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Auditor Report of India Tourism Development Corporation Ltd.

Mar 31, 2015

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of INDIA TOURISM DEVELOPMENT CORPORATION LIMITED which comprises the Balance Sheet as at 31st March, 2015, the Statement of Profit & Loss, the Cash Flow Statement, and a summary of the Significant Accounting Policies and other explanatory information for the year then ended, [in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company's branches at location of the branches].

2. Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

4. Basis for Qualified Opinion

(a) The Corporation is due Rs. 1,332.57 lakh as at 31.03.2015 (Rs. 1,315.92 lakh up to 31.03.2014) from certain subsidiary Companies (which have significant accumulated losses) on account of services rendered and funds advanced to them (including interest thereon). Besides the Corporation holds investments in the said subsidiaries having a book value as at 31.03.2015 of Rs. 1,060.58 lakh (Previous Year Rs. 1,060.58 lakh). The management has represented to us that these investments are of long term nature and the shortfall/diminution in their value is not permanent and that the intrinsic value of assets owned by these companies is considerable to recover the dues and cost of investments, though two of the companies are non-operational and the present net worth of most of these companies is in the negative (Refer Note Nos. 17(1) & 14A(1).

(b) Ashok Hotel, the unit of ITDC has not accounted the Service Tax liability on monthly basis and Interest arising as a consequence thereof as per provisions of a ailment and utilization of CENVAT credit in respect of Reverse Charge and delay in raising of Invoices. In the absence of any working, the impact thereof on the financial statements cannot be ascertained and quantified.

(c) As per Section 143(3)(d) of the Companies Act, 2013, we are reporting that Service Tax Returns and VAT Returns filled for the relevant financial year do not matches with the Books of Accounts respectively are under reconciliation.

(d) Ashok Hotel, the unit of ITDC has certain credit balances shown as "Provision for Expenses" amounting to Rs. 674.94 lakh and debit balances in "Sundry Contractors" amounting to Rs. 239.63 lakh, both are subject to reconciliation/matching and confirmation. In view of the pending reconciliation/matching and confirmation, we are not in a position to ascertain and comment on the correctness of the outstanding balances.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit & loss and its cash flows for the year ended on that date.

6. Emphasis of Matter

1. As per Note No. 32(3) of General Notes, the units of ITDC has calculated consumption of stock and stores, crockery, cutlery, glassware and linen by taking opening balances, purchases and closing balances. The value of losses/shortages/wastages has not been accounted separately. Our opinion is not qualified in respect of this matter.

2. Ashok Hotel, the unit of ITDC has recognized a "Provision for Doubtful Debts" amounting to Rs. 1,570.22 lakh as on March 31, 2015. The unit has not written off bad debts which are pending since years, which has resulted in inflated balance of 'Trade Receivables' & 'Provision for Doubtful Debtors' correspondingly in the Balance Sheet as at March 31, 2015. Our opinion is not qualified in respect of this matter.

3. As per the Rule 6(3A) of CENVAT Credit Rules, 2004 the Ashok Hotel, the unit of ITDC was required to make short payment of amount if any, equal to the proportionate CENVAT credit attributable to the exempted output services provided to the units during the financial year. The unit has not yet made the final assessment of the amount payable till date since inception of this rule, as a consequence of which the unit might be liable to pay interest @ 24% p.a. up to the date of actual payment. In the absence of any working, the impact thereof on the financial statements cannot be ascertained and quantified.

7. Other Matter

We did not audit the financial statements/ information of 34 branches included in the standalone financial statements of the Company whose financial statements/ financial information reflect total assets of Rs. 21,16,86,479.77 as at 31st March, 2015 and total revenues of Rs. 3,18,37,14,847.78 for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not qualified in respect of this matter.

8. Report on Other Legal and Regulatory Requirements

As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(b) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(c) The Balance Sheet, the Statement of Profit & Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) Being a Government company, pursuant to notification no GSR 29(E) dated 21/10/2003 issued by Government of India, Provision of Sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Corporation.

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements.

ii. The Company did not have any long- term contracts including derivative contracts for which there were any material foreseeable losses.

iii. No amount is required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure Referred to in our Report of even date on the Accounts of India Tourism Development Corporation Limited for the Year ended 31st March, 2015

1. Fixed Assets

(a) The Corporation has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except at few branches/ units where records were incomplete in respect of quantitative details and situation etc.

(b) The fixed assets are reported to have been physically verified by the management generally at the year end / reasonable intervals. In most of the branches / units and the head office, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

2. Inventories

(a) The inventory has been physically verified by the management generally once in a year except at few branches / units where verification has been conducted at the end of every half year. Some of the branch auditors have reported that though the inventory has been physically verified the frequency of verification is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Corporation and the nature of its business.

(c) The Corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were not maintained. The discrepancies noticed on physical verification between the physical stocks and the book records were not material.

3. Loans Taken

(a) The Corporation has neither taken for granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

4. Internal Control

In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase of fixed assets, sale of goods and services, purchase and consumption of raw materials, cost of services rendered, stores, stocks, issuance of material and which need to be improved / strengthened.

5. PUBLIC DEPOSITS

The Corporation has not accepted any deposit from public in terms of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules made thereunder.

6. COST RECORDS

As informed to us maintenance of cost Records has not been prescribed by the Central Government under Sub-section (1) of Section 148 of the Companies Act, 2013.

7. STATUTORY DUES

(a) In our opinion the Corporation is generally regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of customs, duty of excise, value added tax, Cess and other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they become payable, are given below:

Name of the Nature of Amount Period to Statute/Unit Dues (Rs. in which the lakh) Amount Relates

ESI, Vigyan Bhawan ESI 4.79 More than six months

ESI, Hyderabad House ESI 1.72 More than six months

ESI, Ashok Hotel ESI 0.445 More than New Delhi six months

EPF, Ashok Hotel EPF 1.87 More than New Delhi six months

(b) Cases, dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute:

Name of the Nature of Dues Amount Statute/Unit (Rs. in lakh)

ESI, Hotel Patliputra Ashok, ESI 0.670 Patna

Service Tax, Ashok Hotel, Service Tax 330.91 New Delhi

ESI, Ashok Hotel, New Delhi ESI 641.90

The Delhi Sales Tax Act, 1975 Local Sales Tax 150.25

The Central Sales Central Sales Tax 3.02 Tax Act, 1956

Andhra Pradesh Local Sales Tax 327.15 VAT Act, 2005

The Delhi Tax on Luxury Tax 42.58 Luxuries Act, 1996

The Income Tax Act, 1961 Income Tax 337.49

17.59

386.91

458.25

49.93

Finance Act, 2014 Service Tax 39.65 Ashok Event

Excise Duty, Kalinga Excise Duty 8.58

ESI, Kalinga ESI 1.45

Service Tax, Kalinga Service Tax 52.91

ESI, Hotel Samrat ESI 71.68

EPF, Hotel Samrat EPF 17.92

ESI, Hotel Janpath ESI 60.08

Custom Act, 1962 Custom Duty 18,478.67

Custom Act, 1962 Custom Duty 42.17

Maharashtra Sales Tax Act Sales Tax / VAT 2,465.62

Name of the Statute/Unit Period to which Forum where the Amount Relates Dispute is Pending

ESI, Hotel Patliputra Ashok, Patna Earlier Years Labour Court

Service Tax, Ashok Hotel, New Delhi Earlier Years CESTAT, Delhi

ESI, Ashok Hotel, New Delhi Earlier Years High Court of Delhi

The Delhi Sales Tax Act, 1975 1990 to 2007 Various Authorities

The Central Sales Tax Act, 1956 1987 to 2002 Various Authorities

Andhra Pradesh Vat Act, 2005 2005 to 2007 Hyderabad High Court

The Delhi Tax on Luxuries Act, 1996 2001-02 & Assistant Commissioner 2002-03 of Luxury Tax

The Income Tax Act, 1961 1992-93 Income Tax Appellate Tribunal

1995-96 Delhi High Court

2006-07 ITAT

2007-08 CIT (A)

2009-10 CIT (A)

Finance Act, 2014 2006 to 2009 Additional Commissioner of Service Tax

Excise Duty, Kalinga 2002-03 High Court, Odisha

ESI, Kalinga Earlier Years Distt. Court, Khurda

Service Tax, Kalinga Earlier Years Addl. Director General, DGCEI, Kolkata

ESI, Hotel Samrat 01.10.1997 to High Court of Delhi 31.03.2000

EPT, Hotel Samrat 1982 to 1985 Supreme Court of India

ESI, Hotel Janpath 1998-2003 High Court of Delhi

Custom Act, 1962 2004-05 CESTAT

Custom Act, 1962 2003 Committee of Disputes

Maharashtra Sales Tax Act 1995-2008 Commissioner Appeals

(c) No amount is required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act and Rules made there under.

8. Even after considering the effects of quantified qualifications, in our opinion, the Corporation does not have accumulated losses. The Corporation has not incurred cash loss during the financial year covered by our audit and has incurred cash loss in the immediately preceding financial year. However, the effect of resolution and quantification of matters reported / of un-quantified qualifications and others reported in the main Audit Report, which may in some cases be significant, have not been taken into consideration, as the amounts are not ascertainable.

9. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

10. According to the information and explanations given to us, the Corporation has given guarantee for loans taken by a subsidiary Hotel Brahmaputra Ashok, from banks or financial institutions, the terms and conditions whereof may prejudicial to the terms of the Company.

11. According to information and explanation given to us, the Corporation has not obtained any term loan.

12. During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Corporation, noticed or reported during the year, nor have we been informed of such case by the management.

For V.K. Verma & Co.

