The travel industry has undergone a significant transformation in recent years, driven by technological advancements and changing consumer…

The travel industry has undergone a significant transformation in recent years, driven by technological advancements and changing consumer preferences. Today, the sector is characterized by a digital-first approach that emphasizes convenience, customization, and customer experience. As more travelers turn to online platforms to plan and book their trips, companies leveraging technology effectively are gaining a competitive edge. This digital revolution has led to the emergence of numerous travel tech companies offering a wide array of services, from hotel and flight bookings to complete holiday packages, all accessible with just a few clicks. In this evolving landscape, IndyaDekho Limited has positioned itself as a pioneering new-age tech company. Founded with the vision of simplifying the travel planning and booking process, IndyaDekho has distinguished itself through its innovative approach and comprehensive service offerings. Its proprietary app, "IndyaDekho,” is central to this strategy, designed to cater to the needs of the modern traveler by offering services like hotel bookings, flight bookings, curated holiday deals, and other allied services. Incorporated in the year 20X0, IndyaDekho was listed on recognized stock exchanges in India in November 20X1 (more than twenty years ago). Customer centricity is deeply embedded in IndyaDekho's culture and business operations. Over the years, the company has tapped into existing market potential and forged new growth avenues through a customer-focused approach and commitment to operational excellence. This customer-centric approach serves as a catalyst for innovation, driving the company to seek timely solutions that cater to the evolving preferences of customers. By leveraging an insight-driven and research-based framework, IndyaDekho enhances tech-enabled growth and identifies areas for improvement, facilitating the development of innovative packages and services that foster client satisfaction. Brand Affinity and Omnichannel Strategy IndyaDekho's brand affinity, customer centricity, innovative packages, and omnichannel approach have positioned it as the preferred partner for its discerning patrons. Building on its strengths, IndyaDekho continues to navigate disruptions in the operating environment with agility, delivering innovative offerings and embracing best-of-breed technologies. The first step to meet these objectives was the recruitment of a sports celebrity as an employee. This sports celebrity would help IndyaDekho in maintaining and further developing its brand by participating in local sports events, select cultural events, and advertising campaigns. As per the terms of the contract, the sports celebrity is prohibited from playing for any other team and cannot leave the company without mutual agreement. The amount paid by the company to acquire this right is derived from the skills and fame of the sports celebrity. IndyaDekho continues to invest heavily in maintaining and developing its brand, sponsoring select cultural events, and advertising. This strong brand presence allows the company to charge a premium from its customers. The company believes that it will reap the benefits of this expenditure over a long period and prefers to amortize the expenditure over future periods rather than charging it to profit or loss in a single year. As the industry evolves with the adoption of new technologies, so does IndyaDekho's product and service portfolio. Digitization has transformed how the company extends its offerings to customers, empowering itself digitally to enhance productivity and operational efficiency while serving clients through both physical and digital channels. Stakeholder Engagement and Total Quality Management IndyaDekho appreciates the crucial role of stakeholders in ensuring long-term success. Through effective stakeholder engagement, the company gains valuable insights into their material concerns and expectations. By addressing these concerns and developing mutually beneficial solutions, IndyaDekho strives for inclusive progress that balances growth aspirations with a steadfast commitment to stakeholder integrity. Stakeholder feedback led to the assessment of a holistic quality improvement mechanism based on the principles of Total Quality Management. Refer Extract of Minutes of the 59th Meeting of the Board held on 31st May 20X4 at New Delhi (Annexure). Pressing Matters Discussed by the Board of Directors A few weeks later, an urgent meeting of the Board of Directors was called to discuss the following pressing matters: Matter 1: Unauthorized Payments The company's services include bookings via its app/platform. To facilitate customer service for travel business, the company had engaged a third-party service provider, InstPay Technology Private Limited, to deploy its employees/agents to perform services specifically for the company. Each transaction generates a unique order ID, and all such order IDs and related transaction details are stored on the company's Seller ERP. Access to the company's Seller ERP was granted to InstPay and its employees solely to enable them to provide services and discharge their obligations under the contract, including processing refunds. On 25th May 20X3, a customer notified the company that they hadn't received a payout/settlement for 15 orders. The operations team reviewed the matter and noted that InstPay's nine employees misused their access to fraudulently initiate cancellations of payouts in the Seller ERP. Consequently, the airline/hotel received payment from the company, and the amount was also refunded to the customer's account. The operations team informed the management that these employees had initiated the payment cancellation of 1,905 orders, aggregating to 5 crores, where payments were made to respective airlines/hotels, in addition to crediting these refunds to the customers. Matter 2: Cancel Payment Functionality Abuse The