Mar 31, 2023
India Tourism Development Corporation Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the Standalone financial statements of India Tourism Development Corporation Limited
(âthe Companyâ) which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2023, and its profit(financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report.
Basis for Qualified Opinion
A. MSMED Act compliances
As per the information provided to us, the Company has identified suppliers registered under the MSMED Act, 2006, by obtaining confirmation from suppliers and information has been collated to the extent of information received.
In the absence of the requisite audit evidence, we are unable to determine the delay in making payment to MSME
entities, liability of interest and compliance on such delayed payments in terms of provisions of MSMED Act (Refer point No. 34 to Note No. 39 of the Standalone Financial Statements).
B. Revenue from License fee
The Company has not generated invoices for license fees on licensees of units, viz. Ashok Hotel, Samrat Hotel & Taj Restaurant (units of ITDC) to the tune of Rs. 1292.59 lakhs during the year 2020-21 on account of Covid-19 pandemic, and hence not considered in Books of Accounts. The matter is still under consideration before the board of Directors of ITDC. Thus, the sale of services from license fees and trade receivables of the Company continued to be understated to this extent. (Refer Point no. 12 of Note 39 to the Standalone Financial Statements).
C. Ashok Tours and Travels (ATT) Delhi
1. ATT has entered into arrangements for marketing of travel related business with M/S Shree Plan Your Journey Pvt. Ltd (SPYJ), the GSA. ATT instead of making recovery from SPYJ, Rs. 300 lakhs were paid by the Company on 27.08.2020 for which neither any justification was given nor was the authority of the same disclosed.
We continue to observe that various conditions of the agreement with SPYJ were not complied &/or not enforced like credit limit, monthly evaluation, additional Bank Guarantee (BG) etc. Despite raising the issues in the previous years and also in the current year. As informed to us Board constituted a committee in their meeting held on 14.07.2022 to look into various issues relating to SPYJ. Prima facie there is no periodical reconciliation of PLB from Airlines, identification of unlinked receipts, credit note delays, settlement of commission
bills after receiving full payment from SPYJ clients, compliance of SoP etc. However, as informed to us, there is significant progress in reconciliation of account with SPYJ which still has a gap of Rs 34.95 lakhs (PY Rs 656.79 lakhs). Above mentioned deficiencies have repercussions on timely compliance of TDS and provisions under GST Act.
During the year substantial business volume was carried out by SPYJ using their own Portal, resulting into the credit of commission, PLB etc. by Airlines to SPYJ account directly, virtually leaving little or no control of ATT on such incomes and as informed to us that the PLB/commissions received/receivable by SPYJ to ATT till FY 2022-23 have been partially accounted for and the rest are under reconciliation.
ATT has kept on "HOLD" a sum of Rs. 500 lakhs towards the pending additional BG to cover increased business volume, which is not exactly in consonance with terms of extension letter and directives of Board.
2. ATT (ITDC) has entered into Memorandum of understanding (MOU)/ Travel Services Agreement (TSA) with its various customers comprising of mainly Ministries/ Govt. Departments/ Government organisations for rendering travel related services of Domestic and International Air Ticketing at "00"/ Nil charge. Further an Office Memorandum (OM) was issued by MoF on 16th June ,2022 for non-levy of any agency charges/ convenience fee. In few cases/ services the company is yet to implement such clauses of TSA and aforementioned (OM).
In view of circumstances stated in para 1 and 2 above, we are unable to comment on the final outcome
of non- compliance of terms of Agreement, confirmations, reconciliations and/or assessment of recoverability of outstanding in the accounts pertaining to SPYJ and ATT customers and its consequential impact on the Standalone Financial Statements. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, except as stated elsewhere in the report.
Emphasis of Matters
We draw attention to the following notes on the standalone financial statements being matters pertaining to India Tourism Development Corporation Limited requiring emphasis by us:
1. Disinvestments
Pursuant to decision of the Government of India, that ministry of Tourism is under process of examining the proposals of sale/lease of hotel properties of the Company including properties of Subsidiary Companies. (Refer point No. 16(a) to (h) of Note No. 39 to the Standalone Financial Statements).