Chartered Accountants (FRN.000386N)

CA Vivek Kumar

Place: New Delhi (Partner)

Date: 29.05.2015 Membership No. 503826


Mar 31, 2014

We have audited the attached Balance sheet of India Tourism Development Corporation Limited, New Delhi as at 31st March, 2014, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the accounts of the Head Office and 4 units/branches audited by us and 35 units/ branches audited by respective branch auditors appointed by the Comptroller and Auditor General of India.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of Qualified Opinion

i. The corporation is due Rs 1315.92 Lakhs as at 31.03.2014 (Rs 1,413.96 Lakhs upto 31.03.2013) from certain subsidiary Companies (which have significant accumulated losses) on account of services rendered and funds advanced to them (including interest thereon). Besides the corporation holds investments in the said subsidiaries having a book value as at 31.03.2014 of Rs. 1060.58 Lakhs (Previous Year Rs 759.70 Lakhs). The management has represented to us that these investments are of long term nature and the shortfall/diminution in their value is not permanent and that the intrinsic value of assets owned by these companies is considerable to recover the dues and cost of investments, though two of the companies are non-operational and the present net worth of most of these companies is in the negative (Refer Note No''s. 17(1) & 14A(1)).

Emphasis of Matter

Without qualifying our opinion, we further report that:

1. As per the auditors of Units having name Duty Free Shop- Goa and Sea Port , Management did not provide to the auditor the details of movement of stock with rate and amount, giving details of item descriptions lying on 31st March, 2014. However, Management explained to the auditor that inventories of the company have been physically verified by the management at the year end and also the inventory lying at the unit has been physically verified by the internal auditor and as reported by him, the inventory was found to be correct as per the book balance, on the day of physical verification.

2. As per the auditor of Vigyan Bhawan The unit has provided an amount of Rs. 4,00,000/- for electricity and water charges on assumption basis. The total liability towards electricity & water charges since the inception of the unit is Rs. 59,34,305/- payable to Directorate of Estate is subject to confirmation. In the absence of requisite details thereof and supporting documents, we cannot comment thereon

3. Non-disclosure of complete details pertaining to transactions entered into during the year with related parties-Accounting Standard-18 -Related Party Disclosure.

4. Non-disclosure of details required in respect of operating leases entered into by the Corporation. [Point No. 11 of General Note 32] - Accounting Standard-19 Leases.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, Except for the matter described in the basis for Qualified Opinion paragraph, the financial statement gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

i) in the case of balance sheet, of the state of affairs of the Corporation as at 31st March, 2014, ii) in the case statement of profit & loss, of the profit for the year ended on that date, and iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

We further report that:

i. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii. In our opinion the Company has kept proper books of account as required by law so far as appears from our examination of those books.

iii. The Balance Sheet, Statement of Profit and Loss dealt with by this Report are in agreement with the books of account,

a. Except for the matter described in the Basis of Qualified Opinion paragraph and emphasis of matter, in our opinion, the Balance Sheet, Statement of Profit and Loss comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

b. Provisions of clause (g) of sub section (1) of section 274 of the Companies Act, 1956 are not applicable to the Government Company in terms of GSR 829(E) dated 21st October, 2003 issued by Government of India, Department of Company affairs.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR ENDED 31st MARCH, 2014.

1. (a) The corporation has generally maintained proper records showing full particulars,

including quantitative details and situation of fixed assets except at few branches / units where records were incomplete in respect of quantitative details and situation etc.

(b) The fixed assets are reported to have been physically verified by the management generally at the yearend / reasonable intervals. In most of the branches / units and the head office, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

(c) The corporation has not disposed off substantial portion of its fixed assets during the year

and hence going concern assumption is not affected.

2. (a) The inventory has been physically verified by the management generally once in a year except at few branches / units where verification has been conducted at the end of every half year. Some of the branch auditors have reported that though the inventory has been physically verified the frequency of verification is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the corporation and the nature of its business Some of the branch auditors have reported that the procedures of physical verification of inventories need to be strengthened and provision made for evaporation loss / obsolescence for dead stock of stores / spares / provisions, crockery & cutlery items and stationery items.

(c) The corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were not maintained. The discrepancies noticed on physical verification between the physical stocks and the book records were not material except at some branches where such discrepancies could not be ascertained in the absence of proper records of inventory. However, since the consumption of these stocks, stores, crockery, cutlery etc. had been worked out by taking opening balance, purchases and closing balance based on physical inventories, the value of shortages etc. has not been ascertained and shown separately..

3. The Corporation has neither taken nor granted any loans, secured or unsecured from / to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clauses 4(iii) (b), (c), (d), (e), (f) and (g) of the said order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase of fixed assets, sale of goods and services, purchase and consumption of raw materials, cost of services rendered, stores, stocks, issuance of material and which need to be improved / strengthened.

5. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable in view of para (a) above.

6. The Corporation has not accepted any deposits from public in terms of Sections 58A and 58AA of the Companies Act, 1956 and the rules made there under.

7. In our opinion, the Corporation has an internal audit system, which is generally commensurate with the size and nature of its business. However, as reported by some of the branch auditors and in units audited by us, the coverage of internal audit needs to be enlarged to cover all areas of operation including timely submission and follow up of the reports.

8. As informed to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. (a) In our opinion the Corporation is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it except as reported by some of the branch auditors regarding irregularity in deposit / non-deposit of undisputed statutory dues.

According to the information and explanations given to us and as reported by the branch auditors in their reports, the undisputed amounts payable in respect of outstanding statutory dues that were in arrears, as on 31.03.2014 for a period of more than six months from the date they became payable are given below :

Name of the Statute, Unit Nature of dues Amount Period to which the (in lacs) amount relates

ESI, Vigyan Bhawan , ESI 4.79 More than six months

ESI, Hyderabad House ESI 1.72 More than six months

ESI, Ashok Hotel, New Delhi ESI 0.445 More than six months

EPF, Ashok Hotel, New Delhi EPF 1.87 More than six months

(b) According to the information & explanations given to us and as reported by the branch auditors in their reports, dues of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited on account of disputes are given below:

Name of the Nature of dues Amount Period to Statute/Unit (in lacs) which the amount relates

ESI, Ashok Hotel ESI 501.79 Earlier Years New Delhi_

Service Tax, Service Tax 330.91 Earlier Years Ashok Hotel New Delhi_

The Delhi Sales Local Sales Tax 150.25 1990 to 2007 tax Act, 1975_

The Central Sales Central Sales 3.02 1987 to 2002 Tax Act, 1956Tax

Andhra Pradesh Local Sales Tax 327.15 2005 to 2007 VAT Act, 2005_

The Delhi Tax on Luxury Tax 42.58 2001-02 & Luxuries Act, 2002-03 1996

The Income Tax Income Tax 337.49 1992-93, Act, 1961

17.59 1995-96

845.16 2006-07 & 2007-08

Finance Act, Service Tax 39.65 2006 to 2009 2014, Ashok Event_

Excise Duty, Excise Duty 13.33 2002-03 Kalinga_

ESI, Kalinga ESI 1.45 Earlier Years

Service Tax Service Tax 52.9 Earlier Years

ESI, Hotel Samrat ESI 71.68 01.10.1997 to 31.03.2000_

EPF, Hotel Samrat EPF 17.92 1982 to 1985

Bihar VAT Act, VAT 3.09 Earlier Years Patliputra Ashok

ESI, Hotel Janpath ESI 60.08 1998-2003_

Custom Act, 1962 Custom Duty 18478.67 2004-05

Custom Act, 1962 Custom Duty 42.17 2003

Maharashtra Sales Sales Tax / VAT 2465.62 1995-2008 tax Act

Name of the Statue/Unit Forum Where dispute is Pending

ESI, Ashok Hotel High Court of Delhi New Delhi

Service Tax, CESTAT, Delhi Ashok Hotel New Delhi

The Delhi Sales Various Authorities tax Act, 1975

The Central Sales Various Authorities Tax Act, 1956

Andhra Pradesh Hyderabad High Court VAT Act, 2005

The Delhi Tax on Assistant Commissioner of Luxury Tax Luxuries Act, 1996

The Income Tax Income Tax Appellate Tribunal Act, 1961 Delhi High Court

ITAT of CIT (A)

Finance Act, Additional Commissioner of Service Tax 2014, Ashok Event

Excise Duty, High Court,Orissa Kalinga

ESI, Kalinga Dist. Court, Khurda

Service Tax Addl.Director General,DGCEI, Kolkatta

ESI, Hotel Samrat High Court of Delhi

EPF, Hotel Samrat Supreme Court of India

Bihar VAT Act, JCCT, Patna Patliputra Ashok

ESI, Hotel Janpath High Court of Delhi

Custom Act, 1962 CESTAT

Custom Act, 1962 Committee of Disputes

Maharashtra Sales Commissioner Appeals tax Act

10. Even after considering the effects of quantified qualifications, in our opinion, the Corporation does not have accumulated losses. The Corporation has not incurred cash loss during the financial year covered by our audit and has incurred cash loss in the immediately preceding financial year. However, the effect of resolution and quantification of matters reported / of un-quantified qualifications and others reported in the main Audit Report, which may in some cases be significant, have not been taken into consideration, as the amounts are not ascertainable.

11. Based on our audit procedures and as per the information and explanations given to us by the management, the Corporation has no dues towards banks, financial institutions or debenture holders, and, hence, provisions of clause 4(xi) of the Order are not applicable to the corporation., .

12. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Corporation is not a chit fund or a nidhi mutual benefit fund / society.

14. According to the information and explanations given to us, the Corporation is not dealing in shares, securities and other investments. The investments in the shares of subsidiary companies are held by the Corporation in its own name and are not traded.

15. Except for a guarantee of Rs. 331.44 lakhs (including interest) provided against loans obtained by a subsidiary company in the earlier year, and which is continuing, the Corporation has not given guarantees during the year for loans taken by others from banks or financial institutions. Further, the terms and conditions on which the corporation had given guarantees for loans taken by others from bank or financial institutions are not prima facie prejudicial to the interest of the Corporation.

