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Directors Report of India Tourism Development Corporation Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the 50th Annual Report together with the audited accounts of the Corporation for the year ended 31st March, 2015.

Your Corporation has achieved a total turnover of Rs. 504.19 crore during the financial year 2014-15 as against Rs. 469.58 crore in the previous year 2013-14 indicating an overall increase by 7.37%. The increase in overall turnover has been achieved in all the commercial divisions except ATT Division. During the financial year 2014-15, the Corporation has recorded a Net Profit (before tax) of Rs. 38.95 crore as against Net Profit (before tax) of Rs. 11.93 crore in previous year 2013-14.

Performance Highlights

The highlights of the financial results of the Corporation (Standalone) are given below:

(Rs. in crore)

Particulars 2014-15 2013-14

Turnover 504.19 469.58

Operating Profit/(Loss) 51.68 21.76

Less: Depreciation 10.26 5.96

Less : Finance Cost 0.20 -

Less: Prior period adjustments & Extra ordinary items 2.27 3.87

Profit/(Loss) before Tax 38.95 11.93

Add: Deferred Tax 4.42 1.00

Less: Provision for Income Tax 9.50 3.50

Less:- Provision for Wealth Tax 0.01 0.01

Add: Provision for Income Tax for earlier years written back 0.51 -

Profit/(Loss) after Tax 34.37 9.42

Amount available for appropriation 34.37 9.42

Proposed Dividend 17.15 4.29

Dividend Tax 3.49 0.73

Equity Capital 85.77 85.77

Capital Employed 279.77 276.23

Rate of Return on Capital :-

Before Tax 45.41% 13.91%

After Tax 40.07% 10.98%

Rate of Return on Capital Employed:-

Before Tax 13.92% 4.32%

After Tax 12.29% 3.41%

Operating Ratio

The Operating Ratio has decreased by 5.62% in the current year with the overall operating ratio of 89.75% as against 95.37% in the previous year 2013-14.

Division wise Financial Performance

The Division wise financial performance of the Corporation is summarized as under :–

(i) Hotels Division has achieved turnover of Rs. 283.90 crore during the year as against Rs. 262.88 crore in the previous year indicating increase by 8% and earned the net profit of Rs. 10.81 crore as against the net loss of Rs. 4.58 crore in the previous year.

(ii) The turnover of Ashok International Trade (AIT) Division has increased to Rs. 10.96 crore from Rs. 9.40 crore in the previous year. The AIT Division has earned Net Profit of Rs. 0.84 crore as compared to net loss of Rs. 1.59 crore.

(iii) The turnover of Ashok Travels & Tours Division has slightly decreased to Rs. 119.70 crore from Rs. 123.08 crore in the previous year. The ATT Division has earned a Profit of Rs. 0.75 crore as against the net loss of Rs. 1.98 crore in the previous year.

(iv) The turnover of Ashok Tourist Service Station has decreased to Rs. 11.73 crore from Rs. 12.96 crore in the previous year. The ATSS has suffered a net loss of Rs. 0.31 crore as against the net loss of Rs. 0.28 crore in the previous year. The unit had been constantly making losses in the past. Pursuant to decision of the ITDC Board in the meeting held on 20th October, 2014 the ATSS has been closed w.e.f 17-02-2015.

(v) The turnover of the Ashok Creative Division (including SEL Red Fort) has been recorded at Rs. 12.34 crore (previous year Rs. 7.89 crore) and has suffered a loss of Rs. 0.43 crore as against net loss of Rs. 1.57 crore.

(vi) The Engineering Division has achieved a turnover of Rs. 8.09 crore during the year 2014-15 (previous year Rs. 6.91 crore) with net loss of Rs. 5.34 crore as against net loss of Rs. 6.84 crore in the last financial year.

(vii) The turnover of Ashok Events Division has increased to Rs. 11.51 crore (previous year Rs. 10.99 crore) with net profit of Rs. 2.11 crore as against profit of Rs. 0.66 crore in the previous year.

(viii) The Ashok Institute of Hospitality and Tourism Management (AIH&TM) has achieved turnover of Rs. 18.23 crore as against Rs. 8.71 crore in the previous year with net profit of Rs. 2.79 crore (previous year net profit of Rs. 1.35 crore).

(ix) The Corporate Head Quarter being the administrative office has earned an income of Rs. 27.72 crore (previous year Rs. 26.76 crore) mainly consisting of income from Interest on short term deposits with banks from the surplus funds available with it.

Capital Structure

There is no change in authorized and paid-up share capital of the Corporation. The Authorized Share Capital of the Corporation is Rs. 150 crore and the paid-up Share Capital is Rs. 85.77 crore as on 31st March, 2015.

Dividend

The Board of Directors recommended a dividend of 20% for the financial year 2014-15 on the equity share capital of the company.

Transfer to Reserve

An amount of Rs. 14 crore has been transferred to the General Reserves.

Rating of ITDC vis-à-vis MoU targets

Performance of the Company for the year 2013-14 has been notified as 'Good' with Composite Score 3.466 by Department of Public Enterprises (DPE) in terms of the MoU signed with the Government of India.

Management Discussion and Analysis

The report on the Management Discussion and Analysis is placed at Annexure-I.

Plan Schemes

The Revised Capital Budget Estimates towards capital expenditure for 2014-15 was Rs. 26.15 crore which included Rs. 23.83 crore for renovation/improvement on existing hotels, catering units and other divisions. The capital expenditure during 2014-15 was Rs. 11.54 crore out of which Rs. 4.77 crore was capitalized and Rs. 6.77 crore was charged to revenue.

The Plan outlay for the year 2015-16 is Rs. 45.64 crore out of which Rs. 42.47 crore relates to renovation/improvement in existing hotels, catering units, other divisions.

Procurement from MSME

During the financial year 2014-15, total procurement from MSME was Rs. 23 lakh approx.

Implementation of Official Language Policy

During the year 2014-15, the Company continued its efforts to give impetus to the use of Hindi in official work through motivation and training. Cash incentives were granted to employees on doing prescribed quantum of work in Hindi. Hindi workshops were organized to provide practical training of noting-drafting and other works in Hindi. Various Hindi competitions were also organized during Hindi Fortnight celebrations for giving impetus to the use of official language in day to day work. Hindi Kavigoshthi, Hindi Natya Manchan and Hindi Prize Distribution Event were also organized to encourage official language in the Corporation.

Conservation of Energy & Technology Absorption

Commitment towards energy conservation remains in the units at various stages of operations. Commercial considerations, energy conservation policies and practices play a vital role in the endeavours made in this direction.

Since your Company's operations do not involve technology absorption, the particulars as per Rule 8(3)(B) of the Companies (Accounts)

Rules 2014 regarding technology absorption, are not applicable.

Foreign Exchange Earnings & Outgo

The Direct Foreign Exchange Earnings during the year 2014-15 has decreased to Rs. 12.99 crore as against Rs. 15.87 crore in the previous year.

Subsidiary Companies

The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel Corporation Ltd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel Corporation Ltd (vi) Utkal Ashok Hotel Corporation Ltd, (vii) Punjab Ashok Hotel Company Ltd. The Hotel Units were set up under the aforesaid subsidiary companies at Itanagar, Guwahati, Bhopal, Puducherry and Ranchi respectively. The operation of Hotel unit at Puri is closed since March, 2004 and the Hotel has been planned to be leased out. The Hotel project at Anandpur Sahib is incomplete. Besides, the Corporation has one Associate Company i.e. ITDC Aldeasa India Private Limited.

The Annual Accounts of all the subsidiary companies have been audited and finalized and the Consolidated Annual Accounts have been prepared and presented in this Annual Report. A statement containing the salient features of the subsidiaries in the prescribed format AOC-1 forms part of the Consolidated Annual Accounts 2014-15.

Vigil Mechanism and Whistle Blower Policy

The Corporation has a Whistle Blower Policy which is posted on the website http:// www.theashokgroup.com/Aboutus/rti. Being a Central Public Sector Enterprise, the Corporation has a Vigilance Department. Chief Vigilance Officer, the Head of the Vigilance Division, is under the direct control of the Central Vigilance Commission (CVC), an independent Govt. Agency.

Board of Directors

During the year, eight Board meetings were held to transact the business of the Company.

During the year under review, Dr. Sameer Sharma (from 12.05.2014 to 09.12.2014) was appointed as Managing Director. Shri Girish Shankar, Govt. Nominee Director & Additional Secretary (Tourism) was given the additional charge of the Managing Director from 23.04.2013 to 11.05.2014 and the charge of the Chairman & Managing Director from 10.12.2014 to 23.04.2015.

During the year under review, Dr. Sameer Sharma and Cmde (Retd.) R. K. Okhandiar ceased to be on the Board of Directors. Sh. Trinath Behera, Director (Finance) and Chief Financial Officer tendered three months notice of Resignation on 30th March, 2015. His resignation was accepted by the President of India, Ministry of Tourism vide letter dated 30th June, 2015 and accordingly he was relieved from the services of ITDC on 30th June, 2015. The Board appreciated the valuable services rendered by them during their tenure. The present composition of the Board is as under:

i) Shri Umang Narula, Chairman & Managing Director w.e.f. 24.04.2015

ii) Shri Piyush Tiwari, Director (C&M) w.e.f. 28.05.2015

iii) Dr. (Ms.) T. Kumar, Govt. Nominee Director w.e.f. 04.09.2013

iv) Shri Girish Shankar, Govt. Nominee Director w.e.f. 24.04.2015

v) Shri Anugolu Venkata Ratnam, Independent Director w.e.f. 07.10.2013

vi) Dr. Usha Kiran Rai, Independent Director w.e.f. 10.12.2013

Pursuant to Article 61 of the Article of Association, Shri Girish Shankar, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment. Details of profle etc. as required under Clause 49 of the Listing Agreement in respect of Director liable to retire by rotation and seeking re-appointment and the Directors to be regularized in the ensuing AGM, has been given along with the Notice of AGM.

Training Policy and the training imparted to the directors

The Corporation has formulated a training policy for Board Members. As per the policy, ITDC offers training programmes organized by SCOPE and DPE to the Board Members. Further, on induction of non-official Directors, ITDC may also arrange training on the role and responsibilities of Directors from the professional institutes like ICAI, ICSI, ICMA, IIM etc.

During the financial year 2014-15, Non-official Directors attended a half-day workshop for Capacity Building of non-official directors of CPSEs with the Institute of Chartered Accountants of India (ICAI) as the knowledge partner organized by the Department of Public Enterprises (DPE).

Declaration by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Evaluation

The evaluation of the Board as a whole and the Independent Directors was conducted on the basis of criteria and framework laid down by the Nomination & Remuneration Committee of the Board. Based on the evaluation criteria laid down by the Committee, the performance evaluation of the Board was measured in six areas. The performance evaluation of the Independent Directors was measured also in six areas based on questionnaire designed on a scale of 1 to 5. Independent Directors evaluated the performance of the non-independent directors in a separate meeting of the Independent Directors.

None of the independent directors are due for re-appointment.

Particulars of loans, guarantee or investments

During the year under review, ITDC has given a loan of Rs. 7,32,320/- at a rate of interest of 12.5% per annum to M/s Utkal Ashok Corporation Ltd., a joint venture subsidiary of ITDC for meeting out statutory obligations and day-to-day expenditures.

