary inputs to the Committee.

Mrs. Suman Kalra, Company Secretary is the Secretary to the Committee.

All the recommendations made by the Audit Committee during the year were accepted by the Board.

The Audit Committee met 4 (four) times during the financial year 2015-16 on 15th  June, 2015, 14th  July, 2015, 9th  November, 2015 and 7th March, 2016. As per Companies Act and DPE's GuidelinesonCorporateGovernance,  not  more  than  four  months/  120  days,  as  the  case  may  be,  was  elapsed  between  two consecutive meetings during the year.

The details of the meetings of Audit Committee held during the financial year 2015-16 and attendance by the members are as under:

6.2    Nomination and Remuneration Committee

a.       Terms of reference:

The Terms of Reference of the Nomination and Remuneration Committee, in brief, are mentioned below:

         To continue with the existing scope of deciding the annual bonus/variable pay pool and policy for its distribution across executives and non-unionized supervisors within the limits prescribed in the DPE OM dated 26tNovember, 2008, and as per the applicable recommendations of the Second Pay Revision Committee.

         To formulate and recommend HR policies relating to the perks/ allowances for senior management (one level below Board level) and other employees to Board of Directors.

         Any other work as may be included by Companies act or DPE guidelines from time to time.

b.      Composition, Meeting & Attendance:

As on 31st March, 2016, the Committee comprised of the following members:

Mrs. Suman Kalra, Company Secretary is the Secretary to the Committee.

Director (Finance) and GGM (HRD) are the permanent invitees to the meeting of the Nomination and Remuneration Committee.

The Nomination & Remuneration Committee met 2 (two) times during the financial year 2015-16 on 11th  May, 2015 and 29th March, 2016.

The details of the meetings of the committee held during the financial year 2015-16 and attendance by the members are as under:

Remuneration to Directors and Key Managerial Personnel of the Company:

IRCTC, being a Central Public Sector Undertaking, the appointment, tenure and remuneration of Functional Directors including Chairman & Managing Director are decided by the President of India as per the Articles of Association of the Company.

The details of remuneration paid to whole-time Directors and Company Secretary of the Company during the financial year 2015-16 are given below:

*No stock option has been made available or offered by the Company during the year 2015-16 as the entire paid-up share capital is held by the Govt. of India.

Remuneration to Government Nominee Directors:

The Government Nominee Directors are not entitled to any remuneration/ sitting fee from the company.

Remuneration of Independent Directors:

The part time (non-official) Independent Directors are not paid any remuneration except sitting fees of Rs. 15,000/- for attending each meeting of the Board or Committee thereof as fixed by Board which is within the limits prescribed under the Companies Act, 2013 and rules thereunder. The details of sitting fee paid to Independent directors during the year 2015-16 are given below:

6.3    CSR and SD Committee

a.       Terms of Reference:

As per the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder and Guidelines on Corporate Social Responsibility and Sustainability for CPSEs, issued by DPE, the Terms of Reference of the CSR & SD Committee, in brief, are as under:

a.       to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013;

b.      to monitor the Corporate Social Responsibility Policy of the Company from time to time;

c.       to recommend the amount of expenditure to be incurred on the activities referred to in clause (a);

d.      to recommend/review CSR projects / programmes / proposals, falling within the purview of Schedule VII of the Companies Act, 2013;

e.       to assist the Board of Directors to formulate strategies on CSR initiatives of the Company;

b.      Composition, Meeting & Attendance:

As on 31st March, 2016, the Committee comprised of the following members:

Mrs. Suman Kalra, Company Secretary is the Secretary to the Committee.

GGM (Services), being the nodal officer of the CSR & SD Committee till 14.06.2016 was permanent invitee to the meetings. However, w.e.f 15.06.2016 GGM (Infra) has been nominated as new nodal officer of the CSR & SD committee and is therefore now permanent invitee to the meetings of the Committee.  The Committee met 4 (four) times during the year 2015-16 on 11th  May, 2015,  15th December, 2015, 26th  February, 2016 and 29th  March, 2016. The details of the meetings of the Committee held and attendance by the members are as under:

6.4    Shareholding Pattern/Stakeholders Relationship Committee/Shareholders'  Grievance Committee: IRCTC is not listed on any Stock Exchange in India or abroad. Since the Company does not have more than one thousand Shareholders and also the entire equity share capital of the company is held by the President

of India through Ministry of Railways and its nominees, the Company has not constituted a Stakeholders

Relationship Committee/Shareholders Grievance Committee as required to be constituted under Section 178(5) of the Companies Act, 2013.

6.5    Risk Management Committee:

a.       Terms of Reference:

The Risk Management Committee of IRCTC has been constituted with a view to establish a framework for the company's risk management process and to provide assistance to the Board in Corporate Governance by overseeing the responsibilities relating to the identification, evaluation and mitigation of operational, strategic and external environment risks. Other functions as required under Companies Act, 2013 and Corporate Governance Guidelines issued by DPE are also carried out accordingly.

b.      Composition, Meeting & Attendance:

As on 31st March, 2016, the Committee comprised of the following members:

No meeting of the Risk Management Committee was held during the financial year 2015-16.