16. Based on information and explanations given to us by the management, no term loans have been raised by the corporation during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Corporation, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Corporation has not made any allotment of shares during the year under audit; hence this clause is not applicable to the Corporation.

19. The Corporation has not issued any debentures; hence this clause is not applicable to the Corporation.

20. The Corporation has not raised money by public issues during the year under audit; hence this clause is not applicable to the Corporation.

21. During the course of our examination of the books and records of the corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the corporation, noticed or reported during the year, nor have we been informed of such case by the management.

For V.K. Verma & Co. Chartered Accountants (FRN.000386N)

Sd/- Place:New Delhi Vivek Kumar Date: 14th August,2014 (Partner) MembershipNo. 503826


Mar 31, 2013

Report on the Financial Statements

We have audited the attached Balance sheet of India Tourism Development Corporation Limited, New Delhi as at 31st March, 2013, the Statement of Proft & Loss and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the accounts of the Head Offce and 4 units/branches audited by us and 34 units/ branches audited by respective branch auditors appointed by the Comptroller and Auditor General of India.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance of the Company in accordance with the Accounting Standards referred to in Sub- section (3C) of Section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Basis for Qualifed Opinion

i) Lease charges in respect of land of Hotel Samrat not having been amortised over the lease period or over the reasonable period, as required by AS-6 on ''Depreciation Accounting''. In absence of the supporting documents, its effect on the accounts is indeterminate. [Refer Note No. 11].

ii) There are demands of Rs. 536.65 lakh (Previous Year Rs. 510.19 lakh) from ESI authorities in respect of ESI dues, which are being disputed by the Corporation and not provided for. We are unable to comment on the extent of liability that may devolve upon the Corporation and impact the fnancial statements on resolution, of legal proceedings (Refer Note No. 31(F)).

iii) The Corporation is due Rs. 1,413.96 lakh as at 31.03.2013 (Rs. 1,377.85 lakh upto 31.03.2012) from certain subsidiary Companies (which have signifcant accumulated losses) on account of services rendered and funds advanced to them (including interest thereon). Besides the Corporation holds investments in the said subsidiaries having a book value as at 31.03.2013 of Rs. 759.70 lakh (Previous Year Rs. 729.10 lakh). The management has represented to us that these investments are of long term nature and the shortfall/ diminution in their value is not permanent and that the intrinsic value of assets owned by these companies is considerable to recover the dues and cost of investments, though some of the companies are non-operational and the present net worth of most of these companies is in the negative. The adjustment that may arise cannot be quantifed at this stage. (Refer Note Nos. 17(1) & 14A(1)).

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us,

Except for the matter described in the basis for Qualifed Opinion paragraph, the fnancial statement gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

i) in the case of Balance Sheet of the state of affairs of the Corporation as at 31st March, 2013,

ii) in the case statement of Proft & Loss, of the proft for the year ended on that date.

iii) In the case of Cash Flow statement, of the Cash Flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we further report that:

1) Non-disclosure of complete details pertaining to transactions entered into during the year with related parties-Accounting Standard-18- Related Party Disclosure.

2) Non-disclosure of details required in respect of operating leases entered into by the Corporation. [Point No.10 of General Note 32] - Accounting Standard-19 - Leases.

3) The Vigyan Bhawan has provided Rs. 4 lakh for electricity and water charges on assumption basis. The total liability towards electricity & water charges since the inception of the unit is Rs. 55.34 lakh payable to Directorate of Estate is subject to confrmation. In the absence of the requisite details thereof and the supporting documents, we cannot comment thereon.

4) The Hotel Janpath has accumulated total liability of Rs. 78.51 lakh towards annual lease payable @ Rs. 4.09 lakh to Ministry of Tourism. We are unable to comment on the additional fnancial burden on the unit in the future due to non-availability of supporting documents.

5) The personnel staff employed by the Samrat Hotel and Janpath Hotel is not equipped with the latest information technology, changes in tax law of the country, standards prescribed by the professional bodies and the other corporate and legal changes required for the day to day functioning of the unit.

6) Balance in Trade Receivables, Loans and Advances, Deposits and Trade Payables accounts are subject to

independent confrmation and reconciliation in some of the cases. [Refer Note No. 1)of General Note No.32]

7) In respect of Ashok Hotel, as per the Rule 6(3A) of Cenvat Credit Rules, 2004, the unit was required to make short payment of amount if any, equal to the proportionate Cenvat credit attributable to the exempted output service provided during the year up to 30th June, 2013. The unit has not yet made the fnal assessment of the amount payable if any as a consequence of which the unit might be liable to pay interest @ 24% p.a. up to the date of actual payment;

8) The Ashok Hotel has calculated consumption of stock and stores, crockery, cutlery, glassware and linen by taking opening balances, purchases and closing balances. The value of losses/shortages/wastages has not been accounted separately.

9) In Ashok Hotel, instances of violation of the laid down terms and conditions of the licence agreement by licensee Mayer Health Resorts Limited. The licensee is in unauthorized occupation of premises beyond the prescribed limits as stipulated in the agreement for which the Unit management has taken steps for recovery based on the joint measurement done in the year.

However, in respect of occupation done after the said date, no steps have been taken either for removal of unauthorized changes or for the recovery of the charges.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 as amended by Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the Corporation as we considered appropriate and the information and explanations given during the course of audit and after considering the reports of unit/branch auditors, we enclose in the Annexure a statement on the matters specifed in Paragraphs 4 and 5 of the said Order.

As required by Section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Proft & Loss dealt with by this Report are in agreement with the books of account.

d) Except for the matter described in the Basis for Qualifed Opinion paragraph, in our opinion, the Balance Sheet, Statement of Proft & Loss comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956 ;

e) Provisions of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956 are not applicable to the Government Company in terms of GSR 829(E) dated 21st October, 2003 issued by Government of India, Department of Company affairs.

Annexure Referred to in our Report of even date on the Accounts of India Tourism Development Corporation Limited for the Year ended 31st March, 2013

1. (a) The Corporation has generally maintained proper records showing full particulars, including quantitative details and situation of fxed assets except at few branches / units where records were incomplete in respect of quantitative details and situation etc.

(b) The fxed assets are reported to have been physically verifed by the management generally at the year end / reasonable intervals. In most of the branches / units and the head offce, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

(c) The Corporation has not disposed off substantial portion of its fxed assets during the year and hence going concern assumption is not affected.

2. (a) The inventory has been physically verifed by the management generally once in a year except at few branches / units where verifcation has been conducted at the end of every half year. Some of the branch auditors have reported that though the inventory has been physically verifed, the frequency of verifcation is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verifcation of inventories followed by the management are generally reasonable and adequate in relation to the size of the Corporation and the nature of its business. Some of the branch auditors have reported that the procedures of physical verifcation of inventories need to be strengthened and provision made for evaporation loss / obsolescence for dead stock of stores / spares / provisions, crockery & cutlery items and stationery items.

(c) The Corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were not maintained. The discrepancies noticed on physical verifcation between the physical stocks and the book records were not material except at some branches where such discrepancies could not be ascertained in the absence of proper records of inventory. However, since the consumption of these stocks, stores, crockery, cutlery etc. had been worked out by taking opening balance, purchases and closing balance based on physical inventories, the value of shortages etc. has not been ascertained and shown separately. In this connection refer to our comment in Para 2(b) above also.

3. The Corporation has neither taken nor granted any loans, secured or unsecured from / to companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly provisions of Clauses 4(iii) (b), (c), (d), (e), (f) and (g) of the said order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fxed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase of fxed assets, sale of goods and services, purchase and consumption of raw materials, cost of services rendered, stores, stocks, issuance of material and which need to be improved / strengthened. There has been continuing failure to correct major weaknesses in internal control systems, reported by the internal auditors in the previous year on similar lines, at these branches.

5. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable in view of Para (a) above.

6. The Corporation has not accepted any deposits from public in terms of Sections 58A and 58AA of the Companies Act, 1956 and the Rules made thereunder.

7. In our opinion, the Corporation has an internal audit system, which is generally commensurate with the size and nature of its business. However, as reported by some of the branch auditors and in units audited by us, the coverage of internal audit needs to be enlarged to cover all areas of operation including timely submission and follow up of the reports.

8. As informed to us, the Central Government has not prescribed maintenance of cost records under Clause (d) of Sub-section (1) of Section 209 of the Companies Act, 1956.

9. (a) In our opinion, the Corporation is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it except as reported by some of the branch auditors regarding irregularity in deposit / non-deposit of undisputed statutory dues.