Corporate Governance

As per the requirement of Clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is given in Annexure-II which forms part of this Report.

(i) CEO/CFO Certificate [as per Clause 49(ix)]; and

(ii) Certificate from the Company's Auditors [as per Clause 49 (xi)] along with the management reply to observations.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed :- - That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed read along with proper explanation relating to departures;

- That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

- That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- That the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a 'going concern' basis;

- That the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

- That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Financial Controls

The Corporation has adequate internal control system commensurate to its nature of business. Board has laid down adequate policies and procedures such as Licensing Procedure, Purchase Procedures, Engineering & Works Manual, Delegation of Powers etc. for ensuring the orderly and efficient conduct of business.

Professional services of Chartered Accountant Firms are availed to conduct Internal Audit of all units/verticals of ITDC. A detailed Internal Audit manual duly approved by the Board of Directors has been circulated to all the units.

Internal Auditors monitor and evaluate the efficacy and adequacy of the internal checks & control systems. Quarterly Internal Audit Reports are submitted by Internal Auditors. Corrective actions, wherever required, are taken by the units/verticals. Significant observations, if any, are reported to the Audit Committee.

Related Party Transactions

There are no materially significant related party transactions reportable under Section 188 of the Companies Act, 2013. The Audit Committee and the Board has approved a policy on materiality of the related party transactions which is posted on the website of the company http://www.theashokgroup.com/Aboutus/ Investor corner.

Report under Section 22 of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013

There are no cases to be reported under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Corporate Social Responsibility and Sustainable Development

The CSR activity undertaken during the financial year 2014-15 was "Clean India", a pilot project at Qutab Minar under the patronage of the Ministry of Tourism and the construction of Toilet Blocks in the remote village area of Jharkhand State.

Under "Clean India", ITDC has been entrusted with cleanliness and maintenance of Qutab Minar.

ITDC constructed three toilets as under:

1. Balika Vidyalaya, Sindori Village, Daltanganj, Jharkhand

2. Balika Vidyalaya, Pubiidia Village, Jharkhand

3. Balika Vidyalaya, Kuchchu Village, Hundru, Angara Block, Jharkhand

The construction of the above said toilet blocks was in progress as on 31.03.2015.

The Annual Report on CSR Activities and the Report on the Sustainable Development Activities are annexed as Annexure III Section A and Section B respectively.

Risk Management Policy and its implementation

ITDC Board in its meeting held on 11th May, 2010 has laid down the Risk Management Policy laying down a sound process for identification and mitigation of risks. In accordance with the policy, the unit head of all strategic divisions have been nominated as Risk Manager and a committee namely Risk Management Compliance Committee (RMCC) presently headed by Director (C&M) has been constituted to oversee and ensure compliances with the Risk Management Policy of the Corporation.

Company's specific risks as per the reports submitted by different units/divisions of ITDC are as under :

Economic Risk : Dependence on one client

Industrial Risk : Threat to market share

Personnel Risk : Non-availability of adequate skill sets

Political Risk : Threat to property safety

Legal Risk : Contractual Risk & tax risk

Auditors and Auditor's Report

The Comptroller & Auditor General of India have appointed M/s V. K. Verma & Company, Chartered Accountants as Statutory Auditors of the Company and also various Branch Auditors for the year 2014-15 under Section 619(2) of the Companies Act, 1956/134(5) of the Companies Act, 2013. The Management's replies to the comments and observations of the Statutory Auditors on the accounts ( Standalone and the Consolidated) for the year 2014-15 are given in Annexure- IV,V & VI.

Secretarial Auditor and Secretarial Audit Report

ITDC Board in its meeting held on 20th October, 2014 has appointed M/s P.C. Jain & Co., Company Secretaries as the Secretarial Auditors for conducting the Secretarial Audit as required under Section 204 of the Companies Act, 2013. The Secretarial Audit Report is placed at Annexure-VII and Management replies to the comments and observation of the Secretarial Auditors on the Secretarial Audit Report for the year 2014-15 are given at Annexure-VIII.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure-IX to the Board's Report.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future.

Comments of the Comptroller and Auditor General of India

The comments of the Comptroller & Auditor General of India, under Section 134(6) of the Companies Act, 2013 on the Accounts of the Company for the financial year ended 31st March, 2015 are set out elsewhere in the Annual Report.

Material changes and commitments affecting the financial position of the Company between the end of the Financial year and the date of the Report

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report.

Acknowledgement

i. The Board places on records its sincere appreciation towards the Company's customers/clients for the support and confidence reposed by them in the organization and look forward to the continuance of this relationship in future.

ii. The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particularly the Ministry of Tourism, in Company's operations and developmental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co-operation, put the Company on the path of progress.

For and on behalf of Board of Directors

sd/-

Date: 14.08.2015 (Umang Narula)

Place: New Delhi Chairman & Managing Director


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 49th Annual Report together with the audited accounts of the Corporation for the year ended 31st March 2014.

Your Corporation has achieved a total turnover of Rs. 469.58 crore during the financial year 2013-14 as against Rs. 440.64 crore in the previous year 2012-13 indicating an overall increase by 6.57%. The increase in overall turnover has been achieved in all the commercial divisions except Hotel LMPH, Janpath, Jammu, Patna & AITD and Ashok Events Division. During the financial year 2013-14, the Corporation has recorded a Net Profit (before tax) of Rs. 11.93 crore as against net profit before tax of Rs. 5.48 crore in previous year 2012-13.

Performance Highlights

The highlights of the financial results of the corporation (Stand alone) are given below :-

(Rs. in crore) Particulars 2013-14 2012-13

Turnover 469.58 440.64

Operating Profit/(Loss) 21.73 13.73

Less: Depreciation 5.96 5.89

Add/(Less) Prior period adjustments & (-) 3.84 (-)2.36 Extra ordinary items

Profit before Tax 11.93 5.48

Add/(less): Deferred Tax 1.00 (-)0.59

Less: Provision for Income Tax -3.50 2.20

Less:- Provision for Wealth Tax -0.01 0.01

Add/(Less): Provision for Income Tax - 0.32 for earlier years written back

Profit after Tax 9.42 3.00

Amount available for appropriation 9.42 3.00

Proposed Dividend 4.29 0.00

Dividend Tax 0.73 0.00

Equity Capital 85.77 85.77

Capital Employed 278.98 277.25

Rate of Return on Capital :- Before Tax 13.91% 6.38%

After Tax 10.98% 3.5%

Rate of Return on Capital Employed

Before Tax 4.28% 1.98%

After Tax 3.38% 1.08%

Operating Ratio

The Operating Ratio has decreased by 1.51% in the current year with the overall operating ratio of 95.37% as against 96.88% in the previous year 2012-13.

Division wise financial performance

The Division wise financial performance of the Corporation is summarized as under:- Hotel Division has achieved turnover of Rs.262.88 crore during the year 2013-14 as against Rs. 250.59 crore in the previous year 2012-13 indicating increase by 4.90% and incurred the net loss of Rs.4.58 crore as against the net loss of Rs. 4.81 crore in the previous year .

(ii) The turnover of Ashok International Trade Division (A.I.T.Division) has decreased to Rs. 9.40 crore from Rs. 11.35 Crore in the previous year. During the year 2013-14, there are 7 duty free shops in operation i.e. at Goa, Goa Seaport, Coimbatore, Haldia Port, Kolkata Port, Chennai Port and Mangalore Port. During the year 2013-14, the AIT Division has incurred a Net Loss of Rs. 1.58 crore as compared to net loss Rs. 3.96 crore in the previous year.

(iii) Further, the turnover of Ashok Travels & Tours (ATT) Division has increased to Rs. 123.08 crore from Rs. 106.61 crore in the previous year registering an increase by 15.44%. The ATT Division has incurred a net loss of Rs. 1.78 crore as against the net loss of Rs. 1.99 crore in the previous year.

(iv) The turnover of Ashok Tourist Service Station (ATSS) has increased to Rs.12.96 crore from Rs. 10.45 crore in the previous year registering a increase by 24.02%. The ATSS has suffered a net loss of Rs. 0.49 crore as against the net loss of Rs. 0.17 crore in the previous year.

(v) The turnover of the Ashok Creative Division (including SEL Red Fort) has been recorded at Rs.7.89 crore (previous year Rs. 6.92 crore) and has incurred a loss of Rs. 1.57 crore as against net loss of Rs. 1.51 crore in the previous year 2012-13.

(vi) The Engineering Division has achieved a turnover of Rs. 6.91 crore during the year 2013-14 (previous year Rs. 4.57 crore) with net loss of Rs. 6.83 crore as against net loss of Rs.11.06 crore in the previous financial year 2012-13.

(vii) The turnover of Ashok Events division has decreased to Rs. 10.98 crore (previous year Rs. 17.06 crore) with net profit of Rs. 0.66 crore as against net profit of Rs. 2.94 crore in the previous year.

(viii) The Ashok Institute of Hospitality and Tourism Management (AIH&TM) has achieved turnover of Rs. 8.71 crore as against Rs. 7.76 crore in the Previous year with net profit of Rs. 1.35 crore (previous year net profit of Rs. 0.72 crore) .

(ix) The Corporate HQ. being the administrative office has earned an income of Rs. 26.76 crore (previous year Rs. 25.34 crore) mainly consisting of income from Interest on short term deposits with banks from the surplus funds available with it.

2 Capital Structure

There is no change in authorized and paid up capital of the Corporation. The Authorized Capital of the Corporation is Rs.150 crore and the paid up Share Capital of the Company is Rs.85.77 crore as on 31st March, 2014.

3 Dividend

The Board of Directors recommended a dividend of 5% on the equity share capital of the company.

4 Rating of ITDC vis-à-vis MOU targets

Performance of the Company for the year 2012-13 has been notified as ''Fair'' with Composite Score 3.844 by Department of Public Enterprises (DPE) in terms of the MOU signed with the Government of India.

5 Management Discussion and Analysis

The report on the Management Discussion and Analysis is placed at Annexure-I.

6 Plan Schemes

The Revised Capital Budget Estimates towards capital expenditure for 2013-14 was Rs.26.37 crore which included Rs.25.17 crore for renovation/improvement on existing hotels, catering units and other divisions. The capital expenditure during 2013-14 was Rs.1.47 crore out of which Rs. 0.75 crore was capitalized and Rs.0.72 crore was charged to revenue.

The Plan outlay for the year 2014-15 is Rs.71.12 crore out of which Rs.69.17 crore relates to renovation/improvement in existing hotels, catering units, other divisions.

7. Procurement from MSME

As per reports received from the different Hotel Units, Procurement from MSME is Rs.13.56 lac during the financial year 2013-14.

8 Implementation of official language policy

During the year 2013-14, the Company continued its efforts to give impetus to the use of Hindi in official work through motivation and training. Cash incentives were granted to them on doing prescribed quantum of work in Hindi. Hindi workshops were organized to provide practical training of noting-drafting and other works in Hindi. Various Hindi competitions were also organized during Hindi Fortnight celebrations for giving impetus to the use of official language in day to day work. Hindi Kavigoshthi, Hindi Natya Manchan and Hindi Prize Distribution Event were also organized to encourage official language in the Corporation.