Other Functional Committees:

6.6    Investment Committee

In accordance with DPE guidelines, the Investment Committee of IRCTC has been constituted to take investment decisions for short-term deployment of surplus funds as per financial delegation(s) of power for this purpose. The decisions taken by the Committee are put up to the Board of Directors for information.

The Committee consists of Chairman & Managing Director, Director (Finance) and Director (Catering Services). The meetings of the committee are held as and when required, and are attended by all the members.

6.7    Executive Board Committee

The Committee of Executive Board has been constituted to prepare and draft the policy(ies) of recruitment, absorption and channels of promotion in IRCTC for employees of E-6 and below and other issues including new ventures, growth of business segments, operational performance of the Company for the purpose of internal analysis etc.

The Committee consists of Chairman & Managing Director, Director (Finance), Director (Tourism & Marketing) and Director (Catering Services).

The Executive Board met 6 (six) times during the financial year 2015-16 on 19th May, 2015, 4th June, 2015, 24th June, 2015, 12th October, 2015, 17th November, 2015 and 17th February, 2016. The meetings were attended by all the members of the Committee.

Mrs. Suman Kalra, Company Secretary is the Secretary to the Committee.

Senior functional executives are also invited to attend the meetings of the Executive Board, as and when required.

6.8     Administrative Committee

Administrative Committee has been constituted to deal with the matters relating to approvals for opening and closing of Bank Accounts both current or FDR and approaching the financial institutions for seeking working capital facilities for the Rail Neer Project and matters including authorizing the officials for registration with Excise, Income tax and other applicable authorities and signing and executing documents on behalf of the company.

 The Committee comprise of Chairman & Managing Director, Director (Finance), Director (Tourism & Marketing) and Director (Catering Services).

During the financial year 2015-16, one meeting of Administrative Committee was held on 22nd January, 2016 and all members of the Committee attended the meeting.

6.9    Share Transfer Committee

The Board of Directors authorized Company Secretary as one member committee for and on behalf of the Board in its 72nd Meeting held on 12th May, 2015 to execute the transfer of shares as and when the request(s) for the same is received from Ministry of Railways. The same is placed before the Board for information. On the basis of the advice received from Ministry of Railways, share transfers were executed twice during the year 2015-16 i.e. on 29th February, 2016 and 31st March, 2016.

7.       SEPARATE MEETING OF INDEPENDENT DIRECTORS

Pursuant to the requirements of Schedule IV of Companies Act, 2013 and in accordance with Department of Public Enterprises (DPE)'s Office Memorandum No. F. No. 16 (4)/2012-GM dated 20th June 2013, during the year 2015-16, one separate meeting of Independent Directors without the presence of Functional Directors, Government Nominee Directors and Management Personnel of IRCTC was held on 15th July, 2015, wherein independent Directors discussed various issues related to investment plans/ proposals which need to be studied in depth and the co-ordination between the Railway Board and IRCTC. The meeting was attended by all Independent Directors of the company.

The Independent Directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 for the financial year 2015-16 and the same was placed in the first meeting of the Board of Directors for the financial year 2015-16 which was duly noted and recorded.

8.       GENERAL BODY MEETINGS

Details of last three Annual General Meetings (AGM) of the company are as under:

9.       DISCLOSURES

(i)       The Company has complied with all the requirements of the Companies Act, 2013, Secretarial Standards issued by ICSI and DPE Guidelines on Corporate Governance for CPSEs issued by DPE, except relating to composition of Board and constitution of its committees.

(ii)      The Company has not entered into any material, financial and commercial transactions, with the Directors or the Management or their relatives or the companies and the firms, etc. in which they are either directly or through their relatives interested as Directors and/or partners.

(iii)     No item of expenditure has been debited in books of accounts, which are not for the purposes of the business and no expenses, which are personal in nature, have been incurred for the Board of Directors and top Management.

(iv)    The company has systems in place for monitoring statutory and procedural compliances. The Board is reported the status of the same so as to ensure proper compliances of all laws applicable to the company.

(v)     The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of financial statements, the Company has not adopted a treatment different from that prescribed in any accounting standard except as specified in notes to accounts.

(vi)    During the last three years, there has been no instance of penalty imposed on the Company by any statutory authority owing to non-compliance under applicable laws.

(vii)   The Company periodically informs the Board about the risks associated with its projects in risky areas. Details pertaining to risk management have been given in Management Discussion and Analysis Report under the heading 'Risks and Concerns'.

(viii)  Vigil mechanism: Pursuant to Section 177 of the Companies Act, 2013, the Company affirms that a vigil mechanism is in place for all its employees and clients to report about any illegal or unethical behaviour, actual or suspected fraud to the CVO or the Chairman & Managing Director directly through IRCTC's Whistle Blower Policy. It also promotes ethical behaviour in all its business activities. The Company further affirms and no personnel has been denied access to the Audit Committee. The Whistleblower policy is available on the website of the Company www.irctc.com.

(ix)    Details of administrative and office expenses as a percentage of total expenses vis-?is financial expenses The administrative expenses and office expenses were at 7.69% of total expenses in the year 2015-16.