According to the information and explanations given to us and as reported by the branch auditors in their reports, the undisputed amounts payable in respect of outstanding statutory dues that were in arrears, as on 31.03.2013 for a period of more than six months from the date they became payable are given below :

Name of the Nature of Amount Period to Statute/Unit Dues (Rs.in which the lakh) Amount Relates

ESI, Vigyan Bhawan ESI 4.79 More than

Hyderabad House 1.72 six months

Ashok Hotel 0.396

EPF, Ashok Hotel EPF 1.87 More than

six months

(b) According to the information & explanations given to us and as reported by the branch auditors in their reports, dues of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited on account of disputes are given below:

Name of the Nature of Dues Amount Statute/Unit (Rs.in lakh)

The Delhi Sales tax Local Sales Tax 150.25 Act, 1975

The Central Sales Tax Central Sales Tax 3.02 Act, 1956

Andhra Pradesh VAT Local Sales Tax 327.15 Act, 2005

Maharashtra Sales Tax Act Sales Tax 2,045.50

The Delhi Tax on Luxuries Luxury Tax 42.58 Act, 1996

Name Period to which Forum where the Amount Relates Dispute is Pending

The Delhi Sales tax 1990 to 2007 Various Authorities

The Cntral sales tax 1987 to 2002 Various Authorities

Andhral Pradesh VAT 2005 to 2007 Hyderabad High Court

Mahareshtra sales tax ACT 1995 to 2008 Commissioner Appeals

The Delhi Tax on Luxuries ACT 1956 2001-02 & 2002-03 Assistant Commissioner of Luxury Tax

Name of the Nature of Dues Amount Statute/Unit (Rs.in lakh)

The Income Tax Act, 1961 Income Tax 475.14

Customs Act, Custom Duty 18,478.67 1962 Mumbai

Customs Act, Custom Duty 2.14 1962 Hyderabad

Provident Fund (PF) 1.14 Hotel Janpath

Hotel Samrat 17.92

Custom Act, Custom Duty 45.17 1962 Kolkata

Excise Duty, Excise Duty 13.33 Kalinga

Employees'' State ESI Insurance

Hotel Janpath 25.85

Ashok Hotel 479.59

Hotel Samrat 71.68

Vigyan Bhawan ESI 4.78

Employees'' State ESI 1.45

Insurance Kalinga

Employees'' State ESI 0.75 Insurance

Hotel Patliputra Ashok

Bihar VAT Act Local Sales Tax 3.09

Hotel Patliputra Ashok

Service Tax Act, 1994 Service Tax

Ashok Hotel 325.60

ARMS 39.65

Name Period to which Forum where the Amount Relates Dispute is Pending

The Income Tax Act, 1961 1992-93 Income Tax Appellate Tribunal

1995-96 Delhi High Court

2005-06 CIT (A)

2008-09 ITAT

Customs Act, 2004 to 2005 CESTAT

Customs Act, 2006-07 Committee on Disputes

Provident Fund 1988-89 Delhi High Court

Hotel Samrat 1982-85 Supreme Court of India

Custom Act, 2003 Committee on Disputes

Excise Duty, 2002-03 High Court, Odisha

Employees'' State Earlier Years High Court of Delhi

Employees'' State Earlier Years Distt. Court, Khurda

Earlier Years Labour Court

Earlier Years JCCT, Patna

Service Tax Act, 1994 Earlier Years CESTAT, Delhi

Service Tax Act, 1994 2010-11 Addl. Commissioner of Service Tax

10. Even after considering the effects of quantifed qualifcations, in our opinion, the Corporation does not have accumulated losses. The Corporation has not incurred cash loss during the fnancial year covered by our audit and has incurred cash loss in the immediately preceding fnancial year. However, the effect of resolution and quantifcation of matters reported / of un-quantifed qualifcations and others reported in the main Audit Report, which may in some cases be signifcant, have not been taken into consideration, as the amounts are not ascertainable.

11. Based on our audit procedures and as per the information and explanations given to us by the management, the Corporation has no dues towards banks, fnancial institutions or debenture holders, and, hence, provisions of Clause 4(xi) of the Order are not applicable to the Corporation.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Corporation is not a chit fund or a Nidhi Mutual Beneft Fund / Society.

14. According to the information and explanations given to us, the Corporation is not dealing in shares, securities and other investments. The investments in the shares of subsidiary companies are held by the Corporation in its own name and are not traded.

15. Except for a guarantee of Rs. 312.93 lakh (including interest) provided against loans obtained by a subsidiary company in the earlier year, and which is continuing, the Corporation has not given guarantees during the year for loans taken by others from banks or fnancial institutions. Further, the terms and conditions on which the Corporation had given guarantees during earlier years for loans taken by others from bank or fnancial institutions are not prima facie prejudicial to the interest of the Corporation.

16. Based on information and explanations given to us by the management, no term loans have been raised by the Corporation during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Corporation, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Corporation has not made any allotment of shares during the year under audit, hence this clause is not applicable to the Corporation.

19. The Corporation has not issued any debentures, hence this clause is not applicable to the Corporation.

20. The Corporation has not raised money by public issues during the year under audit, hence this clause is not applicable to the Corporation.

21. During the course of our examination of the books and records of the Corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Corporation, noticed or reported during the year, nor have we been informed of such case by the management.

For V.K. Verma & Co.

Chartered Accountants

(FRN.000386N)

Vivek Kumar

Place: New Delhi (Partner)

Date: 04.09.2013 Membership No. 503826


Mar 31, 2012

1. We have audited the attached Balance sheet of India Tourism Development Corporation Limited, New Delhi as at 31st March, 2012, the Statement of Profit and Loss account and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the accounts of the Head Office and 4 units/branches audited by us and 32 units/ branches audited by respective branch auditors appointed by the Comptroller and Auditor General of India. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the Corporation as we considered appropriate and the information and explanations given during the course of audit and after considering the reports of unit/branch auditors, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) There are demands of Rs 510.19 Lakhs (Previous Year Rs 488.01 Lakh;;) from ESI authorities in respect of ESI dues, which are being disputed by the Corporation and not provided for (Refer Note No. 31(F)).

ii) The corporation is due Rs 1377.85 Lakhs as at 31.03.2012 (Rs 1,306.96 Lakhs upto 31.03.2011) from certain subsidiary Companies (which have significant accumulated losses) on account of services rendered and funds advanced to them (including interest thereon). Besides the corporation holds investments in the said subsidiaries having a book value as at 31.03.2012 of Rs.729.10 Lakhs (Previous Year Rs 729.10 Lakhs). The management has represented to us that these investments are of long term nature and the shortfall/diminution in their value is not permanent and that the intrinsic value of assets owned by these companies is considerable to recover the dues and cost of investments, though some of the companies are non-operational and the present net worth of most of these companies is in the negative (Refer Note No's. 17(1) & 14A(1)).

iii) Lease Rent / registration fee / ground rent / depreciation due to non- finalization of terms ofpurchase / lease / title deeds of land and buildings have not been provided for. [Refer Note No. 11]

iv) Pending reconciliation / receipt of detailed statement of accounts from NBCC, provision has not been made for interest payable to / recoverable from and amount due from NBCC pertaining to Iraq Project. Effect on the accounts on due receipt / adjustment / accounting thereof cannot be indicated at this stage. [Refer Note No 2 & 3 of General Note No. 32]

v) Balance in Trade Receivables, Loans and Advances, Deposits and Trade Payables accounts are subject to independent confirmation and reconciliation in some of the cases. [Refer Note No. 1 of General Note No. 3 2] '

5. Without qualifying our opinion, we further report that: '

i) Provision for Property tax of Rs. 240.83 lakhs is standing in the books of The Ashok Hotel as on 31.03.2012 out of this Rs. 62.01 lakhs is seems to be excess provision made, which is pending assessment proceedings;

ii) The Ashok Hotel is showing an Amount of Rs. 17,05,250/- (Dr.) in the Loans & Advances- Doubtful(othevs). However, there are no details related to this amount present with the unit. Unit should write off these amount as there is no details available for these assets;

iii) The Government of India had promulgated "The Micro, Small and Medium Enterprises Development Act, 2006". As per the said act, the Corporation is to identify the parties and pay them interest the specified period if not paid. The corporation is in the process of identifying the suppliers. In view of this, the liability for interest could not be worked out.

6. Further to our comments in the annexure referred to in paragraph 3 and paragraph

5 and subject to our comments in paragraph 4 above, we further report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit except month wise movement of stock of DFS-Goa. In the absence of which we could not reconcile stock reported as on 31s1 March, 2012 with book records and its value.

b) In our opinion proper books of account, as required by law, have been kept so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branch auditors in respect of the units / branches audited by them;

c) The reports of the branch auditors on the accounts of units / branches audited by them have been received and considered by us in preparing this report after making such adjustments as we considered necessary;

d) The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account and audited financial statements of the branches;

e) In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except to the extent referred to hereunder :-

- Lease charges in respect of land of Hotel Samrat not having been amortised. [Note No. 11] - Accounting Standard -6 - Depreciation Accounting.

- Conversion of balance with foreign bank in Iraqi dinar at the rate prevailing as on 31st March, 1991 instead of applying year end rates. [Refer Note No. 18J - Accounting Standard-11- Accounting for Effect of Changes in Foreign Exchange Rates

- Non-disclosure of complete details pertaining to transactions entered into during the year with related parties-Accounting Standard-18- Related Party Disclosure.

- Non-disclosure of details required in respect of operating leases entered into by the Corporation. [Point No. 11 of General Note 32] - Accounting Standard-19 - Leases.

From the available information, we are unable to quantify the impact on the financial statements due to non-compliance of The Accounting Standards referred to above.

f) The provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Corporation in terms of notification No. G.S.R. 829(E) dated 21st October, 2003 issued by Government of India, Department of Company Affairs;

7. We further report that:-

a) We are unable to comment on the extent of liability that may devolve upon the corporation and impact the financial statements on resolution, of legal proceedings referred to in Para 4(i).

b) The adjustments that may arise pertaining to matters referred to in Paras 4(ii), 4(iii), 4(iv), 4(v) which cannot be quantified at this stage.

8. Subject to our comments in paragraphs 6(e) and 7 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the accounting policies and other notes, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

i) in the case of balance sheet, of the state of affairs of the Corporation as at 31st March, 2012,

ii) in the case statement of profit & loss, of the profit for the year ended on that date, and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR ENDED 31st MARCH, 2012.

1. (a) The corporation has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except at few branches / units where records were incomplete in respect of quantitative details and situation etc.

(b) The fixed assets are reported to have been physically verified by the management generally at the yearend / reasonable intervals. In most of the branches / units and the head office, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

(c) The corporation has not disposed off substantial portion of its fixed assets during the year and hence going concern assumption is not affected.