2. Status of Joint Venture Company:
The Company formed Joint Venture Company with Aldeasa of Spain by making of investment in 5000 equity shares of Rs. 10/- each, for which provision has been made for 100% diminution in value of investment. The said Company has been struck off by the Registrar of Companies and dissolved w.e.f. 21st Aug, 2017. The liability Rs. 226.51 lakhs as on 31st March,2023 is outstanding towards ITDC Aldeasa, including amount deposited of Rs. 108.38 lakhs. (Refer point no.15 of note no.39 and foot note to note no.10 of the Standalone Financial Statements) Further, the disclosure under point no. 31 (IV)(d) to note no.39 is limited to the extent of one party as mentioned above and in the absence of required information with regards to identifying such balances and transactions with other struck off parties (if any), we are unable to comment in absence of any audit evidence in this regard
3. Amount due from Subsidiaries
Management fee amounting to Rs. 65.50 lakhs and interest of Rs 312.46 lakhs on Loans given to Subsidiary prior to 01.04.2016 being prior to Ind AS Transition has not been recognized in the Standalone Financial Statements. (Refer point no. 13 to Note 39 to the Standalone Financial Statements).
No provision for outstanding dues from subsidiaries exceeding 3 years was made, for which management represented that the same will be recovered on settlement of Disinvestments.
4. Paintings/Antiques at Hotel Ashok, New Delhi (Unit of ITDC)
Earlier the matter of valuation of paintings and antiques was in process as communicated by the Management. However, no valuation from the valuer is now considered necessary by the management. (Refer point no. 22 of note 39 to the standalone financial statements)
5. Amount Receivables:
⢠The Company has sent letters for confirmation of balances, but response is negligible and hence no exercise was possible for performing reconciliations and/ or assessment in respect of amount recoverable from Trade Receivables; Deposits with Government Departments and others; amount recoverable from suppliers/ vendors, employees and other parties. However, the whole process of obtaining confirmations need to be further strengthened.
Pending such confirmations, reconciliations and/ or assessment, the impact thereof on Standalone Financial Statements are not ascertainable and quantifiable. We are unable to obtain audit evidence for the amount recoverable and periodicity thereof. (Refer Point No. 1 to Note 39 of the Standalone Financial Statements)
⢠Regular Customers (Government and others) are having debit balances beyond credit policy for which no check chart is prepared for adequate recovery steps, if, taken. After completion of outstanding of 3 years, provision is made treating them as Doubtful debts. However, the recovery process needs be strengthened. Even, the same are not shown as disputable until and unless there are legal proceedings. In absence in obtaining any audit evidence with regards to recoverability, periodicity or disputable or otherwise, we are unable to comment whether the same are disputable or not. (Refer Point No. 31(I) to Note No.39 of Standalone Financial Statements)
⢠The Company has made provision for Bad & doubtful debts to the extent of Rs. 1,872.28 lakhs on account of legal notice/ cases pertaining to few parties apart from provision made in accordance with the usual policy of the Company. (Refer point No. 21 of Note 39 to Standalone Financial Statements)
6. Amount Payables:
⢠Company does not follow a proper
system of obtaining confirmations and performing reconciliations and/ or assessment of correct balances in respect of amount payable to Trade Payables;
Deposits received (SD/EMD); Government Departments and other parties. Instead, exercise has started for obtaining balance in their Books without disclosing balances in ITDC Books, response whereof is also negligible.
Accordingly amount payable to various parties are subject to confirmations, reconciliations and/or assessments.
⢠Pending such confirmations,
reconciliations and/ or assessments, impact thereof
on the Standalone Financial Statements is not ascertainable and quantifiable. In absence of obtaining audit evidence with regards party wise, age wise
and reasons for holding the same beyond the period stated in the Companyâs policy, we are unable to comment on amount payable and periodicity thereof. (Refer Point No. 1 to Note 39 of Standalone Financial Statements)
⢠Trade Payables have been bifurcated into two parts i.e., MSME and others and further sub- divided as disputable or otherwise. Disputed trade payables taken only in cases where matter is under litigation. In case of delayed outstanding against MSME/ others, beyond the period of Credit policy of the
Company have been considered as undisputable by the management. Assessment for identifying disputable one is not available. In absence of any audit evidence with regards to assessment of disputable or otherwise, we are unable to comment thereon and impact thereof on standalone financial statements. (Refer point no 31(II) to note 39 of Standalone Financial Statements).
7. Unlinked receipts
Unlinked receipts of Rs 748.70 Lakhs from debtors against billing by the Company, which could not be matched with the amount standing to the debit of the receivables is appearing as liabilities âAdvance from Customersâ in the standalone financial statements of the Company. To that extent, the Trade Receivables and Current Liabilities are overstated. (Refer footnote to note number 26 of the standalone financial statements).