9 Particulars of Employees

None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules 1975.

10 Conservation of Energy & Technology Absorption

Commitment towards energy conservation remains in the units at various stages of operations. Commercial considerations, energy conservation policies and practices play a vital role in the endeavors made in this direction.

ii. Since your Company''s operations do not involve technology absorption, the particulars as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 regarding technology absorption, are not applicable.

11 Foreign Exchange Earnings & Outgo

i. The Direct Foreign Exchange Earnings during the year 2013-14 has decreased to Rs.15.87 crore as against Rs.19.72 crore in the previous year.

12 Subsidiary Companies

The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel Corporation Ltd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel Corporation Limited. (vi) Utkal Ashok Hotel Corporation Ltd, (vii) Punjab Ashok Hotel Company Ltd. The Hotel Units were set up under the aforesaid subsidiary companies at Itanagar, Guwuhati, Bhopal, Puducherry and Ranchi respectively. The operation of Hotel unit at Puri is closed since March, 2004 and the Hotel has been planned to be leased out. The Hotel project at Anandpur Sahib is incomplete. The Annual Accounts of all the subsidiary companies have been audited and finalized and the Consolidated Annual Accounts pursuant to clause 32 of the Listing Agreement has been prepared and presented in this Annual Report.

13 Exemption under section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs vide its General Circular No: 2/2011 has granted exemption for attaching the Balance Sheet of Subsidiary Companies with the Parent/Holding Company under Section 212(8) of the Companies Act, 1956 provided certain conditions are fulfilled. In terms of the said circular, a statement containing brief financial details of the Company''s subsidiaries for the year ended March 31, 2014 is enclosed as Annexure VI of this report. In terms of aforesaid circular it is affirmed that annual report of the subsidiary companies and the related detailed information shall be made available to shareholders of the ITDC and subsidiary companies as and when required. It is further affirmed that annual accounts of the subsidiary companies shall also be made available for inspection by any shareholders in the head office of the ITDC and of the subsidiary companies concerned. The shareholders, if they desire, may write to the company to obtain a copy of financials of the subsidiary companies.

14 Board of Directors

i. During the year, seven Board meetings were held to transact the business of the Company.

ii. During the year under review, Shri Trinath Behera (w.e.f. 26.04.2013) was appointed as Director (Finance) , Dr. (Ms.) T. Kumar, AS&FA-Tourism (w.e.f. 4.9.2013) was appointed as Govt. Nominee Director, Shri Anagolu Venkata Ratnam (w.e.f. 7.10.2013) and Prof. Usha Kiran Rai (w.e.f. 10.12.2013) were appointed as independent directors pursuant to Article 61 of the Articles of Association of the Corporation. Further Shri Girish Shankar, Govt. Nominee Director & Additional Secretary (Tourism) was given the additional charge of the Managing Director w.e.f. 23.04.2013.

iii. During the year under review, Dr. Lalit K. Panwar (w.e.f. 23.04.2013) and Shri J. S. Mathur (w.e.f. 4.9.2013) ceased to be on the Board of Directors. The Board appreciated the valuable services rendered by them during their tenure. The present composition of the Board is as under:

i) Dr. Sameer Sharma, Managing Director w.e.f. 12.05.2014

ii) Cmde (Retd.) R. K. Okhandiar, Director (C&M) w.e.f. 10.07.2012

iii) Shri Trinath Behera, Director (Finance) w.e.f. 26.04.2013

iv) Dr. (Ms.) T. Kumar, Govt. Nominee Director w.e.f. 4.9.2013

v) Shri Girish Shankar, Govt. Nominee Director w.e.f. 06.09.2012

vi) Shri Anagolu Venkata Ratnam, Independent Director w.e.f. 07.10.2013

vii) Prof. Usha Kiran Rai, Independent Director w.e.f. 10.12.2013

iv. Pursuant to Article 61 of the Article of Association, Cmde (Retd.) Shri Trinath Behera, Director (Finance) and Dr. (Ms.) T. Kumar retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment. Details of profile etc. as required under clause 49 of the Listing Agreement in respect of Directors liable to retire by rotation and seeking re-appointment has given along with the Notice of AGM.

15 Corporate Governance

As per the requirement of clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is given in Annexure-II which forms part of this Report.

(i) CEO/CFO Certificate [as per clause 49(v) ]; and

(ii) Certificate from the Company''s Auditors [as per clause 49 (vii)] along with the management reply to qualifications .

16 Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act 1956, it is hereby confirmed: -

-that in the preparation of the accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed read along with proper explanation relating to departures;

- that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

- that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the Directors have prepared the accounts for the financial year ended 31st March 2014 on a ''going concern'' basis.

17 Auditors and Auditor''s Report

The Comptroller & Auditor General of India have appointed M/s V. K. Verma & Company, Chartered Accountants as Statutory Auditors of the Company and also various Branch Auditors for the year 2013-14 under Section 619(2) of the Companies Act, 1956. The Management''s replies to the comments and observations of the Statutory Auditors on the accounts ( Standalone and the Consolidated) for the year 2013-14 are given in Annexure- III, IV & V.

18 Comments of the Comptroller and Auditor General of India

The Accounts for the financial year ended 31st March, 2014 were sent for review by the Comptroller and Auditor General (CAG) of India. Their comments and reply of the Management are awaited and shall be sent as soon as these are received.

19 Acknowledgement

i. The Board places on records its sincere appreciation towards the Company''s customers/clients for the support and confidence reposed by them in the organization and look forward to the continuance of this relationship in future.

ii. The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particul -arly the Ministry of Tourism, in Company''s operations and develop -mental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co- operation, put the Company on the path of progress.

For and on behalf of Board of Directors

Sd/- Sd/-

Date : 03.09.2014 Trinath Behera (Dr. Sameer Sharma) Place : New Delhi Director (Finance) Managing Director


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 48th Annual Report together with the audited accounts of the Corporation for the year ended 31st March, 2013.

Your Corporation has achieved a total turnover of Rs. 440.64 crore during the fnancial year 2012-13 as against Rs. 423.06 crore in the previous year 2011-12 indicating an overall increase by 4.15%. The increase in overall turnover has been achieved in all the commercial divisions except Hotel Ashok and Engineering Division. During the fnancial year 2012-13, the Corporation has recorded a Net Proft (before tax) of Rs. 5.48 crore as against Net Proft of Rs. 22.02 crore in previous year 2011-12.

Performance Highlights

The highlights of the fnancial results of the Corporation (Standalone) are given below:

(Rs. in crore) Particulars 2012-13 2011-12

Turnover 440.64 423.06

Operating Proft/(Loss) 13.73 28.20

Less: Depreciation 5.89 5.53

Add/(Less) Prior period adjustments & extra- ordinary items (-)2.36 (-)0.65

Proft before Tax 5.48 22.02

Add/(less): Deferred Tax (-)0.59 (-)7.47

Less: Provision for Income Tax 2.20 6.00

Less: Provision for Wealth Tax 0.01 0.01

Add/(Less): Provision for Income Tax for earlier years written back 0.32 0.00

Proft after Tax 3.00 8.54

Amount available for appropriation 3.00 8.54

Proposed Dividend - 4.29

Dividend Tax - 0.70

Equity Capital 85.77 85.77

Capital Employed 277.25 271.91

Rate of Return on Capital:

Before Tax 6.38% 25.67%

After Tax 3.5% 9.96%

Rate of Return on Capital Employed:

Before Tax 1.98% 8.09%

After Tax 1.08% 3.14%

Operating Ratio

The Operating Ratio has increased by 3.55% in the current year with the overall operating ratio of 96.88% as against 93.33% in the previous year 2011-12.

Division wise Financial Performance

The Division wise fnancial performance of the Corporation is summarized as under:-

Hotels Division has achieved turnover of Rs. 250.59 crore during the year 2012-13 as againstRs. 257.70 crore in the previous year 2011-12 indicating decrease by 2.84% and incurred the net loss of Rs. 4.81 crore as against the net proft of Rs. 10.61 crore in the previous year mainly due to provision for property tax dues determined on assessment of Delhi based 3 hotel properties and increase in expenditure on power & fuel etc.

The turnover of Ashok International Trade Division (AIT Division) has increased to Rs. 11.35 crore from Rs. 9.18 Crore in the previous year. During the year 2012-13, there were 7 duty free shops in operation at Goa, Goa Seaport, Coimbatore, Haldia Port, Kolkata Port, Chennai Port and Mangalore Port. During the year 2012-13, the AIT Division has incurred a net loss of Rs. 3.96 crore as compared to a net loss of Rs. 2.49 crore in the previous year mainly due to high rent cost.

The turnover of Ashok Travels & Tours (ATT) Division has increased to Rs. 106.61 crore from Rs. 92.04 crore in the previous year registering an increase by 15.83%. The ATT Division has incurred a net loss of Rs. 1.99 crore as against the net proft of Rs. 0.07 crore in the previous year.

The turnover of Ashok Tourist Service Station (ATSS) has increased to Rs. 10.45 crore from Rs. 10.37 crore in the previous year registering a marginal increase by 0.77%. The ATSS has suffered a net loss of Rs. 0.17 crore as against the net loss of Rs. 0.20 crore in the previous year.

The turnover of the Ashok Creative Division (including SEL Red Fort) has been recorded at Rs. 6.92 crore (previous year Rs. 5.05 crore) and has incurred a loss of Rs. 1.51 crore as against net loss of Rs. 1.03 crore in the previous year 2011-12.

The Engineering Division has achieved a turnover of Rs. 4.57 crore during the year 2012-13 (previous year Rs. 5.73 crore) with net loss of Rs. 11.06 crore as against net loss of Rs. 8.11 crore in the previous fnancial year 2011-12 mainly due to provision of Rs. 5.77 crore as litigation loss on fnal resolution of the matter under litigation.

The turnover of Ashok Events Division has increased to Rs. 17.06 crore (previous year Rs. 13.98 crore) with net proft of Rs. 2.94 crore as against loss of Rs. 1.57 crore in the previous year.

The Ashok Institute of Hospitality and Tourism Management (AIH&TM) has achieved a turnover of Rs. 7.76 crore as against Rs. 4.80 crore in the previous year with net proft of Rs. 0.72 crore (previous year net proft of Rs. 0.53 crore).

The Corporate Headquarters, being the administrative offce, has earned an income of Rs. 25.34 crore (previous year Rs. 24.22 crore) mainly consisting of income from interest on short term deposits with banks from the surplus funds available with it.

Capital Structure

There is no change in authorized and paid- up capital of the Corporation. The Authorized Capital of the Corporation is Rs. 150 crore and the paid-up Share Capital of the Company is Rs. 85.77 crore as on 31st March, 2013.

Dividend

Since the Corporation has not earned adequate proft during the year 2012-13, no dividend for the year is proposed to be recommended by the Board.

Rating of ITDC vis-à-vis MoU Targets

Performance of the Company for the year 2011-12 has been notifed as ''Fair'' with Composite Score 3.921 by Department of Public Enterprises (DPE) in terms of the MoU signed with the Government of India.