company also facilitates payments and other services for its users through the IndyaDekho app, which includes a credit card bill payment facility. The system is integrated with the credit card issuer bank via different payment rails (e.g., IMPS, NEFT). The app provides a 'cancel payment' functionality intended to cover technical glitches (e.g., where the payment is stuck in the bank's online system). This functionality allowed app users to cancel credit card payment transactions after 4 hours of payment. Some app users repeatedly abused this functionality by initiating multiple credit card payments and subsequently cancelling those transactions after 4 hours. The company refunded the payments to fraudulent users' credit card accounts and transferred cash to the credit card issuer bank. It was discovered that 4,200 app users had abused the "cancel payment" functionality, causing a loss of 33 crores to the company. The company initiated a forensic investigation supported by a well-known law firm. The investigation was supervised by the ex-head of the CBI, who had years of experience dealing with financial crime. The forensic investigator reviewed the change management process for configuring the 'cancellation' functionality, analyzed the transaction dump of orders refunded to identify any patterns/trends, interviewed selected people, assessed the refunds and evaluated for anomalies, and reviewed the HR data and relevant email communications of select employees. The forensic team concluded that there was no collusion with any of the company's employees. The forensic report was submitted to the Board for consideration. Audit and Forensic Report While auditing the company, the auditor performed relevant inquiries with the management as required under the Standards on Auditing. The management updated the auditor on the developments during the year, including the above matters. The auditor requested the forensic report, as it summarizes the findings and can be used as a reference for further action. The management explained that the forensic report is comprehensive, identifies the perpetrators involved, quantifies the financial loss suffered, and provides advice to prevent the recurrence of similar instances. The auditor deliberated internally on whether the unauthorized payment matter would trigger reporting under CARO 2020, especially since the matter was identified by the management. The fraud was not identified by the auditor while performing the audit procedures. He considered whether reporting under CARO would be duplicative since the matter is known to the management and key stakeholders. However, he is also conscious of the reporting threshold under section 143(12) of the Companies Act, 2013, i.e., fraud in excess of 1 crore. GST Rate Revision and Impact During the current year, the company moved to a new head office, entailing the purchase of modular furniture from Office Living LLP. The rates of GST on various dates of the transaction are as follows: Date Particulars Rate of IGST 15 th October, 20X3 Date of issue of invoice 18% 18 th October, 20X3 Date of delivery and installation of Modular Furniture upon the availability of the technician 18% 19 th October, 20X3 Payment is entered in the books of Office Living LLP 18% 26 th October, 20X3 Payment is credited to the bank account of Office Living LLP 28% (Note: The rate has been changed from 18% to 28% with effect from 20th October) ANNEXURE Extract of Minutes of the 59th Meeting of the Board held on 31st May 20X4 at New Delhi Item: Discussion on Quality Improvement at IndyaDekho Independent Director: The concept of quality management has been acknowledged since ancient times. Several manufacturing firms have focused on improving quality and using tools explicitly aimed at quality control. The concept of quality management has been widely accepted in various worldwide standards such as ISO. Therefore, I propose to employ this in IndyaDekho. Managing Director: Quality management is generally understood to enhance the quality of products as an integrated organizational tool. It aims to optimize an organization's competitiveness by improving the quality of its goods. Moreover, TQM includes core team members in meeting consumer needs by employing problem-solving methods to increase the quality of goods. This relates to only manufacturing industry and hence I am not in favour of quality management. In addition, it involves a lot of funds and hence waste of resources in employing service industry like ours. Independent Director: (heatedly) I must disagree, Managing Director. The principles of quality management are not confined to manufacturing alone. Service industries worldwide have successfully adopted these standards to great benefit. Managing Director: (heatedly) That's easy to say, but the practicalities and financial implications for a service industry like ours are vastly different. We cannot afford to invest heavily in a system that might not yield proportional benefits. Chief Management Accountant: The key objective is to achieve a holistic alignment between organizational personnel and their roles to achieve better development, improvement, and protection of the standard of goods and also services to attain consumer satisfaction. TQM philosophy focuses on enhancing business quality and manage satisfaction by maximizing employee participation in decision-making activities. Though the primary aim is to satisfy external customers, TQM acknowledges the challenge of fulfilling external customers' expectations without meeting the needs of internal customers. It aims to surpass the needs of both. CEO: (intervening to calm the discussion) Let's take a step back. Adopting TQM entails a significant shift in organizational culture and structure. Therefore, it is advisable to tailor the application method to fit the company. An objective evaluation of the internal and external environment in which the company functions is recommended to assess the impact areas. We need a balanced approach that considers the unique aspects of our service industry.