2. (a) The inventory has been physically verified by the management generally once in a year except at few branches / units where verification has been conducted at the end of every half year. Some of the branch auditors have reported that though the inventory has been physically verified the frequency of verification is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the corporation and the nature of its business Some of the branch auditors have reported that the procedures of physical verification of inventories need to be strengthened and provision made for evaporation loss / obsolescence for dead stock of stores / spares / provisions, crockery & cutlery items and stationery items.

(c) The corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were not maintained. The discrepancies noticed on physical verification between the physical stocks and the book records were not material except at some branches where such discrepancies could not be ascertained in the absence of proper records of inventory. However, since the consumption of these stocks, stores, crockery, cutlery etc. had been worked out by taking opening balance, purchases and closing balance based on physical inventories, the value of shortages etc. has not been ascertained and shown separately. In this connection refer to our comment in para 2(b) above also.

3. The Corporation has neither taken nor granted any loans, secured or unsecured from / to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clauses 4(iii) (b), (c), (d), (e), (f) and (g) of the said order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase of fixed assets, sale of goods and services, purchase and consumption of raw materials, cost of services rendered' stores, stocks, issuance of material and which need to be improved / strengthened. There has been continuing failure to correct major weaknesses in internal control systems, reported by the internal auditors in the previous year on similar lines, at these branches.

5. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable in view of para (a) above.

6. The Corporation has not accepted any deposits from public in terms of Sections 58A and 58AA of the Companies Act, 1956 and the rules made there under.

7. In our opinion, the Corporation has an internal audit system, which is generally commensurate with the size and nature of its business. However, as reported by some of the branch auditors and in units audited by us, the coverage of internal audit needs to be enlarged to cover all areas of operation including timely submission and follow up of the reports.

8. As informed to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. (a) In our opinion the Corporation is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it except as reported by some of the branch auditors regarding irregularity in deposit / non-deposit of undisputed statutory dues.

According to the information and explanations given to us and as reported by the branch auditors in their reports, the undisputed amounts payable in respect of outstanding statutory dues that were in arrears, as on 31.03.2012for a period of more than six months from the date they became payable are given below :

Name of the Statute, Unit Nature of dues Amount Period to which the (in lacs) amount relates

ESI, Vigyan Bhawan , ESI 4.79 More than six months

Hyderabad House 1.72

(b) According to the information & explanations given to us and as reported by the branch auditors in their reports, dues of Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited on account of disputes are given below:

Name of the Nature of Amount Period to -Forum where Statute/Unit dues (in lacs) which the dispute is Pending amount relates

The Delhi Sales Local Sales 1839.83 1990 to 2007 Various Authorities tax Act, 1975 Tax

The Central Central Sales 12.84 1987 to 2002 Various Authorities Sales Tax Act, Tax 1956

Andhra Pradesh Local Sales 327.15 2005 to 2007 Hyderabad High VAT Act, 2005 Tax Court

Maharashtra Sales Tax 2045.50 1995 to 2008 Commissioner Sales Tax Act Appeals

The Delhi Tax Luxury Tax 42.58 2001-02 & Assistant on Luxuries Act, 2002-03 Commissioner of 1996 Luxury Tax

The Income Tax Income Tax 380.26 1992-93, Income Tax Act, 1961 Appellate Tribunal

1994-95 & Delhi High Court 1995-96

2008-09 & ITAT of CIT (A) 2009-10

Customs Act, Custom Duty 18,480.11 1995 to 2008 CESTAT 1962 Mumbai

Customs Act, Custom Duty 2.14 2006-07 Committee on 1962 Hyderabad Disputes

Provident Fund (PF) Janpath 1.14 1988-89 Delhi High Court

Samrat 17.92 1982-85 Supreme Court of India

Custom Act, Custom Duty 45.17 2003 Committee on 1962 Kolkata Disputes

Excise Duty, Excise Duty 13.33 2002-03 High Court,Orissa Kalinga

Employees State ESI Insurance Janpath 27.90 Earlier Years High Court of Delhi Ashok 442.09

Samrat 21.91

IGIAR 11.04

Taj Restt 7.25

Employees State ESI 1.45 Earlier Years Dist. Court,Khurda Insurance Kalinga

Sales Tax, Taj Sales Tax 0.85 Earlier Years Sales Tax Tribunal Restt.

Employees State ESI 0.75 Earlier Years Labor Court Insurance Hotel Pataliputra Ashok

Bihar VAT Act Local Sales 3.09 Earlier Years JCCT, Patna Hotel Pataliputra Tax Ashok

Service Tax Service Tax Act, 1994

Ashok Hotel 16.47 Earlier Years CESTAT, Delhi ARMS 39.65 2010-11 Add. Commissioner of Service Tax

10. Even after considering the effects of quantified qualifications, in our opinion, the Corporation does not have accumulated losses. The Corporation has not incurred cash loss during the financial year covered by our audit and has incurred cash loss in the immediately preceding financial year. However, the effect of resolution and quantification of matters reported / of un-quantified qualifications and others reported in the main Audit Report, which may in some cases be significant, have not been taken into consideration, as the amounts are not ascertainable.

11. Based on our audit procedures and as per the information and explanations given to us by the management, the Corporation has no dues towards banks, financial institutions or debenture holders, and, hence, provisions of clause 4(xi) of the Order are not applicable to the corporation.,.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Corporation is not a chit fund or a nidhi mutual benefit fund / society.

14. According to the information and explanations given to us, the Corporation is not dealing in shares, securities and other investments. The investments in the shares of subsidiary companies are held by the Corporation in its own name and are not traded.

15. Except for a guarantee of Rs. 294.36 lakhs (including interest) provided against loans obtained by a subsidiary company in the earlier year, and which is continuing, the Corporation has not given guarantees during the year for loans taken by others from banks or financial institutions. Further, the terms and conditions on which the corporation had given guarantees during earlier years for loans taken by others from bank or financial institutions are not prima facie prejudicial to the interest of the Corporation.

16. Based on information and explanations given to us by the management, no term loans have been raised by the corporation during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Corporation, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Corporation has not made any allotment of shares during the year under audit, hence this clause is not applicable to the Corporation.

19. The Corporation has not issued any debentures, hence this clause is not applicable to the Corporation.

20. The Corporation has not raised money by public issues during the year under audit, hence this clause is not applicable to the Corporation.

21. During the course of our examination of the books and records of the corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the corporation, noticed or reported during the year, nor have we been informed of such case by the management.

For V.K. Verma & Co.

Chartered Accountants

(FRN.000386N)

Vivek Kumar

(Partner)

Membership No. 505826

Place: New Delhi

Date: 31/08/2012


Mar 31, 2010

1. We have audited the attached balance sheet of India Tourism Development Corporation Limited, New Delhi as at 31st March, 2010, the profit and loss account and also the cash flow statement for the year ended on that date annexed thereto, in which are incorporated the accounts of the Head Office and 4 units/branches audited by us and 34 units/ branches audited by respective branch auditors appointed by the Comptroller and Auditor General of India. These financial statements are the responsibility of the Corporations management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion,

3. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the Corporation as we considered appropriate and the information and explanations given during the course of audit arid after considering the reports of unit/branch auditors, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) There are demands ofRs 465.81 Lakhs (Previous Year Rs 436.60 Lakhs) from ESI authorities in respect of ESI dues, which are being disputed by the Corporation and not provided for (Refer Note Nos. 2(b)).

ii) The corporation is due Rs 1,755.17 Lakhs as at 31.03.2010 (Rs 2,100.99 Lakhs upto 31.03.2009) from certain subsidiary Companies (which have significant accumulated losses) on account of services rendered and funds advanced to them (intluding interest thereon). Besides the corporation holds investments in the said subsidiaries having a book value as at 31.03.2010 of Rs.729.10 Lakhs (Previous Year Rs 729.10 Lakhs). The management has represented to us that these investments are of long term nature and the shortfall/diminution in their value is not permanent and that the intrinsic value of assets owned by these companies is considerable to recover the dues and cost of investments, though some of the companies are non-operational and the present net worth of most of these companies is in the negative (Refer Note Nos. 6 (a)(i) & (ii)).

iii) (a) Compensation payable to a party , whose premises were under occupation by the Corporations ATT Division , Delhi upto 28.02.2007 has not been provided as determination / quantification by the Commissioner appointed for the purpose is pending. [Refer Note No. 2(c)].

(b) Lease Rent / registration fee/ ground rent / depreciation due to non- finalization of terms of purchase/lease/title deeds of land and buildings have not been provided for. [Refer Note No. 4]

iv) Amount of Rs 1326.12 Lakhs (Previous Year Rs 1326.12 Lakhs) shown as recoverable from demerged units for the period from l" April 2001 till the date of physical transfer on account of funds transferred and expenses incurred on behalf of the said units, but not received till date, has been considered good of recovery by the management. . [Refer Note No. 8(b)]

v) Impairment in the value of assets /partly completed assets aggregating to Rs. 209.69 Lakhs (Previous Year Rs 206.56 lakhs) included under capital work in progress has not been provided. [Refer Note No. 3(b)]

vi) Pending reconciliation / receipt of detailed statement of accounts from NBCC, provision has not been made for interest payable to/recoverable from and amount due from NBCC pertaining to Iraq Project. Effect on the accounts on due receipt /adjustment / accounting thereof cannot be indicated at this stage. [Refer Note Nos. 6(c) & 7(b)]

vii) Capitlisation effected/charged to expenditure on provisional/payment basis/pending/receipt of final bills / finalisation and certification by architects. Effect on the accounts on due adjustment there of, cannot be indicated at this stage. [Refer Note Nos. 4(g)/4(h)J

viii) Balance in Sundry Debtors, Loans and Advances, Deposits and Sundry Creditors accounts are subject to independent confirmation and reconciliation in some cases. [Refer Note No. 6(b)]

ix) In respect of lease agreements with some of the licensees the corporation has, despite prescribed conditions, not charged interest/levied damages on overdue amounts. These have also not been quantified. Consequently effect on the accounts on due quantification/accounting thereof cannot be indicated at this stage. (Refer Accounting Policy No. 13(v))

x) The Corporation has provided for Rs. 3,3 3 5.24 Lakhs in respect of unionized workers on IDA pattern w.e.f 01.01.2007. However, while working out the liability towards pay revision as above, the Corporation had not considered the liability on account of Gratuity and Leave Encashment. (Refer Note No. 11(b)).