10.       MEANS OF COMMUNICATION

The Audited Annual Financial Results, Annual Reports, Corporate Governance Manual and Board Charter, Performance MOU between IR and IRCTC, Code of Business Conduct and Ethics, CSR & Sustainability Policy, Risk Management Policy, Fraud Detection and Prevention Policy etc. are uploaded on IRCTC's official website i.e. www.irctc.com for the purpose of communication and can be downloaded from the website. Tenders of various departments, details of tenders/contracts awarded alongwith other official news releases are also uploaded on the website of IRCTC. In line with the role as leading service provider like Rail Tourism, Catering services, Rail ticketing services etc, IRCTC took several steps to improve Corporate Communication.

11.       TRAINING OF BOARD MEMBERS

IRCTC, as per the principles of Corporate Governance, takes initiatives from time to time to train its Board members about IRCTC's business model, risk profile in the  most appropriate ways in which  they can discharge their roles and responsibilities. As a practice, on the joining of a new Director on the Board, formal induction and orientation with respect to the Company's vision, mission, strategic direction, core values, financial matters & business operations is given through necessary documents/brochures,  reports  and internal policies including Annual reports, Memorandum and Articles of Association, MOUs between IRCTC and Ministry of Railways which help them to familiarize with Company's procedures, practices and risk profile.

12.    POLICY ON PERFORMANCE EVALUATION OF DIRECTORS

Since, IRCTC is a Government Company, the evaluation of its functional Directors takes place through the annual performance MOU entered with Ministry of Railways and submitted to Department of Public Enterprises by Ministry of Railways, Government of India. Hence, the company has not framed any policy on Performance Evaluation of Board of Directors. The same also has been exempted by MCA vide its notification dated June 05, 2015.

13.    AUDIT QUALIFICATIONS

The Company has been putting all the efforts to ensure a regime of unqualified financial statements and it has been successful in attaining the unqualified report from the Statutory Auditor.

14.    GENERAL INFORMATION FOR SHAREHOLDERS

a.       Annual General Meeting of the Current Year

Date: 27th September 2016 Time: 1200 Hours

Venue: Conference Hall, 2nd  Floor, Rail Bhawan, New Delhi-110001

b.      Percentage of shareholding:

c.       Plant Locations/ Operating Units

A list of Railneer plants and zonal offices in different States is available on the website of the Company.

d.      Address  for  correspondence  with  the  Registered  Office  (Regarding  Corporate  Governance matters covered under this report)

Company Secretary, IRCTC,

11th Floor, B-148, Statesman House, Barakhamba Road, New Delhi110001

Telephone: 91-11-23327746, E-Mail: companysecretary@irctc.com, Website: www.irctc.com

15.    CEO/CFO CERTIFICATION

Chairman & Managing Director and Director (Finance) has certified the specified matters to the Board and Audit committee as required under the Guidelines issued by DPE on Corporate Governance. In terms of said guidelines, a certificate duly signed by Dr. A.K. Manocha, Chairman & Managing Director and Mr. M.P. Mall, Director (Finance) was placed before the Audit Committee in its 40th meeting held on 17.08.2016 and then Board of Directors in its 81st meeting held on same day. The duly signed certificate as presented to the Audit Committee and Board of Directors is placed as Annexure "B-1".

16.    DECLARATION BY CHAIRMAN & MANAGING DIRECTOR REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY BOARD MEMBERS AND SENIOR MANAGEMENT DURING THE FINANCIAL YEAR 2015-16

I, A. K. Mancoha, Chairman & Managing Director, Indian Railway Catering and Tourism Corporation Limited, do hereby declare that all the members of the Board of Directors and the Senior Management Team of the Company have affirmed their compliance of the Code of Conduct and Key Values of the Company during 2015-16.

 Place : New Delhi Date: 17h August, 2016

Sd/- (Dr. A. K. Manocha)

Chairman & Managing Director

DIN:06976502

17.    RATING ON CORPORATE GOVERNANCE BY DEPARTMENT OF PUBLIC ENTERPRISES

Your Company has filed report on Corporate Governance in specified format(s) to Ministry of Railways and DPE within the stipulated time provided for the same as required under the Department of Public Enterprises (DPE) Guidelines on the Corporate Governance, 2010 for CPSEs.

Department of Public Enterprises has rated IRCTC as Excellent under the category of Corporate Governance during 2014-15. On the basis of self evaluation, the Company expects to achieve an Excellent rating for the year 2015-16 also.

18.    COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

As required under the Guidelines on Corporate Governance issued by Department of Public Enterprises, certificate regarding compliance of conditions of Corporate Governance by the Company issued by M/s Balika Sharma and Associates, Practicing Company Secretaries is annexed to this Report as Annexure B-2.

19.    SECRETARIALAUDIT

In terms of the provision of section 204 of the Companies Act, 2013 read with Companies (Appintment and Remuneration of Managerial Personnel) Rules, 2014, the Board has re-appointed M/s Akhil Rohtagi & Company, an independent practicing firm of Company Secretaries to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed as Annexure-E to this Report.