Management Discussion and Analysis

The report on the Management Discussion and Analysis is placed at Annexure-I.

Plan Schemes

The Revised Capital Budget Estimates towards capital expenditure for 2012-13 was Rs. 43.12 crore which included Rs. 30.40 crore for renovation/improvement on existing hotels, catering units and other divisions. The capital budget for ATT was Rs. 0.20 crore and Rs. 2.52 crore for other activities of the Corporation. For setting up Global Tourism University, Rs. 10 crore was kept for investment in land. The capital expenditure during 2012-13 was Rs. 3.47 crore out of which Rs. 0.78 crore was capitalized and Rs. 2.69 crore was charged to revenue.

The Plan outlay for the year 2013-14 is Rs. 136.81 crore out of whichRs. 58.25 crore relates to renovation/improvement in existing hotels, catering units, other divisions and Rs. 8.56 crore relates to other activities of the Corporation. For setting up Global Tourism University, Rs. 70 crore was kept for investment in land.

Implementation of Offcial Language Policy

During the year 2012-13, the Company continued its efforts to give impetus to the use of Hindi in offcial work through motivation and training. Cash incentives were granted to them on doing prescribed quantum of work in Hindi. Hindi workshops were organized to provide practical training of noting-drafting and other works in Hindi. Various Hindi competitions were also organized during Hindi Fortnight celebrations for giving impetus to the use of offcial language in day to day work. Hindi Kavigoshthi, Hindi Natya Manchan and Hindi

Prize Distribution Event were also organized to encourage offcial language in the Corporation.

Particulars of Employees

None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Conservation of Energy & Technology Absorption

Commitment towards energy conservation remains in the units at various stages of operations. Commercial considerations, energy conservation policies and practices play a vital role in the endeavours made in this direction.

Since your Company''s operations do not involve technology absorption, the particulars as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 regarding technology absorption, are not applicable.

Foreign Exchange Earnings & Outgo

The Direct Foreign Exchange Earnings during the year 2012-13 has decreased to Rs. 19.72 crore as against Rs. 20.38 crore in the previous year. The outgo of foreign exchange during the year 2012-13 is Rs. 4.87 crore as against Rs. 2.73 crore in the previous year 2011-12.

During the year, 8 offcials were sent on foreign tours at the cost of Rs. 10.16 lakh approximately in connection with promotion of the Company''s business.

Subsidiary Companies

The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel Corporation Ltd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel Corporation Ltd (vi) Utkal Ashok Hotel Corporation Ltd and (vii) Punjab Ashok Hotel Company Ltd. The Hotel Units were set up under the aforesaid subsidiary companies at Itanagar, Guwuhati, Bhopal, Puducherry and Ranchi respectively. The operation of Hotel unit at Puri is closed since March, 2004 and the Hotel has been planned to be leased out. The Hotel project at Anandpur Sahib is incomplete. The Annual Accounts of all the subsidiary companies have been audited and fnalized and the Consolidated Annual Accounts pursuant to Clause 32 of the Listing Agreement has been prepared and presented in this Annual Report.

Exemption under Section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs vide its General Circular No. 2/2011 has granted exemption for attaching the Balance Sheet of Subsidiary Companies with the Parent/ Holding Company under Section 212(8) of the Companies Act, 1956 provided certain conditions are fulflled. In terms of the said circular, a statement containing brief fnancial details of the Company''s subsidiaries for the year ended March 31, 2013 is enclosed as Annexure VI of this report. In terms of aforesaid circular, it is affrmed that annual reports of the subsidiary companies and the related detailed information shall be made available to shareholders of the ITDC and subsidiary companies as and when required. It is further affrmed that annual accounts of the subsidiary companies shall also be made available for inspection by any shareholders in the head offce of the ITDC and of the concerned subsidiary companies. The shareholders, if they desire, may write to the company to obtain a copy of fnancials of the subsidiary companies.

Board of Directors

During the year, nine Board meetings were held to transact the business of the Company.

During the year under review, Shri Shankersinh Vaghela (w.e.f. 13.06.2012) was appointed as Part time Chairman and Non-offcial Director in the rank of Cabinet Minister, Cmde (Retd.) R. K. Okhandiar (w.e.f. 10.07.2012) was appointed as Director (C&M), Shri Girish Shankar (w.e.f. 06.09.2012) Additional Secretary- Ministry of Tourism was appointed as Govt. Nominee Director and Shri J. S. Mathur (w.e.f. 04.03.2013) Additional Secretary & Financial Advisor-Ministry of Tourism was appointed as Govt. Nominee Director pursuant to Article 61 of the Articles of Association of the Corporation.

During the year under review, Shri Anand Kumar (w.e.f. 6.9.2012), Shri P. K. Agarwal (w.e.f. 28.9.2012), Shri Shankersinh Vaghela (w.e.f. 28.11.2012) and Shri Chirravuri Viswanath (w.e.f. 4.3.2013) ceased to be on the Board of Directors. The present composition of the Board is as under:

i) Shri Girish Shankar, Additional Secretary of the Ministry of Tourism was given Additional Charge of the post of Managing Director, ITDC w.e.f. 23.04.2013

ii) Cmde (Retd.) Ratan Kumar Okhandiar, Director (C&M) w.e.f. 10.07.2012

iii) Shri Trinath Behera, Director (Finance) w.e.f. 26.04.2013

iv) Dr. (Ms.) T. Kumar, Additional Secretary & Financial Advisor- Ministry of Tourism as Govt. Nominee Director w.e.f. 04.09.2013

Pursuant to Article 61 of the Articles of Association, Cmde (Retd.) R. K. Okhandiar, Director (C&M) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Cmde (Retd.) R. K. Okhandiar is M.Sc. (Physics); M.Sc.(Defence Studies & Management), M.Phil (Defence Studies & Management) and MBA (Marketing). He had served Indian Navy in the Executive Branch since 1st July, 1979 and has been a Gunnery & Missile specialist. He has commanded four warships and held several key appointments in the Navy including Principal Director of Staff Requirements at Naval

Headquarter. He was President of 33 Services Selection Board at Bhopal before leaving Indian Navy. He is also Director in all the eight Joint Venture Companies of ITDC.

Corporate Governance

As per the requirement of Clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is given in Annexure-II which forms part of this Report.

(i) CEO/CFO Certifcate [as per Clause 49(v)]; and

(ii) Certifcate from the Company''s Auditors [as per clause 49 (vii)] along with the management reply to qualifcations.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, it is hereby confrmed :-

- that in the preparation of the accounts for the fnancial year ended 31st March, 2013, the applicable accounting standards have been followed read along with proper explanation relating to departures;

- that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the fnancial year and of the proft of the Company for the year under review.

- that the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the Directors have prepared the accounts for the fnancial year ended 31st March, 2013 on a ''going concern'' basis.

Auditors and Auditors'' Report

The Comptroller & Auditor General of India have appointed M/s V. K. Verma & Company, Chartered Accountants as Statutory Auditors of the Company and also various Branch Auditors for the year 2012-13 under Section 619(2) of the Companies Act, 1956. The Management''s replies to the comments and observations of the Statutory Auditors on the accounts (Standalone and the Consolidated) for the year 2012-13 are given in Annexures - III, IV & V.

Comments of the Comptroller and Auditor General of India

The comments of the Comptroller & Auditor General of India, under Section 619(4) of the Companies Act, 1956 on the Accounts of the Company for the fnancial year ended 31 March, 2013 is set out elsewhere in the Annual Report.

Acknowledgement

The Board places on records its sincere appreciation towards the Company''s customers/ clients for the support and confdence reposed by them in the organization and look forward to the continuance of this relationship in future.

The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particularly the Ministry of Tourism, in Company''s operations and developmental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co-operation, put the Company on the path of progress.

For and on behalf of Board of Directors

Date: 04.09.2013 (Girish Shankar)

Place: New Delhi Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the 47th Annual Report together with the audited accounts of the Corporation for the year ended 31st March 2012.

Your Corporation has achieved a total turnover of Rs. 423.06 crore during the financial year 2011-12 as against Rs. 392.36 crore in the previous year 2010-11 indicating an overall increase by 7.82%. The increase in overall turnover has been achieved in all the commercial divisions except Ashok Creatives and Engineering Divisions and hotel 'The Ashok'. During the financial year 2011-12, the Corporation has recorded a Net Profit (before tax) of Rs. 22.02 crore as against Net loss (before Tax) of Rs. 11.73 crore in previous year.

Performance Highlights

The highlights of the financial results of the corporation(Stand alone) are given below

(Rs. in crore)

Particulars 2011-12 2010-11

Turnover 423.06 392.36

Operating Profit/(Loss) 28.20 (5.96)

Less: Depreciation 5.53 5.60

Add/(Less) Prior period adjustments & (-) 0.65 (-)0.17 Extra ordinary items

(Loss)/Profit before Tax 22.02 (11.73)

Add/(less): Deferred Tax (-)7.47 3.12

Less: Provision for Income Tax 6.00 0.00

Less:- Provision for Wealth Tax 0.01 0.01

Less:- Provision for Fringe Benefit Tax 0.00 0.00

Add/(Less): Provision for Income Tax 0.00 0.03 for earlier years written back

(Loss)/Profit after Tax 8.54 (8.59)

Add Currency Translation Reserve 0.00 0.00 Written back

Amount available for appropriation 8.54 (8.59)

Proposed Dividend 4.29 0.00

Dividend Tax 0.70 0.00

Equity Capital 85.77 85.77

Capital Employed 308.86 242.09

Rate of Return on Capital:-

Before Tax 25.67% (-) 13.68%

After Tax 9.96% (-) 10.01%

Rate of Return on Capital Employed

Before Tax 7.13% (-) 4.85%

After Tax 2.77% (-) 3.55%

Operating Ratio

The Operating Ratio has improved by 8.19% in the current year with the overall operating ratio of 93.33% as against 101.52% in the previous year.