8. Inventory
The consumption of stocks, stores, crockery, cutlery etc. is being arrived by adding opening balances to the purchases and deducting therefrom closing balances as per practice being followed from the past. In absence of maintenance of proper record on day-to-day basis for Receipts, issues and closing balances, the shortage, scrap, misuse or theft of inventory is not ascertainable and quantifiable. (Refer Point no.3 to the Note No.39 of Standalone Financial Statements) Further the valuation is continued in certain cases at cost instead of lower the cost or NRV in terms of policy of the Company. (Refer Note 7 of Standalone Financial Statements)
9. TDS Receivable/income tax assessments
TDS Receivable in respect of years prior to F.Y. 2021-22 is appearing in the books of accounts, for which no reconciliation between books assessments of accounts,
26 AS, and claim made in Income Tax Returns is available. However, in certain units TDS amount has been recognized though the same are not appearing in Form 26AS by following different practice of the company. Therefore, correctness of TDS receivable could not be verified, and hence we are unable to ascertain the impact thereof in the standalone financial statements. (Refer foot note no.2 to note no.13 of Standalone Financial Statements)
10. Loss/shortage of Property, Plant &
Equipment
Records for Property Plant Equipment (Fixed Assets) are not properly
maintained and updated at various units. Further, statements wherever, prepared for physical verification has no base and as such verification is not capable of reconciliations either with the Books of Accounts or Fixed Assets Records, wherever, maintained. Hence impact of loss/ shortage/ scrap of
assets remains indeterminable. (Refer foot note (e) of Note no.2 of Standalone Financial Statements).
11. Security deposit with DIAL
At Ashok International Trade Division (AITD- A unit of ITDC), the sum of 160.97 lakhs paid in the year 2006-07 as security deposit in the form of fixed deposit (FD) receipt in favour of Delhi International Airport Private Limited (DIAL) was shown as recoverable. The of FD was encashed during 2007-08 by DIAL on account of service tax charged by DIAL in billing of service provided to the Company. This is being disputed by the Company in the past. However, the management, after making due assessment, the provision has been made for doubtful debts in the F.Y. 2020-21. (Refer to point no.1 to note no.38 of the Standalone Financial Statements).
12. Fire accident at ITDC DFS Mumbai
A fire accident occurred at DFS, Mumbai on 30.03.2021, in which unit suffered loss of stock and Fixed Assets against which claim was lodged for Rs. 48.30 lakhs. The process of claim assessment and settlement reported still under process. Further missing of stock of 436 Bottles of Liquor was reported as theft/ pilferage for which FIR and insurance claim made as reported. Value of Stock has been reduced and claim has been considered as income though survey etc., is pending for the same. (Refer to point no. 14 to note no. 39 of Standalone Financial Statements).
13. Samrat Hotel (A Unit of ITDC)
At Samrat Hotel (a unit of ITDC), a licensee viz, Good Times Restaurant Pvt. Ltd filed claim towards refund of licensee fee. A sum of Rs 904.16 Lakhs has been deposited by the Company as per interim orders of High Court dated 24.12.2020 (including interest). The matter is in appeal before Honâble High Court, Delhi Good Times Restaurant Pvt. Ltd has also filed an execution petition, proceedings whereof has been listed for 03.08.2022. Management is confident for no liability and hence no provision has been considered. (Refer point no 3 of Note no 38 to the Standalone Financial Statements).
14. Ashok Consultancy and Engineering Services (ACES)
a) In Ashok Consultancy and Engineering Services (ACES- A unit of ITDC), out of total 78 projects, 53 projects were completed/ closed but not closed in books of accounts as final bills were reportedly not received/settled. (Refer point no 19 to note no 39 of the standalone financial statements).
b) Dues recoverable from DDA MoU was signed between ITDC and DDA, as a special business dealing for furnishing DDA Flats with furniture and fixtures during Commonwealth Games 2010 (CWG). Litigations were raised by the vendors/ parties engaged by ITDC (for supply of furniture & fixtures), due to non-receipt of their ordered items by DDA. Subsequent payments were
made by ITDC to vendors as per the Court Orders from time to time. Recovery proceedings were initiated by ITDC from DDA as per the MoU. Thereafter, the matter is under dispute between ITDC and DDA, and is further referred to Administrative Mechanism for Resolution of CPSEâs Disputes (AMRCD). Department of Public Enterprise (MoF) further issued a notification dated 10th Februaryâ2023 whereby a committee is formed to examine and submit its recommendations within the stipulated time period of three months from the date of notification of the committee. During the year the company has further debited DDA with Rs 364.31 lacs with the payment to its vendors on passing court orders in their favor and legal cost incurred thereon. Total amount recoverable from DDA is Rs 1,696.42 lakhs (PY Rs 1,332.11 Lakhs). (Refer point no. 20 to Note no. 39 of Standalone Financial Statements)
ITDC policy and practice adopted for provisioning of receivables, disclosed under Point No. 4 to General Note No. 39, is for transactions entered into during the normal course of business and the transaction entered is not covered under the same. During the year 2022-23 the matter is under consideration before the AMRCD and the management is very confident of recovery of the amount involved therefore no provision was considered necessary at this stage.
