This small article outlines the provisions of the revised edition of the IATA Regulations for eligibility and acceptance as Certified Travel Agents in India.
1. GENERAL RULE
1.1. Audited Accounts means accounts reviewed by an auditor recognized as competent by the regulatory authority to perform an audit that are provided to IATA.
2. CRITERIA FOR EVALUATION OF AGENTS’ ACCOUNTS
2.1. All financial information used in the financial criteria will be extracted from the Agent’s
Audited Accounts.
2.2. The following financial tests apply to the evaluation of an Agent’s Audited Accounts:
2.2.1. There must be positive Net Equity
2.2.2. Net Equity divided by long-term debt and other long-term liabilities must be greater than 0.5.
2.2.3. EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortization and
extraordinary items) must be positive save in exceptional circumstances
2.2.4. The EBITDA must exceed the Interest Payable by a factor of a minimum of two
2.2.5. Adjusted Current Assets must exceed Current Liabilities.
3. ANNUAL FINANCIAL REVIEWS
3.1. All Agents must provide Audited Accounts no later than 12 months after each financial year
end, of that Agent for the purposes of evaluation against the financial tests in section 2.
4. INTERIM FINANCIAL REVIEWS
4.1 For any Financial Review conducted for cause at a time other than in respect of an Agent’s
financial year end, IATA may conduct a Financial Review in accordance with section 3 as
applicable to that Agent by reviewing the internal monthly management accounts of the
Agent showing the results for each month since the last accounting date, the cumulative
results to date and the latest balance sheet.
5. FINANCIAL SECURITY
5.1 An Agent will not be accredited or will not continue to be accredited until any Financial
Security required to be provided to IATA has been received by IATA and confirmed to IATA
by way of written confirmation received directly from the third party supporting the
Financial Security that the Financial Security was issued by that third party and is valid.
5.2 Financial Securities will be subject to a minimum notice period of ninety (90) days and be
valid for a minimum of at least one year.
5.3 All Agents must provide a Financial Security with an amount of USD10000/- to be accredited
or to remain accredited or furnish a Financial Security for an amount calculated on the basis
of the BSP average cash sales over last 12 months, for the number of Days Sales at Risk,
whichever is higher
5.4 “Days Sales at Risk” means the number of days from the beginning of the Agent’s reporting
period to the remittance date in respect of that reporting period or periods, plus a margin of up to five days.
5.5 At any point in time, if the existing Financial Security is insufficient to cover the Amount at
Risk, the amount of the Financial Security required will be increased to cover the Amount at
Risk.
5.6 Amount at Risk is calculated by dividing the Day’s Sales at Risk by 360 and applying that
percentage to the BSP cash turnover, or cash turnover as applicable:
“Amount at Risk” = “Days at Risk” x BSP cash turnover last 12 month period
6. SIGNIFICANT CHANGE IN GROSS BSP SALES
6.1 A significant change means any change in the business of the Agent which results in a
change in gross BSP sales of more than 25% as compared to the previous 12 months. A
change can be an increase or a decrease in gross BSP sales.
6.2 An interim Financial Review may also be initiated by IATA where IATA becomes aware of a
significant change in gross BSP sales in accordance with Section 4.
7. DEFINITIONS OF TERMS USED IN THESE CRITERIA
7.1. Adjusted Current Assets – are defined as Current Assets as in the Balance Sheet of the
Accounts after deducting:
- Stocks and work in progress.
- Deposits given to third parties other than IATA,
- Loans to Directors, Associate Companies, (including any subsidiary, associate or company
under common ownership)
- Doubtful debtors,
- Blocked funds, except for funds held in favour of IATA.
7.2. Current Liabilities - are defined as Current Liabilities as in the Balance Sheet of the Accounts
7.3. EBITDA – Earnings Before Interest, Taxation, Depreciation and Amortization
7.4. Financial Irregularity means an irregularity applied as a result of any failure to adhere to the
reporting and remittance procedures described in Resolution 818g Attachment “A”
including but not limited to those irregularities described in Resolution 818g Attachment “A”.
7.5. Financial Review means a review of an Agent’s financial position or the calculation of the
amount of Financial Security required in accordance with this Resolution 800f, or both.
7.6. Irregularity means any irregularity applied under the Passenger Sales Agency Rules for noncompliance with those Rules including but not limited to Financial Irregularities.
7.7. Net Equity or Shareholders’/Owners’ Funds – consists of:
- Share capital
- Share premium
- Retained earnings
- Other distributable reserves
- Shareholder’s loans if subordinated less declared dividends:
EFFECTIVE 1 JUNE 2014 226
7.8. Long Term Debt – All debt liabilities where repayment is due more than twelve months
after the end of the financial period.
7.9. Long Term Liabilities – all liabilities where repayment is due more than twelve months after
the end of the financial period.
7.10. Review means any assessment or evaluation of an Agent’s continuing compliance with the
Passenger Sales Agency Rules.
7.11. Financial Security means a Bank Guarantee (issued by a Scheduled Bank) or an Insurance
Policy issued by an approved Insurer.
No comments:
Post a Comment