 Place : New Delhi Date: 17h August, 2016

For and on behalf of Board of Directors

Sd/- (Dr. A. K. Manocha)

Chairman & Managing Director

DIN:06976502

Annexure B-1

CEO AND CFO CERTIFICATION

Indian Railway Catering and Tourism Corporation Limited New Delhi

i.        We have reviewed financial statements and the cash flow statement of Indian Railway Catering and Tourism Corporation Ltd for the year ended 31st March, 2016 and that to the best of our knowledge and belief:

a.       These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

b.      These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

ii.       There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year 2015-16 which are fraudulent, illegal or violative of the Company's Code of Conduct.

iii.      We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

iv.      We have indicated to the auditors and the Audit Committee:

a.       There have been no significant changes in internal control over financial reporting during the year 2015-16.

b.       There have been no significant changes in accounting policies during the year 2015-16.

c.       There have been no instances of significant fraud of which we are not aware nor there has been involvement of management or an employee having significant role in the Company's under internal control system over financial reporting.

Sd/-                                                                                                               Sd/-

(.P. Mall)                                                                                              (Dr. A. K. Manocha)

Director (Finance)                                                                              Chairman and Managing Director DIN: 02316235                                                                                                        DIN:06976502

 Place: New Delhi

Dated: 17th August2016

 Annexure B-2

Balika Sharma & Associates (Company Secretaries)

Address : Flat No. 211, PocketA/3, Sector-7, Rohini, New Delhi,

Pin Code -110085

Phone :011-27931217

Mobile: 9811387946

E mail : balikasharma@gmail.com

 COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

To

The Members,

Indian Railway Catering and Tourism Corporation Limited

11th Floor, B-148, Statesman House, Barakhamba Road, New Delhi-11001 CIN U74899DL1999GOI101707

We have examined the compliance of conditions of Corporate Governance by Indian Railway Catering and Tourism Corporation Limited, for the Financial Year ended on 31st March, 2016 as stipulated in Guidelines on Corporate Governance for Central Public Sector Enterprises issued by Department of Public Enterprise (DPE),Government of India.

The Compliance of conditions of Corporate Governance is the responsibility of management. Our examination was limited to procedures and implementation thereof, adopted by the Company to ensure the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Guidelines. However, during the Financial Year 2015-16, in the absence of requisite number of Independent Directors on the Board of Company, the composition of all applicable Statutory Board level committees is not as per the requirement of the provisions of Companies Act, 2013 & Guidelines on Corporate Governance for CPSE, 2010 issued by DPE.

We further state that such compliance is neither an assurance as to the viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company

FOR BALIKA SHARMA & ASSOCIATES

Practicing Company Secretaries

 Place : New Delhi Date: 02nd August, 2016

Sd/-

Balika Sharma & Associates (Company Secretaries)

CP.No. 3222

M.No. 4816 ST No. : AMAPS 9564 KST 001

Annexure A to the Directors Report

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1)       INDUSTRY STRUCTURE AND DEVELOPMENT

        ECONOMIC SCENARIO

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). According to the Economic Survey 2015-16, the Indian economy is expected to grow at more than 7 per cent in 2016-17, followed by further acceleration to 7.9 per cent in 2017-18.

The service sector in India has remained the most vibrant sector in terms of contribution to national and state incomes, trade flows, FDI inflows, and employment. India's services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. According to the Economic Survey 2015-16, the services sector contributed almost 66.1% of its gross value added growth in 2015-16 becoming the important net foreign exchange earner and the most attractive sector for FDI (Foreign Direct Investment) inflows. Despite the slowdown in the post crisis period (2010-14) India showed the fastest service sector growth with a CAGR (Compound Annual Growth Rate) of 8.6% followed by China at 8.4%. Foreign Direct Investment (FDI) in India have increased by 29 per cent during October 2014- December 2015 period post the launch of Make in India campaign, compared to the 15-month period before the launch.

The steps taken by the government in recent times have shown positive results as India's gross domestic product (GDP) at factor cost at constant (2011-12) prices 2015-16 is Rs.113.5 trillion (US$ 1.668 trillion), as against Rs.105.5 trillion (US$ 1.55 trillion) in 2014-15, registering a growth rate of 7.6 per cent. The economic activities which witnessed significant growth were financing, insurance, real estate and business services at 11.5 per cent and trade, hotels, transport, communication services at 10.7 per cent.

            CATERING INDUSTRY OVERVIEW:

In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry. It is expected to touch US$ 482 billion by 2020.

The food industry, which is currently valued at US$ 39.71 billion, is expected to grow at a Compounded Annual Growth Rate (CAGR) of 11 per cent to US$65.4 billion by 2018. Food and grocery account for around 31 per cent of India's consumption basket.

Catering services business is a rewarding option with huge potential of growth. Considering the importance of social celebrations and events, corporate cultures and social lifestyle, the catering industry is expected to expand its status and profitable nature further. The restaurant industry came up with good figures even when other industries were struggling during the period of recession. The consumers in the India middle & upper class spend about 30 percent of their total food budget in the restaurants. This clearly indicates how the establishments like restaurants, cafes and other types of eateries are growing their profits year after year.

India is a country where numerous festivals and ceremonies are held in the form of important events. So, the scope of the catering industry in such a country is worth taking a note. The members of the Indian families usually took care of different arrangements during a social gathering or an event. This trend is fast being replaced by the people's interest in hiring catering services. Apart from the social gatherings and festive occasions, the formal events, seminars, conferences and other business related events consider professional catering services to add to the success of these events.