c) Ministry of Tourism has appointed ITDC as Central Nodal Agency for Central Sector Schemes i.e., Swadesh Darshan Scheme and PRASAD (Pilgrimage Rejuvenation and Spiritual Augmentation Drive) for monitoring over the expenditure limits allotted to the State Tourism Board and to resolve day to day queries raised by Sub Nodal Agency. The amount received against the same has been shown under earmarked balance on the face of the balance sheet separately and corresponding amount is shown under âother financial liabilityâ. (Refer foot note to note no. 10(A), footnote to note no. 24 of the standalone financial statements).
15. Legal / interest etc. on contingent liabilities
Amount indicated as contingent liabilities/ claims against the company reflects basic values. Legal expenses interest and other costs not considered being indeterminable. (Refer footnote 2 of note 38 to the standalone financial statement)
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
Sl. No. |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
1. |
Contingent Liabilities: There are various litigations pending before various forums against the Company and managementâs judgement is required for estimating the amount to be disclosed as contingent liability. We identified this as a key audit matter because the estimates on which these amounts are based involve a significant degree of management judgement in interpreting the cases and it may be subject to management bias. Refer note no. 38 of the Standalone Financial Statements.. |
We have obtained an understanding of the Companyâs internal instructions and procedures in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedures: - understood and tested the design and operating effectiveness of controls as established by the management for obtaining relevant information for pending litigation cases; - discussing with management any material developments and latest status of legal matters; - read various correspondences and related documents pertaining to litigation cases produced by the management and relevant external legal opinions obtained by the management and performed substantive procedures on calculations supporting the disclosure of contingent liabilities; - examining managementâs judgements and assessments whether provisions are required; - considering the management assessments of those matters that are not disclosed as the probability of material outflow is considered to be remote; - reviewing the adequacy and completeness of disclosures; Based on the above procedures performed, the estimation and disclosures of contingent liabilities are considered to be adequate and reasonable. |
2. |
Discontinued Operations and Assets Held for Sale: Assets of the Company continue to be held for sale and discontinued operations as at the balance sheet date. Refer to note no. 36 and point no. 16 and 17 to note no. 39 of Consolidated Financial Statements. |
We analyzed the managementâs estimate of realizable value. Based on our procedures, we noted no exceptions and consider managementâs approach and assumptions to be reasonable. |
Sl. No. |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
3. |
Uncertain Taxation Matters The Company has material uncertain tax matters under dispute which involves significant judgement to determine the possible outcome of these disputes. Refer note no. 38 of the Consolidated Financial Statements. |
We assessed the managementâs underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We also considered legal precedence and other rulings, including in the Companyâs own case, in evaluating managementâs position on these uncertain tax positions. |
4. |
Investments in Subsidiaries The Company holds investments in Subsidiaries of ''879.87 lakh (equity and preference) out of which investments of ''800.48 lakh (879.8779.38) (equity and preference) pertains to Subsidiaries which has significant accumulated losses. These subsidiaries are currently under disinvestment. However, Company has received ''306 lakhs in payment against of investment of ''249.88 in Ranchi Ashok Bihar Corporation Ltd and shown as liability till the completion of share transfer formalities. Refer footnote to note no. 3 of the Standalone Financial Statements. |
We assessed the managementâs assumptions and the past trends wherein the amount received on disinvestment by the Company were much more than the amount originally invested in the said subsidiary Companies. As a result of aforesaid, we agree with the management that the carrying values of these investments held by the Company are supportable in the context of Companyâs Financial Statements except in case of Punjab Ashok Hotel Co. Ltd, where State Government has proposed to pay reduced amount, which has been accepted by the Company and provision for shortfall has been made in the Books of 2021-22. |
Our opinion is not modified with respect to above key matters.
Other Matters
1. Goods and Service Tax
⢠In certain units, the Company has received advances from its customers, on which GST has not deposited as per provisions of Goods and Services Tax Act/Rules, the amount whereof is not ascertainable and quantifiable in absence of availability of records.