Division wise financial performance

The Division wise financial performance of the Corporation is summarized as under:-

ii. Hotel Division has achieved turnover of Rs.257.70 crore as against Rs. 254.41 crore in the previous year indicating growth by 1.29% and earned the net profit of Rs. 10.61 crore as against the net loss of Rs. 22.92 crore in the previous year.

iii. The turnover of Ashok International Trade Division (AITD) has increased to Rs. 9.18 crore from Rs. 8.37 crore in the previous year. During the year 2011-12, there are 6 duty free shops in operation i.e. three in Airports viz. Goa Airport ( Arrival & Departure), Coimbatore Airport and three shops in Seaports viz. at Haldia Port, Kolkatta Port and Chennai Seaport.

iv. The AIT Division has incurred a Net Loss of Rs. 2.49 crore as compared to net loss of Rs. 2.49 crore in the previous year.

v. The turnover of Ashok Tours & Travels (ATT) has increased to Rs. 92.04 crore from Rs. 67.78 crore in the previous year registering an increase by 35.79%. The ATT Division has achieved a net profit of Rs. 0.07 crore as against the net loss of Rs. 1.07 crore in the previous year.

vi. The turnover of Ashok Tourist Service Station (ATSS) has increased to Rs. 10.37 crore from Rs. 9.36 crore in the previous year registering an increase by 10.79%. The ATSS has incurred a net loss of Rs. 0.20 crore as against the net loss of Rs. 0.31 crore in the previous year.

vii. The turnover of the Ashok Crcatives Division (including SEL Red Fort) has been recorded at Rs. 5.05 crore (previous year Rs. 11.23 crore). The Division has incurred a net loss of Rs. 1.03 crore as against net loss of Rs. 2.35crore.

viii. The Engineering Division has achieved a turnover of Rs. 5.73 crore during the year 2011- 12 as against turnover of Rs.l 1.09 crore in the previous year. Engineering Division has incurred net loss of Rs. 8.11 crore as against net loss of Rs. 1.52 crore in the previous year.

ix. The turnover of ARMS (Ashok Events) Division has increased to Rs. 13.98 crore as against turnover of Rs.7.22 crore in the previous year . The Division has incurred a net loss of Rs.l.57 crore as against a net profit of Rs. 0.72 crore in the previous year.

x. The Ashok Institute of Hospitality and Tourism Management(AlH&TM) has achieved turnover of Rs. 4.80 crore as against Rs. 2.62 crore in the previous year. The Division has earned a net profit of Rs.0.53 crore as against net loss of Rs. 0.64 crore in the previous year.

xi. The Corporate Headquarter, being the administrative office has earned an income of Rs. 24.22 crore (previous year Rs. 20.29 crore) mainly consisting of income from Interest on short term deposits with banks from the surplus funds available with it.

2 Capital Structure

There is no change in authorized and paid up capital of the Corporation. The Authorized Capital of the Corporation is Rs.150 crore and the paid up Share Capital of the Company is Rs.85.77 crore as on 31st March, 2012.

3 Dividend

The Board of Directors recommends a dividend of 5% for the financial year 2011-12 on the paid up capital of the Company.

4 Rating of ITDC vis-a-vis MOU targets

Performance of the Company for the year 2010-11 has been notified as 'Fair' with Composite Score 4.054 by Department of Public Enterprises (DPE) in terms of the MOU signed with the Government of India.

5 Management Discussion and Analysis

The report on the Management Discussion and Analysis is placed at Annexure-I.

6 Plan Schemes

The Revised Capital Budget Estimates towards capital expenditure for 2011-12 was Rs.41.58 crore which included Rs.37.92 crore for renovation/improvement on existing hotels, catering units and other divisions. The capital budget for ATT was Rs.1.00 crore and Rs.2.66 crore for other activities of the corporation. The capital expenditure during 2011-12 was RS.18.47 crore out of which Rs. 0.83 crore was capitalized and Rs. 17.64 crore was charged to revenue.

The Plan outlay for the year 2012-13 is Rs.48.62 crore out of which Rs.46.97 crore relates to renovation/improvement in existing hotels, catering units, other divisions and Rs. 1.65 crore relates to other activities of the Corporation.

7 Implementation of official language policy

During the year 2011-12, the Company continued its efforts to promote the use of Hindi in official work through motivation and training. Cash incentives were granted to the employees on doing prescribed quantum of work in Hindi. Hindi workshops were organized to provide practical training of noting-drafting and other works in Hindi. Various Hindi competitions were also organized during Hindi Fortnight celebrations for giving impetus to the use of official language in day to day work. On this occasion Hindi Kavigoshthi and Rajbhasha Puraskar Vitran Samaroh were also organized to motivate officers and employees.

8 Particulars of Employees

None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules 1975.

9 Conservation of Energy & Technology Absorption

Commitment towards energy conservation remains in the units at various stages of operations. Commercial considerations, energy conservation policies and practices play a vital role in the endeavors made in this direction.

ii. Since your Company's operations do not involve technology absorption, the particulars as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1088 regarding technology absorption, are not applicable.

10 Foreign Exchange Earnings & Outgo

i. The Direct Foreign Exchange Earnings during the year 2011-12 has increased to Rs.20.38 crore as against Rs.14.12 crore in the previous year. The outgo of foreign exchange during the year was Rs.2.58 crore as against Rs. 6.58 crore in 2010-11.

ii. During the year, 8 officials were sent on foreign tours at the cost of Rs.12.05 lakh approximately in connection with promotion of the Company's business.

11 Subsidiary Companies

The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel Corporation Ltd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel Corporation Limited, (vi) Utkal Ashok Hotel Corporation Ltd, (vii) Punjab Ashok Hotel Company Ltd. The Hotel Units sel up under the aforesaid subsidiary companies at Itanagar, Guwuhati, Bhopal, Puducherry and Ranchi respectively. The operation of Hotel unit at Puri is closed since March, 2004 and the Hotel has been planned to be leased out. The Hotel project at Anandpur Sahib is incomplete. The Annual Accounts of all the subsidiary companies have been audited and finalized and the Consolidated Annual Accounts pursuant to clause 32 of the Listing Agreement has been prepared and presented in this Annual Report.

12 Exemption under section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs vide its General Circular No: 2/201 1 has granted exemption under Section 212(8) of the Companies Act, 1956 provided certain conditions are fulfilled. Accordingly the Board of Directors has consented for not attaching the Balance Sheet of the subsidiary companies with the Balance Sheet of ITDC. In terms of the said circular, a statement containing brief financial details of the Company's subsidiaries for the year ended March 31, 2012 is enclosed as Annexure VI of this report. In term of aforesaid circular it is affirmed that annual report of the subsidiary companies and the related detailed information shall be made available to shareholders of the ITDC and subsidiary companies as and when required. It is further affirmed that annual accounts of the subsidiary companies shall also be made available for inspection by any shareholders in the head office of the ITDC and of the subsidiary companies concerned. The shareholders, if they desire, may write to the company to obtain a copy of financials of the subsidiary companies.

13 Board of Directors

i. During the year, six Board meetings were held to transact the business of the Company.

ii. During the year under review, Shri Ashish Bahuguna (w.e.f. 21.11.2011), Additional Secretary & Financial Advisor-Ministry of Tourism was appointed as Govt. Nominee Director vice Smt. Dipali Khanna and Shri Chirravuri Viswanath (w.e.f 23.01.12), Additional Secretary & Financial Advisor-Ministry of Tourism was appointed as Govt. Nominee Director vice Shri Ashish Bahuguna pursuant to Article 61 of the Articles of Association of the Corporation.

iii. During the year under review, Smt. Dipali Khanna as Govt. Nominee Director (from 10.1.11 to 21.11.11) and Shri Ashish Bahuguna as Govt. Nominee Director (from 21.11.11 to 23.01.12) ceased to be on the Board of Directors. The Board appreciates the valuable services rendered by them during their tenure. The present composition of the Board is as under:

i) Shri Shankersinh Vaghela, Part time Chairman cum Non-official (Independent) Director w.e.f. 13.06.2012

ii) Dr. Lalit K. Panwar, originally appointed as Chairman & Managing Director w.e.f. 21.04.2010, re-designated as Vice Chairman & Managing Director w.e.f. 13.06.2012

i) Shri Chirravuri Viswanath, w.e.f. 23.01.2012

ii) Shri Anand Kumar w.e.f. 7.7.2010

iii) Shri Pradeep Kumar Agarwal, Director(Finance) w.e.f. 29.7.2010

iv) Cmde. Retd. Ratan Kumar Okhandiar, Director (C&M) w.e.f. 10.07.2012

iv. Pursuant to Article 61 of the Article of Association, Shri Anand Kumar, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment. Shri Anand Kumar is an IAS of 1984 Batch from Kerala Cadre. He is presently holding the post of Joint Secretary (Tourism) in the Ministry of Tourism. He has also served as Resident Commissioner, Govt, of Kerala. His educational qualifications are M. Sc., M.Phil., and MBA. He does not hold directorship in other companies.

14 Corporate Governance

As per the requirement of clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is given in Annexure-II which forms part of this Report.

(i) CEO/CFO Certificate [as per clause 49(v) ]; and

(ii) Certificate from the Company's Auditors [as per clause 49 (vii)].

ii. As per the Certificate of the Company's Auditors on Corporate Governance as per clause 49 (VII) above, there is only one observation which is as under:

"As required by Para I A and II A of the Clause 49 of the Agreement, we were informed that the Corporation does not have any Independent Director after 19th July, 2010. However, the Govt, of India has appointed one independent director viz. Shri Shankersinh Vaghela on 13th June, 2012 but still Corporation needs two more independent directors to fulfill the requirements of clause 49 of the Listing Agreement."

iii. In view of the above observation, it may be submitted that ITDC is a Central Public Sector Undertaking under the administrative control of Ministry of Tourism (MOT), Govt, of India. Appointment of Directors are done by Ministry of Tourism with the approval of Cabinet Committee on Appointments (ACC). ITDC is pursuing with the Ministry of Tourism for the appointment of requisite number of independent directors. It may be submitted that the process of appointment of independent director has already been commenced.

16 Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act 1956, it is hereby confirmed: -

- that in the preparation of the accounts for the financial year ended 31s1 March 2012, the applicable accounting standards have been followed read along with proper explanation relating to departures;

- that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

- that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the Directors have prepared the. accounts for the financial year ended 31st March 2012 on a 'going concern' basis.

17 Auditors and Auditor's Report

The Comptroller & Auditor General of India have appointed M/s V. K. Verma & Company, Chartered Accountants as Statutory Auditors of the Company and also various Branch Auditors for the year 2011-12 under Section 619(2) of the Companies Act, 1956. The Management's replies to the comments and observations of the Statutory Auditors on the accounts ( Standalone and the Consolidated) for the year 2011-12 are given in Annexure- III, IV & V.

18 Comments of the Comptroller and Auditor General of India

The Accounts for the financial year ended 31st March, 2012 were sent for review by the Comptroller and Auditor General (CAG) of India. Their comments and reply of the Management are awaited and shall be sent as soon as these are received.

19 Acknowledgement

i. The Board places on records its sincere appreciation towards the Company's customers/clients for the support and confidence reposed by them in the organization and look forward to the continuance of this relationship in future.

ii. The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particularly the Ministry of Tourism, in Company's operations and developmental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co-operation, put the Company on the path of progress.

For and on behalf of Board of Directors

Sd/-

Date : 31.08.2012 (Dr. Lalit K. Panwar)

Place : New Delhi Vice Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the 45th Annual Report together with the audited accounts of the Company for the year ended 31st March 2010.

Your Company has registered a turnover of Rs.299.75 crore during the financial year 2009-10 as against Rs.413.43 crore in the previous financial year 2008-09. The decline in turnover is mainly due to decline in turnover of some of the business segments like Ashok Creative Division due to non- receipt of business from the Ministry of Tourism, ATT Division, Hotel Division due to non- availability of rooms due to renovation of hotel properties mainly in The Ashok, Engineering Division due to deployment of Engineering staff in the renovation of hotel properties. The turnover is also adversely impacted by the Global recession. During the current year 2009-10 the Corporation suffered the loss (before tax) of Rs.20.51 crore as against profit before tax of Rs.38.19 crore in the previous year 2008-09. The loss occurred mainly due to decline in turnover, increase in wage cost as a result of implementation of revision in pay scales of non executive employees on IDA pattern w.e.f. 1.1.2007 and provision for arrears up to 31.3.2010 and liability for property tax to NDMC in respect of 3 Delhi based Hotels.