HOSPITALITY INDUSTRY OVERVIEW:

The history of the hotel industry is as old as the history of tourism and travel industry. Both are complementary to each other. Hotel is a commercial establishment and intends to provide visitors with lodging, food and related services with a view to please them so as to build goodwill and to let them carry happy memories.

Indian hospitality industry is considered a major attraction for FDI. The sector of India is growing at an extremely fast pace and clocking CAGR of 14 %. The existing gap between demand and supply of hospitality services is expected to widen further as the Indian economy grows. The Indian government estimates the requirement of more than 2,00,000 rooms by the end of this year. The foreign investors are tapping this opportunity in a big way, According to DIPP, the amount of FDI inflow in the industry during the last couple of years was more than US$ 6 Billion.

In the Indian hospitality industry, the major players are Indian Hotels, EIH, ITC Hotels, Hotel Leela Ventures, Bharat Hotels and Asian Hotels, ITDC and Orient Hotels Ltd. The booming industry has attracted many international players as well. A number of global players are already well established in India. These include Hilton, Shangri-La, Radisson, Mariott, Meridian, Sheraton, Hyatt, Holiday Inn, InterContinental and Crown Plaza.

Market Size

Indian hospitality sector is the 2nd largest employer in the country.

E-visa facility offered to 113 countries by the Govt. of India & this will further expand to 150 countries.

Over 7.757 million foreign tourist arrivals were reported in 2015.

Achievements

India has been the most attractive destination for global hospitality industry players.

Strong Govt. promotion through Incredible India & Athithi Devo Bhava (Visitors are like God) campaigns.

Rapid growth in the industry has created a huge demand for world class ingredient & equipment suppliers.

Road Ahead

Online hotel bookings in India are expected to double by 2016 due to the increasing penetration of the internet and smart phones.

` 5 Billion budget for creation of 5 tourist circuits around specific themes.

ICRA estimates a revenue growth of 9-11% in current financial year.

As per World Tourism Organization, 15.3 million foreign tourist arrivals are expected to arrive in India by 2025.

Many domestic & International hotel chains have ambitious expansion plans.

            TOURISM INDUSTRY OVERVIEW:

The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Today tourism is the largest service industry in India, with a contribution of 6.23% to the national GDP and providing 8.78% of the total employment. India witness more than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate.

Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country. The industry is expected to generate 13.45 million jobs across sub-segments such as Restaurants (10.49 million jobs), Hotels (2.3 million jobs) and Travel Agents/Tour Operators (0.66 million). The Ministry of Tourism plans to help the industry meet the increasing demand of skilled and trained manpower by providing hospitality education to students as well as certifying and upgrading skills of existing service providers.

Despite the economic slowdown, medical tourism in India is the fastest growing segment of tourism industry, according to the market research report Booming Medical Tourism in India. The report adds that India offers a great potential in the medical tourism industry. Factors such as low cost, scale and range of treatments provided in the country add to its attractiveness as a medical tourism destination.

The tourism and hospitality sector is among the top 15 sectors in India to attract the highest Foreign Direct Investment (FDI). During the period April 2000-September 2015, the hotel and tourism sector attracted around US$ 8.48 billion of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP).

Market Size

Tourism accounts for 6.8% of GDP & the 3rd largest foreign exchange earner.

The number of Foreign Tourist Arrivals (FTAs) has grown steadily in the last three years reaching around

7.103 million during JanuaryNovember 2015 (4.5 per cent growth).

The number of FTAs in November 2015 was 8,15,000, registering an increase of 6.5 per cent over November 2014.

Foreign Exchange Earnings (FEEs) from tourism during January-November 2015 were Rs. 1,12,958 crore (US$ 16.94 billion), registering a growth of 1 per cent over same period last year.

The number of tourists arriving on e-Tourist Visa during the month of October 2015 reached a total of 56,477 registering a growth of 1987.9 per cent or 21 times as compared to 2,705 tourists in October 2014.

Achievements

India has been ranked the "best country brand for value-for-money" in the Country Brand Index (CBI) survey conducted by Future Brand, a leading global brand consultancy.

India also claimed the second place in CBI's "best country brand for history".

India appears among the top 5 in the best country brand for authenticity and art & culture and fourth best new country for Business.

India has moved up 13 positions to 52nd rank from 65th in Tourism & Travel competitive index. Government Initiatives

The Indian government has realized the country's potential in the tourism industry and has taken several steps to make India a global tourism hub. Some of the major initiatives taken by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:

The Indian government has released a fresh category of visa - the medical visa or M visa, to encourage medical tourism in the country. In November 2014, Government of India launched Tourist Visa on Arrival (TVoA) which is enabled by Electronic Travel Authorization (ETA), known as the eTourist Visa scheme for 43 countries.

The Government of India has launched the Incredible India mobile application. This app demonstrates the Ministry of Tourism's commitment to the use of technology for service delivery. The Ministry of Tourism is the nodal agency for the development and promotion of tourism in India and maintains the "Incredible India" campaign.