⢠Further Company has availed GST Input (ITC) on the invoices of the Creditors/ Vendors but the same has not been surrendered back in case payment has not been made within 180 days. The amount whereof is not ascertainable and quantifiable in absence of due records.
In both the above cases, GST liability has not been provided which will impact on the results of Standalone Financial Statements, but the amount thereof is not ascertainable/ determinable in absence of availability of records.
2. Sale of Air Tickets from ATT units (A unit of ITDC)
The Contract or arrangement is between Airlines and Ashok Tours and Travels (ATT- units of ITDC) for the purchase of tickets in the name of customers of ATT and accordingly accounts are settled between the two for purchase of tickets and make payment after deductions /adjustments for refund of tickets cancelled and/or incentives. ATT has arrangement with its customers for sale of air tickets for which invoices are generated. Based on expert''s opinion, the amount of services charges made over and above the cost of Air tickets is being shown as revenue, while the cost of Air tickets is neither shown as purchases nor turnover of the Company. The management represented that this is the practice of the industry. This does not affect the profitability of the Company but Turnover and purchases are understated to that extent.
Refer note 39 (27) regarding system of bifurcation in Debtors and other receivables for year 2022-23 and previous years. The closing balance of receivables against sales
is bifurcated in debtors and other receivables on the basis of average margin as per internal working done by the Company.
Our opinion is not modified with respect of above matters.
Information other than the standalone Financial Statements and Auditorsâ Report Thereon
The Companyâs Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the Standalone Financial Statements and our auditorâs report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of DirectorsâResponsibility for the Standalone Financial Statements
The Companyâs Management and Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the Financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards ) Rules 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds
and other irregularities, selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease the operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility for the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate Internal Financial Controls system with respect to Standalone Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone financial statements, including the disclosures, and whether the standalone Ind As financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were most significance in the audit of standalone Ind AS financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so we would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the Company as we have considered appropriate and according to the information and explanation given to us, we give in the âAnnexure-Aâ statement on the matters Specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, in the âAnnexure-Bâ on the directions/ sub directions issued by the Comptroller and Auditor General of India.
3. (A) As required by section 143(3) of the Act read with Companies (Audit and Auditors) Rules 2014 and amendments therein, subject to matters of qualification, emphasis, key matters &other matters stated above, in our opinion and to the best of our information and according to the explanations given to us:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (Including other Comprehensive Income), the Statement of Change in equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements Comply with the Indian Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
e) Being a Government Company, pursuant to notifications NO. GSR 463(E) dated 05th June, 2015 Issued by the Ministry of corporate Affairs, Government of India, provisions of sub section (2) of section 164 of the Act, are not applicable to the Company.
f) Matters of Qualifications have been stated above under qualified opinion.
g) With respect to the adequacy of the Internal Financial Controls over Financial Reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure-Câ.
h) As per Notification no. GSR 463(E) dated June 05,2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies. Accordingly reporting in accordance with requirement
of provisions of section 197(16) of the Act is not applicable on the Company.
i) With respect to other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014(as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March, 2023 on its financial position in Standalone Financial Statements - Refer note no -38 of the standalone financial statements.
ii. The Company did not have any longterm contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There has been no delay in transfer of amount required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a. The Management has represented
that,the Company has not used an Intermediary for advancing / loaning/investing funds to/ in an ultimate beneficiary or has not provided any guarantee / security or the like on behalf of the ultimate beneficiary.
b. The Management has represented that, the Company has not acted as an intermediary for advancing / loaning / investing funds to / in an ultimate beneficiary identified by the Funding Party or has not provided any guarantee/ security or the like on behalf of the Funding party.
c. Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (iv)(a) and (iv)(b) contain any material mis-statement.
v. As stated in foot note to note no. 15 to the standalone financial statements, the Board of Directors of the
Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting.
The amount of dividend proposed is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
For J K S S & Associates For Doogar & Associates
Chartered Accountants Chartered Accountants
FRN. 006836C FRN. 000561N
(CA LS Khandelwal) (CA Mukesh Goyal)
Partner Partner
M. No. 009878 M. No. 081810
UDIN: 23009878BGYEGH1094 UDIN: 23081810BGZCIE8885
Place: New Delhi Place: New Delhi
Dated: 24.05.2023 Dated: 24.05.2023
Mar 31, 2021
Independent Auditorâs Report
To,
The Members of India Tourism Development Corporation Limited
Our report dated 20th July, 2021 on the Standalone Financial Statements for the year ended March 31, 2021, has been revised to give effect to the observations made by the Comptroller & Auditor General of India in the supplementary audit carried out by them under Section 143(6)(a) of the Companies Act, 2013.