1. Performance Highlights

The highlights of the financial results of the corporation (Stand Alone) are given below :-


Particulars 2009-10 2008-09

Turnover 299.75 413.43

Operating Profit/(Loss) (8.54) 42.93

Less: Interest 0.00 0.00

Less: Depreciation 4.12 4.28

Add/(Less) Prior period adjustments & Extra(-)7.86 (-)0.46

ordinary items

(Lossy Profit before Tax (20.51) 38.19

Add/(less): Deferred Tax 13.09 3.12

Less: Provision for Income Tax 7.20 16.00

Less:- Provision for Wealth Tax 0.01 0.00

Less:- Provision for Fringe Benefit Tax 0.00 0.41

Add/(Less): Provision for Income Tax for earlier 0.32 0.46 years written back

(Loss>/ Profit after Tax (14.31) 25.36

Add Currency Translation Reserve Written back 0.00 0.02

Amount available for appropriation (14.31) 25.38

Proposed Dividend(MM) 0.00 8.58

Dividend Tax 0.00 1.44

Equity Capital 85.77 67.52

Capital Employed 231.14 291.74

Rate of Return on Capital:-

Before Tax (-) 23.91% 56.56%

After Tax (-) 16.68% 37.55%

Rate of Return on Capital Employed:-

Before Tax (-) 8.87% 13.09%

After Tax (-)6.19% 8.69%

1(a) DIVISION WISE FINANCIAL PEFORNACE

i. The turnover of Hotel Division during the year 2009-10 has decreased to Rs.196.71 crore from Rs.211.91 crore in the previous year 2008-09 mainly due to decrease in occupancy and non- availability of room due to renovation particularly The Ashok and as a result the division incurred the net loss of Rs.31.55 crore as against the net profit of Rs.12.94 crore in the previous year mainly due to increase in wage cost.

ii. The turnover of A.I.T. Division during the year 2009-10 has marginally increased to Rs.5.58 crore from Rs.5.56 Crore in the previous year 2008-09. During the year 2009-10, the duty free shops in operation are at Goa and Coimbtore. One Duty Free Shop at Coimbtore was opened in August 2009 during the current financial year 2009-10. Post financial year 2009-10, three shops i.e. one at Chennai Seaport (May-2010) and one at Kolkatta Seaport (September-2010) and the one at Haldia Seaport (September-2010) were opened during the year 2010-11. The AIT Division has incurred Net Loss of Rs. 2.34 crore as compared to net loss of Rs. 1.88 crore in the previous year mainly due to increase in wage cost.

iii. The turnover of ATT Division including the ATSS (i.e. Ashok Tourist Service Station) during the year 2009-10 has decreased to Rs.55.50 crore from Rs.75.94 Crore in the previous year 2008-09. The ATT Division has suffered a net loss of Rs. 2.43 crore as against the net loss of Rs.2.31 crore in the previous year mainly because of increase in wage cost.

iv. The turnover of the Ashok Creatives Division during the year 2009-10 has been recorded at Rs.3.01 crore (previous year Rs.53.06 crore) and as a result the division has suffered a loss of Rs.2.35 crore as against net profit of Rs.0.92 crore mainly because of reduced turnover due to non- receipt of international and domestic campaign business from the Ministry of Tourism.

v. The Engineering Division has achieved a turnover of Rs.3.91 crore during the year 2009-10 (previous year Rs.17.31 crore) with net loss of Rs.5.04 crore as against net loss of Rs. 3.94 crore in the previous financial year. The decline in turnover is due to deployment of engineering staff in the renovation of hotel properties particularly The Ashok.

vi. The turnover of ARMS (Events) division during the current financial year 2009-10 has decreased to Rs.7.20 crore as compared to Rs. 11.88 crore in the previous year 2008-09 with net profit of Rs.0.18 crore as against Rs.0.91 crore in the previous year mainly because of reduced turnover due to austerity measures announced by the Govt, of India which adversely affected the turnover of the Division.

vii. The Ashok Institute of Hospitality and Tourism Management(AIH&TM) during the current year 2009-10 has achieved turnover of Rs.4.45 crore as against Rs.5.42 crore in the Previous year 2008-09 with net profit of Rs.0.24 (previous year net profit of Rs. 1.54 crore). The turnover is reduced due to reduced business due to non-commencement of training courses from Ministry of DONER.

viii. The Sound and Light Shows have recorded a turnover of Rs. 0.73 crore (Previous year Rs.0.52 crore with net profit of Rs.0.16 crore(previous year profit of Rs. 0.01 crore).

ix. The Corporate H.Q. being the administrative office during the current financial year 2009-10 has earned an income of Rs. 22.64 crore as compared to Rs.31.83 crore in the previous year 2008-09 mainly consisting of income from Interest on short term deposits with banks from the surplus funds available with it. The decline in income from interest is mainly due to the expenditure on renovation of hotel properties being carried out during the year 2009-10 and onwards.

2 Capital Structure

As on 31" March 2010, the paid up share Capital of the Company increased from Rs.67.52 crore to Rs.85.77 crores due to preferential allotment of 182S0000 equity shares of Rs.10/- each at a premium of Rs.30/- per share on 14.09.2009.

3 Dividend

Since the Corporation has suffered the post tax loss of Rs.14.31 crore during the year 2009-10, no dividend for the year is proposed to be recommended by the Board.

4 Rating of ITDC vis-a-vis MOU targets

Performance of the Company for the year 2006-07 has been rated as Very Good in terms of the MOU signed with the Government of India. The Self Performance Evaluation Report for the year 2007-08 and 2008-09 has been sent to DPE and the rating is awaited.

5 Management Discussion and Analysis

A report on the Management Discussion and Analysis is placed at Annexure-I.

6 Plan Schemes

i. The Revised Budget Estimate towards capital expenditure for 2009-10 was Rs.97.45 crore which included Rs.95.80 crore for renovation of hotel properties and remaining fund for ATT Division and other activities of the Corporation. The Capital expenditure during 2009-10 was Rs. 16.30 crore out of which Rs. 11.17 crore was capitalized and Rs.5.12 crores was charged to revenue. Besides this Rs.40.45 crore relating to hotel units including Rs.39.31 crore for The Ashok has also been spent during the year on the incomplete works relating to renovation works of hotel properties.

ii. The plan outlay for the year 2010-11 is Rs.84.37 crore (including the major renovation work at Hotel properties for Rs.79.17 crores and ATT & Miscellaneous Schemes for Rs.5.20 crores. The plan outlay for the year 2010-11 includes plan outlay for Ashok Hotel where major renovation were carried out amounting Rs.34.30 croes approved by the Board in their meeting held on 28th day of January, 2010, was subsequently revised to Rs.65.26 by the Board due to the termination of the contract and the work was further re-awarded.

7 Implementation of official language policy

During the year 2009-10, the Company continued its efforts to give impetus to the use of Hindi in official work. To motivate employees for increasing use of Hindi in their official work, cash incentives were granted to them on doing prescribed quantum of work in Hindi. As part of Hindi Training Programme, employees were nominated for Hindi Typing/Stenography classes being conducted under the Hindi Teaching Scheme of the Government of India. Hindi Workshops were also organized to impart them training on noting-drafting and other works in Hindi. Various Hindi Competitions were also organized during Hindi Month celebrations for creating an environment conductive for promotion of Hindi.

8 Particulars of Employees

None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules 1975.

9 Conservation of Energy & technology absorption

The Hotels have been paying special attention to environmental issues. All the 3 hotels in Delhi have installed Rainwater Harvesting as one major step towards recharging the ground water levels. Energy conservation has also been high on the agenda for which energy audit was got done by BEE certified body. The recommendation of the audit are currently at various stages of implementation in all the three hotels.

Since your Companys operation do not involve technology absorption, the particulars as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 regarding technology absorption, are not applicable.

10 Foreign Exchange Earnings & Outgo

i. The Direct Foreign Exchange Earnings during the year 2009-10 has decreased Rs. 15.09 crore as against Rs.20.10 crore in the previous year 2008-09. The outgo of foreign exchange during the year was Rs.9.54 crore as against Rs. 4.41 crore in 2008-09.

ii. During the year, 12 officials were sent on foreign tours at the cost of Rs.17.99 lakh approximately in connection with promotion of the Companys business.

11 Subsidiary Companies

The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel Corporation Ltd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel Corporation Limited, (vi) Utkal Ashok Hotel Corporation Ltd, (vii) Punjab Ashok Hotel Company Ltd. The Hotel Units set up under the aforesaid subsidiary companies at Itanagar, Guwuhati, Bhopal, Pudicherry and Ranchi respectively. The operation of Hotel unit at Puri is closed since 2004 and the Hotel has been planned to be leased out and the Hotel project at Anandpur Sahib is incomplete. The Annual Accounts of all the subsidiary companies have been audited and finalized and the Consolidated Annual Accounts pursuant to clause 32 of the Listing Agreement has been prepared and presented in this Annual Report.

12 Exemption under section 212(8) of the Companies Act. 1956

The Ministry of Corporate Affairs vide its letter No. 47/709/2010-CL-III has granted exemption under Section 212(8) of the Companies Act, 1956 from annexing the annual accounts and other information of the subsidiary companies along with the Accounts of the Company for the financial year ended 31.03.2010. In terms of the said exemption letter, a statement containing brief financial details of the Companys subsidiaries for the year ended March 31, 2010 is enclosed as Annexure-VI of this report. The Annual Accounts of the subsidiary companies and the related detailed information are open for inspection by any shareholder including the shareholder of subsidiary companies at the registered office of the company and the subsidiaries concerned during the working hours on all working days. The Company will make available these documents to the shareholders including shareholders of subsidiary companies upon receipt of request from them. The shareholders, if they desire, may write to the company to obtain a copy of financials of the subsidiary companies.

13 Board of Directors

i. During the year, nine Board meetings were held to transact the business of the Company.

ii. During the year under review Shri Sanjay Kothari, Additional Secretary(Tourism) ( w.e.f. 1.12.2009) was appointed as C&MD pursuant to Article 61 of the Articles of Association of the Company. Further post financial year 2009-10, Dr. Lalit K. Panwar ( w.e.f. 22.4.2010) as C&MD, Shri Anand Kumar (w.e.f. 7.7.2010) as Govt. Nominee and Shri P. K. Agarwal ( w.e.f. 29.7.2010) as Director (Finance) joined the Board of Directors.

iii. During the year under review, Shri Parvez Dewan (w.e.f. 1.12.2009) as C&MD, Shri P.P. Singh (w.e.f. 1.3.2010) as Director (Finance), Smt. Leena Nandan ( w.e.f. 23.12.2009) as Govt. Nominee ceased to be on the Board of Directors of the company. Further post financial year 2009-10 Shri Sanjay Kothari (w.e.f. 21.4.2010) as C&MD, Shri Rajiv Makin (w.e.f. 1.8.2010) as Director (C&M), Shri Ashok Pahwa (w.e.f. 17.4.2010) as Non-official Director, Shri Romesh Chopra (w.e.f.