Ministry of Tourism has sanctioned Rs. 844.96 crore (US$ 142 million) to States and Union Territories for developing tourism destinations and circuits during FY 2014-15, which includes projects relating to Product/Infrastructure Development for Destinations and Circuits (PIDDC), Human Resource Development (HRD), Fairs and Festivals & Rural Tourism.

Government of India plans to cover 150 countries under e-visa scheme by the end of the year besides opening an airport in the NCR region in order to ease the pressure on Delhi airport.

Road Ahead

Expected share of tourists by expenditure Domestic travellers are expected to contribute around 84.7 per cent to total tourism revenues by 2024.

The demand for travel and tourism in India is expected to grow by 8.2 per cent between 2010 and 2019 and will place India at the third position in the world.

India's travel and tourism sector is expected to be the second largest employer in the world, employing 40,037,000 by 2019.

Capital investment in India's travel and tourism sector is expected to grow at 8.8 per cent between 2010 and 2019.

E-COMMERCE INDUSTRY OVERVIEW:

India has seen a dramatic shift towards acceptance and rise of the e-commerce industry in India over the past few years. The key growth drivers are greater internet penetration, a rise in number of online shoppers and an increase in per capita income. It has been witnessed by the fact that IRCTC is now the largest website in the Asia-Pacific region with a transaction volume of 15-18 million per month and 12 million visitors a month.

As per Google and AT Kearney said in a report titled Digital Retail 2020, with a strong consumer base of around 175 million, Indian e-commerce could reach $60 billion in gross merchandise value (GMV) by 2020. E- commerce sales in India are expected to grow from $14 billion in 2015 to $55 billion in 2018, says a report by marketing research firm e-Marketer. India has seen the fastest growth in the retail e-commerce section among the Asia-Pacific countries, growing 133.8% in 2014 and 129.5% in 2015. E-Marketer also forecasts that this growth will stabilize to 23.9% in 2019, compared with an Asia-Pacific projected average growth of 23.5%. With an established base in the area of technology, both in domestic and international markets, India is well poised to take rapid strides in this emerging sector that offers a lot of growth potential in coming years.

            BOTTLED WATER INDUSTRY OVERVIEW:

With a rise in health awareness, increase in tourism and the easy availability of bottled water, the per capita consumption of bottled water in India is on the increase. The total market was valued at Rs. 60 billion in 2013, of which the top five players accounted for 67 per cent of the market share. This market is expected to grow at a CAGR of 22 percent to reach Rs. 160 billion in 2018. Packaged Drinking Water which holds about 85% of the market, is also witnessing strong growth due to other factors, including changes in the lifestyle and an increase in the foreign tourist arrivals. With the aim to capture all the segments of society, players have started foraying into packaged water pouches at low price points, but this is still in the experimental stage.

2)       SWOT ANALYSIS

Strength(s)

Pan India presence

Only PSU Company, providing one window solution to all Hospitality Services.

Support of Indian Railways Professional employee base Largest e-commerce provider in Asia Pacific

Reputed brand name Database of over 21 million customers

Large agent network

Opportunities

High growth rate in Hospitality & Tourism segment

Growth in online business IT and E-Governance Reputation of Brand IRCTC Joint Venture with other Government bodies

No other reputed/global player in railway catering

SWOT

Weaknesses

High dependency on Railways.

Profitability dependent on one segment.

Low flexibility in decision making as compared to private sector

Threats

Policy directives issued from time to time on catering & internet ticketing.

Dominant unorganized sector High market competition

3)       OUTLOOK

IRCTC, as one of the only Catering and Hospitality Company in Public Sector in the Country, has been playing a pivotal role in the field of Catering & Hospitality, Travel & Tourism, Internet Ticketing and Packaged Drinking Water (Rail Neer) by providing value added products and integrated services under single roof to passengers, tourists and other customers with high level of satisfaction.

For the year 2016-17, in view of catering being given back to IRCTC, as per Rail Budget Announcement 2016- 17, internal processes have been started for preparation of takeover of catering from Railways, including staff management, preparation of tender documents, unbundling of products and services, networking of Base Kitchens and finalization of load sizing of trains. In addition to 3 existing Executive lounges at New Delhi, Jaipur and Agra Cantt railway stations, Company is planning to set up more Executive lounges at identified Railway Stations in the forthcoming years. Other ongoing projects like E-catering are also making a steady growth.

The Company is focused to further enhance tourism business in the coming years by expanding existing business lines as well as introducing new products viz, International and Domestic Air packages, Helicopter Air services, Gatiman type Rail Tour packages, Pick up and Drop (Concierge) services, Cab services, Medical Tourism and Inbound as well as Outbound travel services for individual travellers.

Also, the company has been continuously working in the field of Internet Ticketing in order to provide improved booking services to customers by improving the software, launching of mobile app for easy access to the IRCTC ticketing portal and booking through mobile e-wallets.

The business of Water Vending Machines as a complementary offering to packaged drinking water has been initiated by the Company already.

4)       RISKS AND CONCERNS

        Catering:

Catering business of the Company continues to be heavily dependent of Railways.

Though Company diversified into non Railway Catering business from the year 2010-11 and continued to achieve higher turnover with higher number of units, but the losses in non-railway segment were increasing and therefore, now it has been decided to curtail the operation of this segment. Loss making non-railway catering units are being closed and in future units with higher turnover and profitability will be taken up.