We have audited the Standalone Financial Statements of India Tourism Development Corporation Limited
(âthe Companyâ) which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Cash Flow Statement for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2021, and its profit/loss (financial performance including other comprehensive income), changes in equity and its cash flow for the year ended on that date
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to the following notes on the Standalone Financial Statements being matters pertaining to India Tourism Development Corporation Limited requiring emphasis by us:
The Company does not collate maintain and present the details of MSME Vendors registered under Micro Small and Medium Enterprises Development (MSMED) Act 2006.Hence, Compliances of procurement; provision for interest, if any, on outstanding due to MSME units could not be verified. We, therefore, are unable to determine the delay in making payment to such entities and liability of interest and compliance on such delayed payments in terms of provisions of MSMED Act.(Refer point no. 31 to note no. 39 of the Standalone Financial Statements)
Unlinked receipts of Rs 50.35 Lakhs on account of receipts from debtors against billing by the Company, which could not be matched with the amount standing to the debit of the receivables is appearing as liabilities âAdvance from Customersâ in the standalone financial statements of the Company. To that extent the Trade Receivables and Current Liabilities are overstated. (Refer foot note to note no. 26 of the Standalone Financial Statements)
The Company does not follow a system of obtaining confirmations, performing reconciliations and/or assessment in respect of amount recoverable from Trade Receivables; Deposits with Government Departments and others; amount recoverable from suppliers/ vendors; employees; and other parties. Similarly Company does not follow a system of obtaining confirmations, performing Reconciliations and/ or assessment of correct balances in respect of amount payable to Trade Payables; Deposits (EMD/SD); Government Departments; and other parties. Accordingly, amount receivable from and payable to various parties are subject to confirmations, reconciliations and/ or assessments.
Pending such confirmations, reconciliations, and/or assessment, the impact thereof on the Standalone Financial Statements are not ascertainable and quantifiable. (Refer point no. 1 to note no. 39 of the Standalone Financial Statements)
At Samrat Hotel (unit of ITDC) âTrade receivablesâ, includes amount due from M/s kayo Enterprises Rs. 1058.86 Lakhs which is pending since long. As per explanation and details shared with us, M/s Kayo Enterprises Pvt. Ltd. has entered into a license Agreement dated 06.01.2018 with the Hotel Samrat - a unit of ITDC for occupying space in Hotel Samrat for running restaurant on license fees basis for a period of Five years. M/s Kayo Enterprises (The licensee) has failed to make the payment of license fees on regular basis. Due to non- payment of license fees the license agreement has been terminated on 14.05.2020 and Hotel Samrat has filed cases under section 138/141 to the tune of Rs 800 Lakhs ( approx.) which is almost equal to the outstanding amount (after adjusting the existing security deposit of Rs 201.67 lakhs). Also the bank guarantee of Rs 201.67 lakhs has been encashed in subsequent
year. Further the Fixed Assets and equipment are lying in the premises of Hotel Samrat, which is under lien to Hotel Samrat as per the agreement and can be auctioned as per direction of Estate Office, ITDC under PPE Act. Since the management is confident of recovering that said amount, therefore, no provision is required/ made against the same (Refer point no. 26 of note no. 39 of Standalone Financial Statements).