5. We further report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit except to the extent referred to in Note No. 6(c) of Schedule 12 regarding status of dues payable / recoverable from a party and Note No. 8(b) of Schedule 12 regarding confirmation of amount recoverable from demerged units;

b) In our opinion proper books of account, as required by law, have been kept so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branch auditors in respect of the units / branches audited by them;

c) The reports of the branch auditors on the accounts of units / branches audited by them have been received and considered by us in preparing this report after making such adjustments as we considered necessary;

d) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and audited financial statements of the branches;

e) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except to the extent referred to hereunder:-

- Valuation of Inventories at cost in some of the units as against lower of cost or net realizable value - Accounting Standard-2 - Valuation of Inventories.

- Lease charges in respect of land of Hotel Samrat not having been amortised. [Note No. 4(c)] - Accounting Standard -6 - Depreciation Accounting.

- Conversion of balance with foreign bank in Iraqi dinar at the rate prevailing as on 31s March, 1991 instead of applying year end rates. [Refer Note No. 7(a)] - Accounting Standard-11- Accounting for Effect of Changes in Foreign Exchange Rates

- Non-disclosure of complete details pertaining to transactions entered into during the year with related parties-Accounting Standard-18- Related Party Disclosure.

- Non-disclosure of details required in respect of operating leases entered into by the Corporation. [Note No. 13(v) of Schedule-12] - Accounting Standard-19 - Leases.

- Except to the extent referred to in note 13(viii) of Schedule 12, the corporation has not determined impairment in other assets in terms of Accounting Standard-28-Impairment of Assets during the year.

From the available information, we are unable to quantify the impact on the financial statements due to non-compliance of The Accounting Standards referred to above.

f) The provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Corporation in terms of notification No.G.S.R. 829(E) dated 21st October, 2003 issued by Government of India, Department of Company Affairs;

6. We further report that:-

a) We are unable to comment on the extent of liability that may devolve upon the Corporation and impact the financial statements on resolution, of legal proceedings referred to in Para 4(i) and 4(iii)(a);

b) The adjustments that may arise pertaining to matters referred to in Para 4(ii), 4(iii)(b), 4(vi), 4(vii), 4(viii), 4(viii), 4(ix) and 4(x), which cannot be quantified at this stage.

c) The impact of our comments in Para 4(iv) and 4(v), some of which were subject matter of audit qualifications in the earlier years also, is given below:

Reported Resultant Impact Particulars figure figure (net of tax) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs)

A. Reserve & Surplus [Refer Paras 4(iv) & 4(v) 22802.59 21788.80 1013.79

B Capital Work-in-progress 4457.46 4247.77 209.69 [Refer Para 4(v)]

C Current Assets, Loans and Advances 47858.68 46532.56 1326.12 [Refer Para 4(iv)].

D Current Liabilities and 30132.26 29610.24 522.02 Provisions (Tax Impact)

7. Subject to our comments in paragraphs 5(e) and 6 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the accounting policies and other notes, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -

i) in the case of balance sheet, of the state of affairs of the Corporation as at 31st March, 2010,

ii) in the case of profit & loss account, of the loss for the year ended on that date, and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR ENDED 31st MARCH, 2010.

1. (a) The corporation has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except at few branches / units where records were incomplete in respect of quantitative details and situation etc.

(b) The fixed assets are reported to have been physically verified by the management generally at the yearend/reasonable intervals. In most of the branches/units and the head office, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

(c) The corporation has not disposed off substantial portion of its fixed assets during the year and hence going concern assumption is not affected.

2. (a) The inventory has been physically verified by the management generally once in a year except at few branches / units where verification has been conducted at the end of every half year. Some of the branch auditors have reported that though the inventory has been physically verifiedthe frequency of verification is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the corporation and the nature of its business except at ATSS where the branch auditor have opined the procedures to be not reasonable. Some of the other branch auditors have reported that the procedures of physical verification of inventories need to be strengthened and provision made for evaporation loss / obsolescence for dead stock of stores/ spares/ provisions, crockery & cutlery items and stationery items.

(c) The corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were riot maintained. The discrepancies noticed on physical verification between the physical stocks and the book records were not material except at some branches where such discrepancies could not be ascertained in the absence of proper records of inventory. However, since the consumption of these stocks, stores, crockery, cutlery etc. had been worked out by taking opening balance, purchases and closing balance based on physical inventories, he value of shortages etc. has not been ascertained and shown separately. In this connection refer to our comment in para 2(b) above also.

3. The Corporation has neither taken nor granted any loans, secured or unsecured from/to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clauses 4(iii)(b), (c), (d), (e), (f) and (g) of the said order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase affixed assets, sale of goods and services, deposit of Foreign Currency cash at Duty free shop units, income from licenses, maintenance of accounting records, reconciliation of control accounts, extension of credit, issuance of credit notes, purchase and consumption of raw materials, cost of services rendered, stores, stocks, issuance of material, valuation of inventories at DFS units Cat Goa), and which need to be improved / strengthened. There has been continuing failure to correct major weaknesses in internal control systems, reported by the internal auditors in the previous year on similar lines, at these branches.

5. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(b) Not applicable in view of para (a) above.

6. The Corporation has not accepted any deposits from public in terms of Sections 58A and 58AA of the Companies Act,1956 and the rules made there under.

7. In our opinion, the Corporation has an internal audit system which is generally commensurate with the size and nature of its business. However, as reported by some of the branch auditors, the coverage of internal audit needs to be enlarged to cover all areas of operation including timely submission and follow up of the reports.

8. As informed to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. (a) In our opinion the Corporation is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax,Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it except as reported by some of the branch auditors regarding irregularity in deposit/ non-deposit of undisputed statutory dues.

According to the information and explanations given to us and as reported by the branch auditors in their reports, the undisputed amounts payable in respect of outstanding statutory dues that were in arrears, as on 31.03.2010for a period of more than six months from the date they became payable are given below :

Name of the Statute, Unit Nature of dues Amount Period to which the (in lacs) amount relates

ESI, Vigyan Bhawan, ESI 4.79 More than six months Hyderabad House 1.72

Sales Tax & VAT, ATT Chennai Sales Tax VAT 1.25 More than six months

(b) According to the information & explanations given to us and as reported by the branch auditors in their reports, dues of Provident Fund, Investor . Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited on account of disputes are given below:

Name of the Nature of Amount Statue/Unit Dues

The Delhi Sales Local Sales 8813.00 tax Act, 1975 Tax

The Central Central Sales 12.84 Sales Tax Act, Tax 1956

Andhra Pradesh Local Sales 327.15 VAT Act, 2005 Tax

Karnataka Sales Local Sales 420.71 Tax Act, 2004 Tax

Orissa Sales Tax Sales Tax 1.07 act

Maharashtra Sales Tax 2465.62 Sales Tax Act

The Delhi Tax Luxury Tax 266.88 on Luxuries Act, 1996

The Income Tax Income Tax 507.09 Act, 1961

Customs Act, Custom Duty 21818.11 1962 Mumbai

Customs Act, Custom Duty 2.14 1962 Hyderabad

Provident Fund (PF) 1.14 Janpath

Service Tax, Service Tax 15.54 IGIAR

Customs Custom Duty 45.17 Authority by Kolkata

Name of the Period to Forum where Statue/Unit which the dispute is Pending amount relates

The Delhi Sales tax Act, 1975 1990 to 2006 Various Authorities

The Central Sales Tax Act, 1956 1987 to 2002 Various Authorities

Andhra Pradesh VAT Act, 2005 2005 to 2007 Hyderabad High Court

Karnataka Sales Tax Act, 2004 2004-2005 Karnataka High Court

Orissa Sales Tax act 1988 to 2005 Various Authorities

Maharashtra Sales Tax Act 1982 to 1996 Mumbai High Court, Maharashtra Sales Tax Tribunal

The Delhi Tax on Luxuries Act, 1996 1997-98, Assistant 2001-02 & Commissioner of 2002-03 Luxury Tax

The Income Tax Act, 1961 1992-93, Income Tax 1994-95 & Appellate Tribunal 1995-96 2007-08 CIT (A)

Customs Act, 1962 Mumbai 1995 to 2008 Commissioner (Appeals)

Customs Act, 1962 Hyderabad 2006-07 Committee on Disputes

Provident Fund Janpath Earlier Years High Court

Service Tax, IGIAR 2007-08 to CESTAT, Delhi 2009-10

Customs Authority by Kolkata 2003 Committee on Disputes



Name of the Nature of Amount Statue/Unit Dues

Customs Custom Duty 9.26 Authority, Delhi

Excise Duty, Excise Duty 13.33 Kalinga

Employees State ESI

Insurance

Janpath 27.91

Ashok 397.70

Samrat 21.91

IGIAR 11.04

Taj Restt 7.25

Employees State ESI 1.45 Insurance Kalinga

Name of the Period to Forum where Statue/Unit which the dispute is Pending amount relates



Customs Authority, Delhi 2005-06 Customs Authority

Excise Duty, Kalinga 2002-03 High Court,Orissa

Employees State Insurance Janpath Ashok Samrat IGIAR Taj Restt High Court of Earlier Years Delhi

Employees State Insurance Kalinga Earlier Years Dist. Court, Khurda

10. Even after considering the effects of quantified qualifications, in our opinion, the Corporation does not have accumulated losses. The Corporation has incurred cash loss during the financial year covered by our audit and has not incurred cash losses in the immediately preceding financial year. However, the effect of resolution and quantification of matters reported / of un-quantified qualifications and others reported in the main Audit Report, which may in some cases be significant, have not been taken into consideration, as the amounts are not ascertainable.