17.4.2010) as Non-official Director, Shri Jose Dominic (w.e.f. 17.4.2010) as Non-official Director, Shri Zubin Karkaria (w.e.f. 19.7.2010) as Non-official Director and Shri Jyotindra Jain (w.e.f. 19.7.2010) as Non-official Director ceased to be on the Board of Directors. The Board appreciates the valuable services rendered by them during their tenure on the Board of the Company. The present composition of the Board is as under:

Dr. Lalit K. Panwar - Chairman & Managing Director

Shri P. K. Agarwal - Director (Finance)

Shri E.K. Bharat Bhushan- Non-executive Director & part time Govt. Director

Shri Anand Kumar - Non executive & part time Govt. Director

iv. Pursuant to Article 61 of the Articles of Association of the Company, Shri Anand Kumar, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Shri Anand Kumar is an IAS and presently holding the post of Joint Secretary (Tourism) in the Ministry of Tourism. He has also served as Resident Commissioner, Govt, of Kerala. His educational qualification is M. Sc., M.Phil., and MBA. He does not hold directorship in any other companies. In ITDC, he is the member of the Audit Committee.

14 Corporate Governance

As per the requirement of clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is-given in Annexure-II which forms part of this Report.

(i) CEO/CFO Certificate [as per clause 49(v) and)

(ii) Certificate from the Companys Auditors [as per clause 49 (vii)].

As per the Certificate of the Companys Auditors on Corporate Governance as per clause 49 (vii) above, there is only one observation which is as under:

"As required by Para IV C of the Clause 49 of the Agreement, we are informed that the Corporation is in the process of preparing a risk management policy."

In its reply, it may be submitted that the Risk Management Policy laying down a sound process for identification and mitigation of risks, as approved by the Board in its meeting held on the 11th May 2010, has been circulated on the 23rd September 2010 for implementation.

15 Corporate Social Responsibility (CSRV.

CSR Policy of the Corporation has been devised with the objective of Capacity Building leading to employment generation in the Hospitality/Tourism sector, thereby building value for its stakeholders and customers. In the background of guidelines issued by DPE on CSR, the Board has given mandate to give vocational training to the students belonging to poor, including below poverty line, economically backward classes, SCs/STs to equip them to get some employment in the market and include it as an activity in MOU 2010-11.

16 Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act 1956, it is hereby confirmed: -

¦ that in the preparation of the accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed read along with proper explanation relating to departures;

¦ that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

¦ that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

¦ that the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

17 Auditors and Auditors Report

The Comptroller & Auditor General of India have appointed M/s Grover Lalla & Mehta, Chartered Accountants as Statutory Auditors of the Company and also various Branch Auditors for the year 2009-10 under Section 619(2) of the CompaniesAct, 1956. The Managements replies to the comments and observations of the Statutory Auditors on the accounts ( Standalone and the Consolidated) for the year 2009-10 are given in Annexures in. IV & V.

18 Comments of the Comptroller and Auditor General of India

The Accounts for the year ended 31st March 2010 were sent for review by the Comptroller and Auditor General (CAG) of India. Their comments and reply of the Management thereto are awaited and shall be sent as soon as these are received.

19 Acknowledgement

i. The Board places on records its sincere appreciation towards the Companys customers/clients for the support and confidence reposed by them in the organisation and look forward to the continuance of this relationship in future.

ii. The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particularly the Ministry of Tourism, in Companys operations and developmental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co-operation, put the Company on the path of progress.

For and on behalf of Board of Directors

Date : 07.12.2010 (Laht K. Panwar) Place : New Delhi Chairman and Managing Director




Mar 31, 2009

The Directors have pleasure in presenting the 44th Annual Report together with the audited accounts of the Corporation for the year ended 31st March 2009.

Your Corporation has registered a turnover of Rs.410.67 crore during the financial year 2008-09 as against Rs.470.27 crore in the previous financial year, registering a decline of 12.67%. The decline in turnover is mainly due to Global recession, 26/11 Mumbai attacks, closure of duty free shops etc. The profit (before tax) of your Corporation was down by 44.98% to Rs.38.19 crore during the financial year 2008-09 from Rs.69.41 crore in the previous financial year and the profit after tax was down by 42.42% to Rs.25.38 crore from Rs.44.08 crore in the previous financial year 2007-08. The decrease in profit is mainly due to reduced turnover and increase in wage cost as a result of implementation of 6* Pay Commissions recommendations in pay scales of CD A and recommendation of 2nd Pay Revision Committee constituted by Government for IDA pay pattern employees w.e.f. 1.1.2006 and 1.1.2007 respectively.

PERFORMANCE HIGHLIGHTS

The comparative position of the corporate profitability at a glance is tabulated below: -

(Rupees in crore)

Particulars 2008-09 2007-08

Turnover 410.67 470.27 Operating Profit 42.95 77.45 Less: Interest 0.02 0.02 Less: Depreciation 4.28 4.54 Add/(Less): Prior period adjustments and extra-ordinary items (-)0.46 (-)3.48 Profit/(Loss) before Tax 38.19 69.41 Add/(Less): Deferred Tax 3.12 3.82 Less: Provision for Income Tax 16.00 28.50 Less: Provision for Fringe Benefit Tax 0.41 0.50 Add: Provision for Income Tax for earlier year written back 0.46 (-)0.15 Transfer from Currency Translation Reserve 0.02 Profit/(loss) after Tax 25.38 44.08 Proposed Dividend 8.58 13.50 Dividend Tax 1.44 2.30 Equity Capital 67.52 67.52 Capital Employed 291.73 285.41

Capital Structure

As on 31st March 2009, the paid up share Capital of the Corporation remained unchanged as in the last year i.e. Rs.67.52 crore. The paid up capital has been increased to Rs.85.76 crore as a result of preferential allotment of 1,82,50,000 equity shares of Rs.10/- each at a premium of Rs.30/- per share to the President of India on 14th September, 2009 against equity contribution of Rs.73 crore received by the Corporation in December, 2007 for Renovation of Ashok Hotel, New Delhi.

DIVIDEND

Since the current years net profit after tax is lower by more than 20% of the average net profits after tax of the two financial years immediately preceding, it shall not be required to ensure the minimum distribution of dividend which comes out to 13.3% as prescribed in Rule 3 of Companies (Transfer of Profit to Reserves) Rules, 1975. The Board of Directors are pleased to recommend dividend of 10% on the Paid-up equity capital for the year 2008-09. The total liability for Dividend (Rs.8.58 crore) and Dividend Tax (Rs.1.44 crore) will be Rs. 10.02 crore.

RATING OF ITDC VIS-VIS MOU TARGETS

Performance of the Corporation for the year 2006-07 has been rated as Very Good in terms of the MOU signed with the Government of India. The Self Performance Evaluation Report for 2007-08 on the basis of audited data has been sent to DPE and the rating is awaited.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis is placed at Annexure-I.

DIVISION WISE PERFORMANCE

a) Hotels Division

The year gone by has been full of challenges for the hospitality industry. Falling occupancies levels and room rentals in the aftermath of the global recession and Mumbai terror attacks have weighed on the companys financial performance. However there are signs of improving prospects in the coming period.

The Hotels Division have three hotels in Delhi, five hotels in outside Delhi located at Mysore, Patna, Jammu, Bhubaneshwar and Jaipur. Two DOT properties are also managed by the Company. The occupancy of the Hotels was affected negatively in the last two quarter of the financial year especially through inbound travelers, which also becomes evident from the reduced forex earnings, even as the revenues showed marginal negative growth. To counter the recession and increased competition, competitive room pricing was worked out to market the hotels more aggressively.

The turnover of the Hotels Division during the financial year 2008-09 decreased by 5.15% to Rs.209.14 crore from Rs.220.49 crore in the previous financial year 2007-08. The decrease in turnover is mainly due to 26/11 Mumbai attacks. The net profit of Hotels Division decreased to Rs. 12.94 crore as against Rs.50.09 crore in the previous financial year 2007-08 mainly due to increased wage cost due to implementation of Wage Revision Recommendations and due to decrease in turnover.

b) Ashok Creative (AC Division)

Ashok Creative Division continued to play a key role in tourism promotion and developmental projects of the Ministry of Tourism. Ministry of Tourism is the biggest spender in terms of Media Campaigns - both International and Domestic. Ministry of Tourism is the Divisions major client in terms of turnover and revenue. However on withdrawal of PPP, winning campaigns for ITDC has become more difficult.

During the financial year 2008-09, the Division showed a turnover of Rs.53.06 croe against Rs.87.20 crore in previous year 2007-08 with a loss of Rs.0.92 crore against net profit of Rs.1.24 crore in the previous financial year 2007-08. The loss was due to primarily the fact that Ashok Creative is not INS accredited and neither does the Division has the expertise of bulk media buying from International and Domestic markets. Therefore, whenever the Division participates in any open bids for media buying activity it requires the expertise of empanelled advertising agencies. Since during the year under review the partnership with an empanelled advertising agencies did not materialize, the Division was entirely dependent on creative assignments, a few advertising campaigns and print production jobs of clients. However, the technical capability and expertise of the Division cannot be undermined as creativity and creative aspects continue to be the Divisions forte.

c) Ashok International Trade (AIT Division)

The Ashok International Trade Division (AITD) continued its efforts to sustain its operations despite many odds thrown up by the vastly transformed business environment and greatly reduced scale of its operations.

The Duty free shops at Goa and recently opened in August 2009 at Coimbatore offer world class duty free shopping facilities to international travelers earning crucial foreign exchange for the country and showcasing Indian products to the world.

The turnover of AIT Division has decreased to Rs.5.56 crore during the financial year 2008- 09 from Rs.31.33 crore in the previous year 2007-08 mainly due to closure of commercial activities of duty free shops at Custom domestic/international airports at Bangalore during May 2008. During the year AIT division has incurred Net Loss of Rs. 1.88 crore as compared to net loss of Rs. 10.53 crore in the previous financial year.

d) Ashok Travels & Tours (ATT Division)

Ashok Travels & Tours, an in-house IATA approved Travel Agency of the India Tourism Development Corporation Limited provides all travel related services primarily for the Government Sector as well as general public. Services include Airline Ticketing/Hotel Booking/Tour Packages/Car & Coach Rentals.

ATT Division during the financial year 2008-09 registered most impressive growth. The turnover of the Division increased to Rs.67.80 crore from Rs.49.77 crore in the previous financial year 2007-08 and has registered a increase of 36.22%. However the Division suffered a net loss of Rs. 1.68 crore as against Rs.0.39 crore in the previous financial year mainly due to higher wage cost due to wage revision impact.

On the whole it would be a period of growth and consolidations for ATT. The Division is now poised for a major growth initiative keeping in view of the opportunities created by forthcoming Common Wealth Games 2010.

e) Ashok Reservation and Marketing Services (ARMS Division-)

The erstwhile Marketing & Hotel Sales Division which later become ARMS Division had three main functions - Handling of events and conferences; promotion and marketing of ITDC Hotels and reservation of ITDC Hotels by Centralized Reservation Service. Later, the area of marketing of ITDC Hotels and Centralized Reservation Service has been constituted as Corporate Marketing Division and the area of handling the events and conferences as Events Division.