TDS Receivable in respect of years prior to F.Y. 2019-20 amounting to '' 3612.14 lakhs is appearing in the books of accounts as on 31st March, 2021, for which no reconciliation between books of accounts, 26 AS, and claim in Income tax return is available. Therefore, correctness of TDS receivable could not be verified, and hence we are unable to ascertain the impact thereof in the standalone financial statements. (Refer foot note no. 2 to note no. 13 of Standalone Financial Statements)
In terms of decision of Government of India, Operations of Hotel Janpath was closed w.e.f. 30-10-2017 and property was handed over to the Ministry of Urban Development. The issue of compensation to be receivable by the Company for loss of business opportunity arising due to decision of the Government of India for closure of operations of Hotel is remained pending. The amount of VRS paid to employees amounting Rs 644.14 lakhs is being shown as recoverable from the Government as on 31st March 2021. (Refer point no. 18(a) of note no. 39 of Standalone Financial Statements)
Records for Property Plant and Equipment (Fixed Assets) are not properly maintained and updated at various units. Further physical verification, wherever is made from
the statements having no basis is futile exercise with no results including not capable of reconciliation with books of accounts and /or FAR. Hence impact of loss/shortage/scrapped assets remains indeterminable. (Refer foot note (f) of note no. 2 of Standalone Financial Statements)
The Company formed Joint Venture Company withAldeasa of Spain by making of investment in 5000 equity shares of '' 10/- each, for which provision has been made as Bad & Doubtful in earlier years. The said Company has been struck off by the Registrar of Companies and dissolved w.e.f. 21st Aug, 2017. The liability '' 226.51 lakhs as on 31st March 2021 is outstanding towards ITDC Aldeasa, apart from a deposit of '' 108.38 lakhs. (Refer point no. 17 of note no. 39 and foot note no. 2 to note no. 10 of the Standalone Financial Statements)
The Company has made investment in Ranchi Ashok Bihar Hotel Corporation Ltd in the form of 24988 equity shares of Rs 1000 of each aggregating is '' 249.88 Lakhs. Payment for disinvestment as decided against the same has been received and shown as liability and differential surplus amount of '' 56.12 lakhs therein has not been booked due to pendency of shares transfer formalities. (Refer point no 18(g) to note no. 39 of the Standalone Financial Statements)
At Ashok International Trade Division (AITD-A unit of ITDC), the sum of '' 160.97 lakhs paid in the year 2006-07 as security deposit in the form of fixed deposit (FD) receipt in favour of Delhi International Airport Private Limited (DIAL) was shown as recoverable. The FD was encashed during 2007-08 by DIAL on account of service tax charged by DIAL in billing of service provided to the Company. This is being disputed
by the Company in the past. However, the management, after making due assessment, the provision has been made for doubtful debts in the F.Y 202021. (Refer to point no. 1 to note no. 38 of the Standalone Financial Statements)
Interest bearing loans were given to subsidiary companies from time to time in the past and in the year under audit. The subsidiaries are showing interest as expenses in their books, but the Company has not considered interest as income except to the extent of TDS paid by subsidiaries thereon.
During the F.Y. 2020-21, Principal loan along with interest as stipulated has been received from Ranchi Ashok Bihar Hotel Corporation Ltd. and accounted for in the Books. As regards remaining subsidiaries, Interest Income for the period from 01.04.2016 onward (From implementation of Ind AS accounting) has been considered amounting '' 266.46 Lakhs (Interest minus TDS). However, interest income for the period prior to 01.04.2016 (the period prior to implementation of Ind AS) amounting to '' 255.40 Lakhs has not been considered in the books. (Refer point no. 13 to note no. 39 of Standalone Financial Statements)
The consumption of stock of stores, crockery, cutlery, etc has been worked out by the Company by adding to the opening balances, purchases made during the year and deducting there from the closing balance at the year end based on physical verification of the inventories, which is valued at cost instead of Lower of cost or NRV as per Accounting policy of the Company. Accordingly separate impact of wastage/shortage/loss/theft included in the consumption thereof as well as valuation difference in the Standalone Financial Statements of the Company remains indeterminable. However, as
per management, efforts were made to exercise on the same and assessed the amount insignificant. (Refer point no. 3 to note no. 39 of the Standalone Financial Statements)
A fire accident occurred at unit of ITDC, DFS Chennai on 27th April 2020. Company filed an insurance claim for loss of stock and property of '' 58.41lakhs. The matter was reported as pending with surveyor for claim settlement. (Insurer -National Insurance Company Ltd).