11. Based on our audit procedures and as per the information and explanations given to us by the management, the Corporation has no dues towards banks, financial institutions or debenture holders, and, hence, provisions of clause 4(xi) of the Order are not applicable to the corporation.,.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Corporation is not a chit fund or a nidhi mutual benefit fund / society.

14. According to the information and explanations given to us, the Corporation is not dealing in shares, securities and other investments. The investments in the shares of subsidiary companies are held by the Corporation in its own name and are not traded.

15. Except for a guarantee of Rs. 90 lacs provided against loans obtained by a subsidiary company in the earlier year, and which is continuing, the Corporation has not given guarantees during the year for loans taken by others from banks or financial institutions. Further, the terms and conditions on which the corporation had given guarantees during earlier years for loans taken by others from bank or financial institutions are not prima facie prejudicial to the interest of the Corporation.

16. Based on information and explanations given to us by the management, no term loans have been raised by the corporation during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Corporation, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Corporation has allotted 1,82,50,000 Equity Shares of Rs. 10/- each at a premium of Rs. 30/- each to the President of India through Ministry of Tourism, Government of India (promoter) through preferential allotment.

19. The Corporation has not issued any debentures, hence this clause is not applicable to the Corporation.

20. The Corporation has not raised money by public issues during the year under audit, hence this clause is not applicable to the Corporation.

21. During the course of our examination of the books and records of the corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the corporation, noticed or reported during the year, nor have we been informed of such case by the management.

For General Lalla Mehta

Chartered Accountants (FRN 002830N)

Ashok Grover (Partner>

M. No. 81784 Place: New Delhi Date: 07 12 10


Mar 31, 2009

1. We have audited the attached balance sheet of India Tourism Development Corporation Limited, New Delhi as at 31st March, 2009 and also the profit and loss account and the cash flow statement of the Corporation for the year ended on that date annexed thereto, in which are incorporated the accounts of the Head Office and 4 units/branches audited by us and 35 units/ branches audited by respective branch auditors appointed by the Comptroller and Auditor General of India. These financial statements are the responsibility of the Corporations management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

BARAKHAMBA ROAD : 706, AKASHDEEP, 26-A, BARAKHAMBA ROAD, NEW DELHI-110001

TELE; 91(11) 23315110,, 23315119 Fax: 91 (11) 23739216 E-mail: audit@vsnl.com ASAF ALI ROAD : 3/7B, 2nd FLOOR, ASAF AL1 ROAD, NEW DELHI-110002

TELE : 91 (11) 23244061,23244062,23244063 FAX : 91 (11) 23244475 E-mail: knatax@rediffmail.com

3. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the Corporation as we considered appropriate and the information and explanations given during the course of audit and after considering the reports of branch auditors, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) There are Property Tax demands of Rs. 5,733.32 lakhs (Previous Year Rs

5,489.81 Lakhs) from NDMC in respect of certain properties and demand of Rs 436.60 lacs (Previous Year Rs 414.77 Lakhs) from ESI authorities, which are being disputed by the Corporation and not provided for (Refer Note Nos.l (a)(i) &2(b)).

ii) The corporation is due Rs.2,162.55 Lakhs as at 31.03.2009 (Rs 2,120.50 Lakhs upto 31.03.08) from certain subsidiary Companies (which have significant accumulated losses) on account of services rendered and funds advanced to them(including interest thereon). Besides the corporation holds investments in the said subsidiaries having a book value as at 31.03.2009 of Rs. 759.70 lakhs (Previous Year Rs 759.70 Lakhs) . The management has represented to us that these investments are of long term nature and the shortfall/diminution in their value is not permanent and that the intrisic value of assets owned by these companies is considerable to recover the dues and cost of investments, though some of the companies are inoperational and the present net worth of most of these companies is in the negative (Refer Note No. 6 (a)(i),(ii)).

iii) The Corporation has decided to recognize income from subsidiaries/JV companies (most of these have significant accumulated losses) on account of management fees/interest on loans on receipt basis instead of on accrual basis, keeping in view the difficult financial position of these companies. Consequent to this change income for the year and loans and advances have both been understatedby Rs. 146.90 lacs. The manner of recognition of revenue, there being no significant uncertainty, is not in accordance with Accounting Standards- Revenue Recognition, specially when the amounts due/investments made have been considered good by the management. (Refer Note No 6(a) (ii) &12).

iv) (a) Compensation payable to a party, whose premises were under occupation by the Corporations ATT Division, Delhi upto 28.02.2007has not been provided as determination / quantification by the Commissioner appointed for the purpose is pending. [Refer Note no. 2(c)].

(b) Lease Rent / registration fee/ ground rent / depreciation due to non finalization of terms of purchase/lease/title deeds of land and buildings have not been provided for. [Refer Note No. 4]

v) Amount of Rs 1326.12 lakhs (Previous Year Rs 1326.12 lakhs) shown as recoverable from demerged units for the period from 1st April 2001 till the date of physical transfer on account of funds transferred and expenses incurred on behalf of the said units, but not received till date, has been considered good of recovery by the management. .[Refer Note No.8(b)]

vi) Impairment in the value of assets /partly completed assets aggregating to Rs. 206.56 lakhs (Previous Year Rs 206.29 lakhs ) included under capital work in progress has not been provided. [Refer Note No3(b)]

vii) Pending reconciliation / receipt of detailed statement of accounts from NBCQ provision has not been made for interest payable to/recoverable from and amount due from NBCC pertaining to Iraq Project. Effect on the accounts on due receipt /adjustment / accounting thereof cannot be indicated at this stage. [Refer Note No. 6(c) & 7(b)]

viii) Capitlisation effected/charged to expenditure on provisional/payment basis/pending/receipt of final bills / finalisation and certification by architects. Effect on the accounts on due adjustment there of cannot be indicated at this stage. [Refer Note Nos. 4 (e)/4(f)]

ix) Balance in Sundry Debtors, Loans and Advances, Deposits and Sundry Creditors accounts are subject to independent confirmation and reconciliation in some cases. [Refer Note No. 6 (b)]

x) The Corporation had, for the purpose of running of the Duty Free Trade in India, established on 18/09/2007 a Joint Venture Company (JV) in collaboration with M/s Aldeasa of Spain vide agreement dated 10/07/2007. In terms of the JV agreement, the corporation and Aldeasa were to equally contribute funds to the JV towards capital and accordingly the corporation has, being a promoter subscriber, recorded an investment to the extent of Rs. 50,000 (5,000 equity shares ofRs. 10 each) in the joint venture company, though the share certificates remained to be received from the JV company. Besides, the financial statements of the JV Company have not been received from inception till 31.03.2009. The Joint Venture partner has claimed Rs. 684.96 lacs from the Corporation towards reimbursement of expenses incurred by it on the joint venture project which is under verification/acceptance to the claims. In the absence of financial statements and other supporting documentation, corporations share of profit/loss and contribution towards expenses, if any, in connection with the running of the JV could not be ascertained and provided for. Effect on the accounts on due determination and accounting thereof cannot be indicated at this stage. (Refer Note No. 13).

xi) In respect of lease agreements with some of the licensees the corporation has, despite prescribed conditions, not charged interest/levied damages on overdue amounts. These have also not been quantified. Consequently effect on the accounts on due quantification/accounting thereof cannot be indicated at this stage. (Refer Accounting Policy No.l3(v) )

xii) The Corporation has provided for Rs.663.42 lacs as interim relief in respect of C&D category of employees w.e.f. 01.01.2007, pending ascertainment of the final wage settlement payable. However, while working out the liability towards interim pay relief as above, the Corporation had not considered deductions/contributions towards statutory dues namely provident fund/ ESI etc.

Effect on the accounts on due quantification of final wage settlement payable and statutory deductions and provision thereof cannot be indicated at this stage. (Refer Note No.ll(c)(i) ).

5. We further report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit except to the extent referred to in Note No. 6(c) of Schedule 12 regarding status of dues payable / recoverable from a party and Note No. 8(b) of Schedule 12 regarding confirmation of amount recoverable from demerged units;

b) In our opinion proper books of account, as required by law, have been kept so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branch auditors in respect of the units / branches audited by them.

c) The reports of the branch auditors on the accounts of units / branches audited by them have been received and considered by us in preparing this report after making such adjustments as we considered necessary ;

d) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and audited financial statements of the branches.

e) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except to the extent referred to hereunder :-

- Valuation of Inventories at cost in some of the units as against lower of cost or net realizable value - Accounting Standard-2 - Valuation of Inventories.

- Lease charges in respect of land of Hotel Samrat not having been amortised. [Note No. 4 (g)J - Accounting Standard -6 - Depreciation Accounting.

- Conversion of balance with foreign bank in Iraqi dinar at the rate prevailing as on 31s March, 1991 instead of applying year end rates. [Refer Note No. 7(a) J - Accounting Standard-11- Accounting for Effect of Changes in Foreign Exchange Rates

- Non-disclosure of complete details pertaining to transactions entered into during the year with related parties-Accounting Standard-18- Related Party Disclosure.

- Non disclosure of details required in respect of operating leases entered into by the Corporation. [Note No. 14 (v) of Schedule-12] - Accounting Standard-19-Leases.

- Except to the extent referred to in note 14(viii) of Schedule 12, the corporation has not determined impairment in other assets in terms of Accounting Standard-28-Impairment of Assets during the year.