The Ashok Reservation & Marketing Service (ARMS) handles the Centralized Reservation Service and the Marketing of ITDC Hotels. The Event Division manages events, conferences and exhibitions both within the country and abroad and has established itself as a leader in the field of Event Management.

During the financial year 2008-09, the turnover of the ARMS (Events Division) decreased to Rs. 11.88 crore as against Rs. 19.33 crore in the previous financial year 2007-08. The net profit of the Division also decreased to Rs.0.91 crore as against Rs.2.59 crore in the previous financial year mainly due to reduced turnover and higher wage cost due to wage revision impact.

f) Ashok Consultancy & Engineering Division

The Ashok Consultancy & Engineering Division has been very actively working for the following activities :

i) Renovation and upgradation of ITDC Hotels.

ii) Implementation of Tourism infrastructure projects.

iii) Rendering consultancy services to Ministry of Tourism, Govt, of India and State Govt. Organizations.

During the financial year 2008-09, the turnover of the Division was Rs. 17.31 crore as against Rs.23.44 in the previous financial year 2007-08. The Division suffered a net loss of Rs.3.94 crore during the current financial year 2008-09 as against net loss of Rs.0.09 crore in the previous financial year 2007-08.

Despite all the odds like shortage of manpower, time bound Projects in hand, delay in releasing of funds from various clients and non-allotment of land by various State Government, the Division is doing extremely well. During the up-coming year the division has been turnarounded and is handling a turnover of Rs.150 crore including the most prestigious project of renovation of Ashok Hotel.

g) Ashok Institute of Hospitality & Tourism Management (AIH&TM Division)

The Ashok Institute of Hospitality & Tourism Management, an ISO 9001:2000 certified Institute run by ITDC in New Delhi has been undertaking Education & Training related activities during the year 2008-09 as a Strategic Business Unit of ITDC. The Division has been conducting 4 years Bachelors in International Hospitality Business Management Course affiliated to the Kurukshetra University, Kurukshetra (Haryana) since 2004 and from the current academic year, AIH & TM has started the 3 years BBA in International Hospitality affiliated to the IP University, Delhi.

During the year 2008-09, the unit achieved the turnover of Rs.5.42 crore as against Rs.5.09 crore in the previous financial year 2007-08. The net profit increased marginally to Rs.1.54 crore as against Rs.1.46 crore in the previous financial year 2007-08.

PLAN SCHEMES

The Revised Budget Estimate towards plan expenditure for 2008-09 was Rs.45.56 crore which included Rs.38.56 crore for renovation/improvement in existing hotels and remaining fund for other activities of the Corporation. The plan expenditure during 2008-09 was Rs.8.93 crore.

The plan outlay for the year 2009-10 is Rs. 165.55 crore which includes Rs. 158.49 crore for renovation of various hotels including major renovation of Ashok Hotel at an estimated cost of Rs.l 16.28 crore. For the renovation of Ashok Hotel, the Ministry of Tourism has provided budgetary support of Rs.73 crore in the form of equity. The balance plan outlay of Rs.7.06 crore is for other activities of the Corporation.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

During the year 2008-09, the Corporation continued its efforts to give impetus to the use of Hindi in official work. To motivate employees for making increasing use of Hindi in their official work, cash incentives were granted to them on doing prescribed quantum of work in Hindi. As part of Hindi Training Programme, employees were nominated for Hindi Typing/Stenography classes being conducted under the Hindi Teaching Scheme of the Government of India. Hindi Workshops were also organized to impart them training on noting-drafting and other works in Hindi. Various Hindi Competitions were also organized during Hindi Month celebrations for creating an environment conductive for promotion of Hindi.

PARTICULARS OF EMPLOYEES

None of the employees of the Corporation is drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employees) Rules 1975.

CONSERVATION OF ENGERGY AND TECHNOLOGY ABSORPTION

Your Corporation is committed to energy conservation at every stage of its operation. In order to conserve energy, various measures were taken which included preventive maintenance schedule for plant & machinery, use of lower energy consuming devices, improvement in power factor and economizing the use of gas & fuel. Hotels have significantly saved on the energy consumption by switching over to energy efficient lighting and locking system. Water harvesting has also been taken as a high concern area. Further, general awareness was created amongst the staff and engineers to conserve energy in every operation they undertook. All these measures contributed in effecting economy and saving of resources.

Since your Companys operation do not involve technology absorption, the particulars as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 regarding technology absorption, are not applicable.

FOREIGN EXCHANGE EARNINGS & OUTGO

The Direct Foreign Exchange Earnings during the year 2008-09 were Rs.20.10 crore as against Rs.57.23 crore in the previous year 2007-08. The outgo of foreign exchange during the year was Rs.4.41 crore as against Rs. 33.98 crore in 2007-08.

During the year, 25 officials were sent on foreign tours at the cost of Rs.13.83 lakh approximately in connection with promotion of the Companys business.

SUBSIDIARY COMPANIES

The Annual Accounts for the year 2008-09 in respect of the six out of seven subsidiary companies viz. (i) Donyi Polo Ashok Hotel Corporation Ltd (ii) Utkal Ashok Hotel Corporation Ltd, (iii) Punjab Ashok Hotel Company Ltd.(iv) Assam Ashok Hotel Corporation Ltd (v) Pondicherry Ashok Hotel Corporation Ltd (vi) Ranchi Ashok Hotel Corporation Limited has been finalized and audited. The Annual Accounts of MP Ashok Hotel Corporation Limited is under finalization and audit. The Ministry of Corporate Affairs have granted exemption under Section 212(8) of the Companies Act, 1956 from annexing the annual accounts of the subsidiary companies. The audited accounts of the subsidiary companies for the year 2008-09 will be circulated as soon as these are available after adoption in their AGM. A statement pursuant to the exemption u/s 212(8) of the Companies Act, 1956 giving required details together with the reasons for non-finalization/adoption of Annual Accounts is annexed as Annexture A.

BOARD OF DIRECTORS

During the year, six Board meetings were held to transact the business of the Company.

During the year under review Shri Rajiv Makin was appointed as Director (C&M) pursuant to Article 61 of the Articles of Association of the Company. He assumed the charge on 17th October 2008. Shri Sanjay Kothari has been appointed as C&MD, ITDC vice Shri Parvez Dewan. He assumed the charge on 1st of December, 2009.

Pursuant to Article 61 of the Articles of Association of the Company, S/Shri Zubin Karkaria and Jose Dominic Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. In compliance with clause 49(G)(i) of the Listing Agreement, their brief resume, nature of expertise in specific functional areas are as under:-

Shri Zubin Karkaria

Shri Zubin Karkaria has been the Director of ITDC since 19th July, 2007. Shri Zubin Karkaria is the CEO & Managing Director of India & South Asia Kuoni Travels Group. Shri Zubin Karkaria is also the Director of several Group Companies of India & South Asia Kuoni Travels Group.

Shri Jose Dominic has been the Director of ITDC since 17th April, 2007. Shri Jose Dominic is, since 1980, the Managing Director and CEO of CGH Earth (formerly Casino Group of Hotels), a hotel group who have been pioneers in tourism development in Kerala.

Shri Jose Dominic has served on several National and State advisory panels on tourism of the Government and Industry bodies. Some of these include, National Tourism Advisory Council of the Government of India and the Government of Kerala, Tourism Think Tank of Government of India, Member - Expert Panel on Tourism of ASSOCHAM (Associated Chambers of Commerce and Industry of India, and CII (Confederation of Indian Industry) etc. He has been invited to speak at major conferences and seminars on Tourism including Conference on Tourism Taxation organized by World Tourism Organization, Colloquium of Conservation and Heritage Tourism organized by the British Council, presented papers on Sustainable Tourism at the Annual Convention of the Indian Association of Tour Operators.

He has served as Hon. Secretary of the Federation of Hotel and Restaurant Associations of India and Founder President of Kerala Travel Mart, which has now acquired the reputation as the most significant travel-marketing event in India. He has been closely associated with the conservation movement and serves as the Co-convener of INTACH (Indian National Trust for Art and Cultural Heritage). He is past President of TiE - Kerala Chapter (The Indus Entrepreneurs) and KTM (Kerala Travel Mart Society) and also was the President of the Cochin Chamber of Commerce. He is a member of the National Tourism Advisory Committee.

He is a Chartered Accountant by qualification and prior to joining Casino Group of Hotels (now CGH Earth) worked with the countries leading firm of Chartered Accountants Messrs. A.F. Ferguson & Co. He is a graduate of Commerce from Loyola College, Chennai and he received his early education in Lawrence School, Lovedale.

The names of the Committee of the Board of ITDC in which above Directors are members are given in the Report on Corporate Governance.

CORPORATE GOVERNANCE

As per the requirement of clause 49 of the Listing Agreement, a detailed report on Corporate Governance together with the following is given in Anexure-II which forms part of this Report.

(i) CEO/CFO Certificate [as per clause 49(v) and]

(ii) Certificate from the Companys Auditors [as per clause 49 (vii)] and the Managements reply thereto.

DIRECTION ISSUED PURSUNAT TO CLAUSE 96 OF THE ARTICLE OF ASSOCIATION

Pursuant to Article 96 of the Articles of Association of the Company, the President of India may from time to time, issue such directives or instructions as may be considered necessary in regard to the finance, conduct of the business and affairs of the company. Such Directives issued by the President shall be in writing addressed to the Chairman. Pursuant to this, the directive issued vide Ministry of Tourism letter No. 5/l/2009-PSU(T) dated 24.06.2009 under Regulation 96 of the Articles of Association of the Corporation is enclosed as Annexture III.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act 1956, it is hereby confirmed: -

" that in the preparation of the accounts for the financial year ended 31st March 2009, the applicable accounting standards have been followed read along with proper explanation relating to departures;

¦ that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of state of affairs of the Corporation at the end of the financial year and of the profit of the Corporation for the year under review.

¦ that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Corporation and for preventing and detecting fraud and other irregularities;

¦ that the Directors have prepared the accounts for the financial year ended 31st March 2009 on a going concern basis.

AUDITORS AND AUDITORS REPORT

The Comptroller & Auditor General of India have appointed M/s Khanna & Annadhanam, Chartered Accountants as Statutory Auditors of the Corporation and also various Branch

Auditors for the year 2008-09 under Section 619(2) of the Companies Act, 1956. The Managements replies to the comments and observations of the Statutory Auditors on the accounts for the year 2008-09 are given in Annexures-IV and V.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

The Accounts for the year ended 31st March 2009 were sent for review by the Comptroller and Auditor General (C AG) of India. Their comments are awaited and shall be sent as soon as these are received along with the Managements replies thereto.

ACKNOWLEDGEMENT

The Board places on records its sincere appreciation towards the Companys customers/clients for the support and confidence reposed by them in the organisation and look forward to the continuance of this relationship in future.

The Board also gratefully acknowledges the support and guidance received from various Ministries of the Government of India particularly the Ministry of Tourism, in Companys operations and developmental plans. The Board also wishes to record its deep gratitude to all the members of ITDC family whose enthusiasm, dedication and co-operation not only made the radical turnaround possible but also put the Corporation on this path of progress.

For and on behalf of Board of Directors Sd/- Date : 08.12.2009 (Sanjay Kothari) Place : New Delhi Chairman and Managing Director

 
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