IRCTC has formally communicated Ministry of Railways its view on the proposed transfer of Railway Catering services in phased manner and has also proposed a business model, which may be followed for managing mobile units through unbundling of services. The idea is to encourage private participation for capacity enhancement on Indian Railways and open up the Railway catering sector for private investment.

The departmental operation of catering activity has been a loss making proposition since time past though efforts to cut down the losses was made. Due to high manpower cost and absence of linkage between inflation and price revision, the losses could not be wiped out. The process of entering a revised protocol of understanding between Ministry of Railways and IRCTC is underway through the most likely arrangement of catering services back to IRCTC.

Internet Ticketing:

Internet Ticketing services for Indian Railways are the main source of profits for the company especially after taking back of the licensee catering business by Indian Railways. The Company gets nominal Service Charge of Rs. 20/- per ticket for non AC classes and Rs. 40/- per ticket for AC classes with Service Tax. The service charge revenue is shared in the ratio of 50:50 with Indian Railways. This is reducing the revenues from Internet Ticketing by 50% directly. It may change in future and will depend upon the policy from Ministry of Railways.

The Ministry of Finance, Government of India has recently issued an office memo containing guidelines for 'Promotion of Payments through Cards and Digital Means' in order to provide the necessary incentives to use digital financial transactions to replace the use of cash over a period of time through policy intervention.

As per this policy, it is mandated that they, in view of the guidelines aforesaid, withdraw convenience fee/service charge/surcharge on customers who prefer to make card/ digital payments for essential commodities, utility service providers, petrol pumps, gas agencies, railway tickets/ IRCTC, tax departments, museums, monuments etc.

The service charge levied on the ticket amount is not a payment that is in any manner connected with the card payment, but it is a service charge for the services provided by IRCTC to be borne by the customers purchasing the ticket. This service charge has also been pursuant to the approval by the Railway Board from the very beginning. IRCTC has to levy this service charge because of the infrastructure that it maintains, including the expense towards software (its upgradation and maintenance) and the facility that it provides. This is costing IRCTC more than ` 180 crores.

The issue has arisen as to whether the guidelines also mandates that the service charge which is being charged by IRCTC for ticketing through its portal, (which charge is not connected with the fact that the customer is making card/digital payment) is also required to be withdrawn.

            Tourism:

Tourism Industry is highly competitive at Domestic as well as International level. Economic downturn and political events in India as well as in the world can affect tourism in India. Natural Calamities, Policies and Charges applied by Railways for Tourism Packages and Trains are also the factors which affect this segment of the Company.

Quality of Service rendered by Service providers, unethical practice followed in Tourism Industry, proper marketing and promotion of Tourism Products by IRCTC and less flexibility compared to private players are also the areas for concern of management of the Company that needed to be taken care of while implementing any policy, procedures and strategy for this segment of the Company.

            Rail Neer:

There is an intense competition from private players in Packaged Drinking Water segment, since the market is quite unorganized and evasion of taxes is a recurring practice, which brings down the cost of production and makes available the supply of product at cheaper rates.

Main raw material for Rail Neer is water, which is a very important natural resource. With increase in population, there will be more pressure on this natural resource. Therefore, water conservation and specific water consumption (amount of water used to produce one litre of finished water) has to be constantly monitored.

5)       INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains an adequate system of Internal Control in all the functional and operational areas including various policies and procedures which ensures the orderly and efficient conduct of its business, including adherence to management's policies, safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Internal Audit is conducted by the experienced firms of Chartered Accountants in close co- ordination with concerned officials of the Company.

During the year, Internal Audit was conducted by M/s Kumar Vijay Gupta & Co., Chartered Accountants who have been appointed as Internal Auditor by the Board of Directors of the Company, in accordance with the provisions of Section 179 of Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014.

Internal Audit covers all the major areas of operations of the Company as per the Annual Internal Audit Programme. Internal Audit helps in improving accuracy and efficiency of transactions and operations by undertaking review of controls in built, scrutiny of payments and expenditure and examination of financial and technical records of the Company. A summary of audit observations and action taken reports are being submitted before the Audit Committee of Board of Directors and the recommendations of the Audit Committee are duly complied with.

6)       INTEGRITY PACT

IRCTC has implemented the integrity pact program in line with the recommendations of Central Vigilance Commission with an objective to ensure that all activities and transactions between a Company or Government departments and their Suppliers are handled in a fair, transparent and corruption free manner. The adoption of Integrity Pact by IRCTC has helped in establishing healthy business practices. To ensure transparency and healthy competitiveness in public procurements/ contracts, IRCTC has adopted Integrity Pact. Two Independent External monitors have also been appointed in IRCTC with the approval of CVC. A coordinator has also been appointed for Integrity Pact which is now being used in all the tenders which are beyond the identified threshold values

7)       FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company continued to accomplish a healthy growth during the year. The total Revenue increased by 31.94% from Rs. 1141.21 crore to Rs.1505.74 crore. Profit before tax grew by 44.21% from Rs. 214.03 crore to Rs. 308.66 crore in financial year 2015-16. The Profit after tax grew by 44.40% from Rs. 130.63 crore to Rs.188.63 crore in financial year 2015-16. The comparative performance of major financial parameters during the financial years 2015-16 and 2014-15 is given below:

(Rs. in Crores)

ANALYSIS OF THE FINANCIAL PERFORMANCE OF THE COMPANY

A detailed analysis of the Audited Financial Results of the Company for the FY 2015-16 vis-?is FY 2014-15 is as under:-

(a)     REVENUE FROM OPERATIONS                                                                                    (Rs. in Lakh)

(b)     OTHER INCOME                                                                                        (Rs. in Lakh)

(c)     EXPENSES                                                                                                                     (Rs. in Lakh)

(d)     NON CURRENT/CURRENT ASSETS                                                                                (Rs. in Lakh)

(e)     NON CURRENT/CURRENT LIABILITIES                                                                     (Rs. in Lakh)

(f)      CASH FLOW                                                                                                                  (Rs. in Lakh)

(g)     MOU FOR THE YEAR 2015-16 WITH MINISTRY OF RAILWAYS

8)       SEGMENT-WISE PERFORMANCE

IRCTC has main four business segments namely; Catering and Hospitality (including Licensee Catering, Departmental Catering); Travel & Tourism; Internet Ticketing and Packaged drinking water Railneer. Performances of these segments during the year as compared to the previous year are detailed below:

(Rs. in Crores)

9)       MATERIAL DEVELOPMENTS IN HUMAN RESOURCE: INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company has comprehensive, structured and strategic management of people and the workplace environment. The activities carried out in HRM include the recruitment, training, feedback, compensation, reward, incentives, safety, administration, motivation and performance management etc. Continuous efforts are being taken by IRCTC to attract, acquire and deploy the best human capital and keep them motivated and engaged.

In order to develop employees' competencies for superior performance, IRCTC provides various developmental programs to its employees to keep up with the latest developments and changes happening in the field of operations, technology, HR, finance, etc. During the year, training for 5059 Man Days (target of 5000 Man Days) was provided to employees in IT/Tourism/Catering/HRD and Finance departments in Corporate Office as well as various zones, 22 number (target of 20 number) of senior management personnel were also sent for training of Enterprise Risk Management and 28 number of Employee Contact Programme were also arranged to resolve pending issues/grievances of employees. Further, the details with respect to the number of employees with break-up are mentioned elsewhere in the report.

10)    ENVIRONMENT   PROTECTION   AND   CONSERVATION,   TECHNOLOGICAL   CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION

The details with respect to environment protection and conservation, technological conservation, expenditure on research and developments and foreign exchange earnings and outgo are mentioned elsewhere in the report.

11)    CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY

IRCTC has a well-defined CSR and Sustainable Development Policy in line with Companies Act, 2013, CSR Rules and DPE's Guidelines on Corporate Social Responsibility and Sustainability. A separate chapter on Corporate Social Responsibility (CSR) & Sustainable Development (SD) is given at Annexure-C.

12)    CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis and in the "Directors' Report" describing the Company's objectives, projections and estimates, are forward looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from expressed and implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.

Place : New Delhi Date: 17th August, 2016

For and on behalf of Board of Directors

Sd/- (Dr. A. K. Manocha)

Chairman & Managing Director

DIN:06976502

The Management Discussion and Analysis Report provides an overview of the affairs of the Company, its business environment, vision and objectives, outlook, sectoral and segment-wise operational performance, its resources and systems, strengths, opportunities, constraints, risks and concerns, strategies, prospects, its internal control systems etc. Aseparate report on the Management Discussion and Analysis is given at Annexure-“A”.

The details pertaining to Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given as under: IRCTC is well aware about environment protection and conservation, technological conservation, renewable energy developments and foreign exchange conservation. All out efforts and initiatives are taken by IRCTC to minimize adverse environmental impacts from its operations, products and services by using processes, practices, materials and products that avoid, reduce and control pollution. Compliance with the relevant environmental laws and effective operation of the various pollution control facilities are ensured at all the Plants/Units. For ensuring a safe and clean environment, Central Kitchen, Noida has installed vermicompost for organic waste and Effluent Treatment Plant for treatment of water and is using solar energy for provision of hot water and two induction base brat pans are being used for cooking food. All major Installations at Rail Neer Plants are accredited with ISO 9001-2008 and technology/capacity upgradation from time to time at plants ensures to reduce the wastage of water. The Company is also planning to install solar panels at Rail Neer Plants for conservation of energy. The senior officials of the Company are also sent in seminars/trainings which are conducted to spread awareness in this regard.

(A) Technology absorption Details are mentioned below in the table S.No.ParticularsStatus (a)the details of technology imported;NIL (b)the year of import;NA (c)whether the technology been fully absorbed;NA (d)if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and NA

(A) Foreign exchange earnings and Outgo The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows as compare to previous year are mentioned below: (Rs.in lakhs) Particulars2015-162014-15 Foreign Exchange Earning3522.722188.53 Foreign Exchange Outgo Foreign Travelling Expenses31.1439.95

The Board of Directors of the Company in pursuance of section 134 (5) of Companies Act 2013 confirms that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period; (iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (iv) that the directors have prepared the annual accounts on a going concern basis; and (v) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.