From the available information we are unable to quantify the impact on the financial statements due to non-compliance of The Accounting Standards referred to above.

f) The provisions of clause (g)pf sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Corporation in terms of notification No.G.S.R. 829(E) dated 21st October, 2003 issued by Government of India, Department of Company Affairs;

6. We further report that: -

a) We are unable to comment on the extent of liability that may devolve upon the Corporation and impact the financial statements on resolution, of legal proceedings referred to in Para 4(i) and 4(iv)(a);

b) The adjustments that may arise pertaining to matters referred to in Para 4 (ii),4(iv) (b), 4 (vii), 4(viii),4(ix), 4(x) ,4(xi), 4(xii), which can not be quantified at this stage.

b) The impact of our comments in Para 4(in), 4(v) and ,4(vi), some of which were subject matter of audit qualifications in the earlier years also, is given below:

Impact (net of Reported figure Resultant figure tax) (Rs. In Particulars (Rs in Lacs) figure (Rs. In lacs) A. Reserve & Svirplus

[Refer Paras 4(iii), 4(iv), 18758.66 17,834.76 923.90 4(v) B Capital Work-in-progress

910.62 704.06 206.56

[Refer Para 4(v)] C Current Assets, Loans and Advances

50158.73 48979.51 1179.22

[Refer Paras 4(iii) &

4(iv)]

D Current Liabilities and 25593.30 25131.42 461.88 Provisions (Tax Impact)

7 Subject to our comments in paragraphs 5(e) and 6 above, in our opinion and to the best of our information and according to the explanations given to us, the accounts read with the accounting policies and other notes give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

i) in the case of balance sheet, of the state of affairs of the Corporation as at 31st March, 2009,

ii) in the case of profit & loss account, of the profit for the year ended on that date, and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR ENDED 31st MARCH, 2009.

1. (a) The corporation has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except at few branches / units where records were incomplete in respect of quantitative details and situation etc.

(b) The fixed assets are reported to have been physically verified by the management generally at the year end/reasonable intervals. In most of the branches/units and the head office, the book balance and physical balances have not been reconciled and hence, the discrepancies, if any, have not been ascertained for necessary adjustments in the books of account.

(c) Except for sale of assets of duty free shops at Bangalore during the year on their closure and sales of other assets, in some of the units/ division, which have been classified as not in active use and held for sale and which were not significant taking the assets of the corporation as a whole, the corporation had not disposed off substantial portion of its assets during the year and hence going concern assumption is not affected.

2. (a) The inventory has been physically verified by the management generally once in a year except at few branches / units where verification has been conducted at the end of every half year. Some of the branch auditors have reported that though the I inventory has been physically verified the frequency of verification is inadequate/ not reasonable and needs to be increased in view of the size and nature of the inventory.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the corporation and the nature of its business except at two units ATT Delhi andATSS where the branch auditors have opined the procedures to be not reasonable. Some of the other branch auditors have reported that the procedures of physical verification of inventories need to be strengthened and provision made for evaporation loss / obsolescence for dead stock of stores/ spares/ provisions, crockery & cutlery items and stationery items.

(c) The corporation is generally maintaining proper records of inventory except at few units wherein the branch auditors have reported that proper records of inventory were not maintained. The discrepancies noticed on physical verification between the physical stocks and the book records were not material except at some branches where such discrepancies could not be ascertained in the absence of proper records of inventory. However, since the consumption of these stocks, stores, crockery, cutlery etc. had been worked out by taking opening balance, purchases and closing balance based on physical inventories, the value of shortages etc. has not been ascertained and shown separately. In this connection refer to our comment in para 2(b) above also.

3. The Corporation has neither taken nor granted any loans, secured or unsecured from/to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.Accordingly provisions of clauses 4(iii)(b),(c),(d),(e),(f),and (g) of the said order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Corporation and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods and rendering of services except at some branches wherein the branch auditors have reported, that the evaluation of the prevailing internal control structure and its operation disclosed weak internal control systems and which is not adequate and commensurate with the size of the branch and the nature of its business, with regard to purchase of inventory and recording, purchase of fixed assets, sale of goods and services, deposit of Foreign Currency cash at Duty free shop units income from licenses, maintenance of accounting records, reconciliation of control accounts, extension of credit, issuance of credit notes, purchase and consumption of raw materials, cost of services rendered, stores, stocks, issuance of material, valuation of inventories at DFS units (at Goa), and which need to be improved / strengthened. There has been continuing failure to correct major weaknesses in internal control systems, reported by the internal auditors in the previous year on similar lines, at these branches.

5. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. (b) Not applicable in view of para (a) above.

6. The Corporation has not accepted any deposits from public in terms of Sections 58A and 58AA of the Companies Act,l 956 and the rules made thereunder.

7. In our opinion, the Corporation has an internal audit system which is generally commensurate with the size and nature of its business. However, as reported by some of the branch auditors, the coverage of internal audit needs to be enlarged to cover all areas of operation with on timely submission and follow up of the reports.

8. As informed to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956.

9. (a) In our opinion the Corporation is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax,Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it except as reported by some of the branch auditors regarding irregularity in deposit / non-deposit of undisputed statutory dues.

According to the information and explanations given to us and as reported by the branch auditors in their reports, the undisputed amounts payable in respect of outstanding statutory dues that were in arrears, as on 31.03.2009 for a period of more than six months from the date they became payable are given below :

Name of the Statute, Unit Nature of dues Amount Period to which the (in lacs) amount relates

ESI, Vigyan Bhawan, ESI 4.79 More than six months

Hyderabad House 1.72

Janpath 25.84

Ashoka 117.79

Samrat 49.77

IGIAR 1.02

Sales Tax & VAT, ATT Chennai Sales Tax, VAT 1.25 More than six months

Expenditure Tax, Patliputra Ashok, Expenditure Tax 2.32 More than six months Kalinga

(b) According to the information & explanations given to us and as reported by the branch auditors in their reports, dues of Provident Fund, Investor Education and Protection Fund, Employees State Insurance , Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited on account of disputes are given below :

Name of the Nature of dues Amount Period to Forum where Statue (in lacs) which the dispute is Pending amount relates

The Delhi Sales Local Sales 6196.17 1990 to 2005 Various Authorities tax Act, 1975 Tax

The Central Central Sales 12.84 1987 to 2002 Various Authorities Sales Tax Act, Tax

1956¦

Andhra Pradesh Local Sales 327.15 2005 to 2007 Hyderabad High VAT Act, 2005 Tax Court

Karnataka Sales Local Sales 420.71 2004-2005 Karnataka High Tax Act, 2004 Tax Court

Orissa Sales Tax Sales Tax 0.72 1988 to 2005 Various Authorities act

Maharashtra Sales Tax2465.37 1982 to 1996 Mumbai High Sales Tax Act Court, Maharashtra

Sales Tax Tribunal The DelhT Tax Luxury Tax 266.88 1997-987 Assistant on Luxuries Act, 2001-02 & Commissioner of 1996 2002-03 Luxury Tax The Maharashtra Luxury Tax 19.90 1993-1995 Maharashtra Sales Luxury Tax Act Tax Tribunal

The Income Tax Income Tax 363.21 1992-93, Income Tax Act, 1961 1994-95, Appellate Tribunal 1995-96; Property Tax Property Tax 5733.32 1987-88 Delhi High Court Act onwards

Customs Act, Custom Duty 21825.66 1995 to 2008 Commissioner 1962 Mumbai (Appeals)

Customs Act, Custom Duty 2.14 2006-07 Committee on 1962 Hyderabad Disputes Provident Fund (PF) 43.31 1982-83 High Court onwards ServiceTax, Service Tax 11.18 2007-08 & CESTAT, Delhi IGIAR 2008-09

Customs Custom Duty 45.17 2003 Committee on Authority by Disputes Kolkata

Customs Custom Duty 8.84 2005-06 Customs Authority Authority, Delhi

Excise Duty, Excise Duty 13.33 2002-03 HighCourt Orissa Kalinga

Employees State ESI Insurance Janpath 27.91 High Court of Ashok 368.49 Earlier Years Delhi Samrat 21.91 IGIAR 11.04 TajRestt 7.25

10. Even after considering the effects of quantified qualifications, in our opinion, the Corporation does not have any losses / accumulated losses. The Corporation has not incurred cash loss during the financial year covered by our audit or in the immediately preceding financial year. However, the effect of resolution and quantification of matters reported / of unqualified qualifications and others reported in the main Audit Report, which may in some cases be significant, have not been taken into consideration, as the amounts are not ascertainable.

11. Based on our audit procedures and as per the information and explanations given to us by the management, the Corporation has no dues towards banks, financial institutions or debenture holders, and, hence, provisions of clause 4(xi) of the Order are not applicable to the corporation.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Corporation has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Corporation is not a chit fund or a nidhi mutual benefit fund / society.

14. According to the information and explanations given to us, the Corporation is not dealing in shares, securities and other investments. The investments in the shares of subsidiary companies are held by the Corporation in its own name and are not traded.

15. Except for a guarantee of Rs. 90 lacs provided against loans obtained by a subsidiary company in the earlier year, and which is continuing, the Corporation has not given guarantees during the year for loans taken by others from banks or financial institutions. Further, the terms and conditions on which the corporation had given guarantees during earlier years for loans taken by others from bank or financial institutions are not prima facie prejudicial to the interest of the Corporation.

16. Based on information and explanations given to us by the management, no term loans have been raised by the corporation during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Corporation, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Corporation has not made any allotment of shares during the year under audit, hence this clause is not applicable to the corporation.

19. The Corporation has not issued any debentures, hence this clause is not applicable to the Corporation.

20. The Corporation has not raised money by public issues during the year under audit, hence this clause is not applicable to the Corporation.

21. During the course of our examination of the books and records of the corporation, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the corporation, noticed or reported during the year, nor have we been informed of such case by the management.



For Khanna & Annadhanam Chartered Accountants (K.A.Balasubramanian) Place: New Delhi Partner Date: 8.12.2009 M.No. 17415

 
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