A fire accident was also occurred at DFS the Mumbai on 30.03.2021, in which unit suffered loss of stock and Fixed Assets against which claim was lodged for '' 48.30 lakhs. The process of claim assessment and settlement reported still under process. (Refer point no 14 and 16 to note no. 39 of the Standalone Financial Statements)
The Company has not generated invoices for license fees on licensees of Ashok Hotel, Samrat Hotel & Taj Restaurant to the tune of '' 1292.59 Lakhs for the period upto 30.09.2020 on account of Covid-19 pandemic the licensees have disputed the same though the Board of Directors has denied for the waiver. The sales of services from License fee and assets of the Company are understated to that extent. The matter was reported under active consideration of ITDC management. (Refer point no. 11 to note no. 39 of the Standalone Financial Statements)
At Samrat Hotel (a unit of ITDC), a licensee viz Good Times Restaurant Pvt. Ltd. filed claim towards refund of licensee fee. A sum of '' 904.16 Lakhs has been deposited by the Company as per interim orders of High Court dated 24.12.2020 (including interest). The matter is in appeal before Honâble High court, Delhi. Management is confident for no liability and hence no provision has been considered. (Refer point no
5 to note no. 38 of the Standalone Financial Statements)
In respect of Ashok Tours & Travels (ATT- Chennai- A unit of ITDC), out of total amount of '' 200 lakhs appearing in their books as âAdvance Othersâ being amount deposited with âThe Registrar General, High Court, Chennai 104â, out of which an amount of '' 100 lakhs has been withdrawn by the landlady as per the court order dated 25.09.2019, the same has been booked as expense during the financial year 2019-20. (Refer point no. 3 to note no. 38 of the Standalone Financial Statements)
There has been an incidence of theft of '' 0.71 lakhs at Hotel Jammu Ashok (A unit of ITDC) on May 09, 2020 the same is evidenced by the FIR dated May 11, 2020, wherein theft of inventory has been reported. However, the amount had been later recovered. (Refer point no. 15 to note no. 39 of the Standalone Financial Statements). The Financial Statements of Hotel Jammu Ashok (Closed during the Year) have been merged with the Head Quarter without closer of audit of the same. (Refer point no. 15 to note no. 39 of the Standalone Financial Statements).
In Ashok Consultancy and Engineering Services ( ACES- A unit of ITDC), out of total 68 projects, 52 projects were completed/closed but not closed in books of accounts as final bills were reportedly not received/settled. (Refer point no. 22 of note no. 39 of the Standalone Financial statements)
Turnover of Hyderabad House (A unit of ITDC) was being shown to the extent of supervision charges received over and above the cost of material supplied and services rendered. From the year 2020-21 the total amount of material
supplied, services rendered and supervision charges has shown as turnover and accordingly the corresponding amount of previous year has been amended. However, there will be no impact on profitability. (Refer point no. 12 to note no. 39 of Standalone Financial Statements)
Amount indicated as contingent liabilities/ claims against the company reflects basic values. Legal expenses interest and other costs not considered being indeterminable. (Refer foot note (2) to note no. 38 of the Standalone Financial Statements)
Certain painting and antiques are placed in Hotel Ashok, New Delhi (A unit of ITDC). The source of receipts whereof is not available on record. Management has identified the inventory during the Financial Year 2020-21, valuation whereof was reported in process and hence the same have not been accounted for in the Standalone Financial Statements for the year 202021. (Refer point no. 23 to note no. 39 of the Standalone Financial Statements)
Our opinion is not modified with respect of above matters of Emphasis.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
Sl. No. |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
1 |
Deferred Tax Asset: |
We have assessed the managementâs |
The Company has recognised deferred tax |
judgement relating to the forecasts of future |
|
asset. The recoverability of this deferred |
revenue, taxable profits and evaluated |
|
tax asset is dependent upon the generation |
the reasonableness of the considerations/ |
|
of sufficient future taxable profit to utilise |
assumptions underlying the preparation of |
|
such entitlement within the stipulated period |
these forecasts. |
|
prescribed under the Income Tax Act, 1961. |
Based on the above procedures performed, |
|
We identified this as a key audit matter |
the recognition and measurement of deferred |
|
because significant judgement is required |
tax asset relating to MAT credit entitlement |
|
in forecasting future taxable profits for recognition of deferred tax asset. |
are considered adequate and reasonable. |
Sl. No. |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
2 |
Contingent Liabilities: There are various litigations pending before various forums against the Company and managementâs judgement is required for estimating the amount to be disclosed as contingent liability. We identified this as a key audit matter because the estimates on which these amounts are based involve a significant degree of management judgement in interpreting the cases and it may be subject to management bias. Refer note no. 38 of the Standalone Financial Statements. |
We have obtained an understanding of the Companyâs internal instructions and procedures in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedures: - understood and tested the design and operating effectiveness of controls as established by the management for obtaining all relevant information for pending litigation cases; - discussing with management any material developments and latest status of legal matters; - read various correspondences and related documents pertaining to litigation cases produced by the management and relevant external legal opinions obtained by the management and performed substantive procedures on calculations supporting the disclosure of contingent liabilities; - examining managementâs judgements and assessments whether provisions are required; - considering the management assessments of those matters that are not disclosed as the probability of material outflow is considered to be remote; - reviewing the adequacy and completeness of disclosures; Based on the above procedures performed, the estimation and disclosures of contingent liabilities are considered to be adequate and reasonable. |
3 |
Discontinued Operations and Assets Held for Sale: Assets of the Company continue to be held for sale and discontinued operations as at the balance sheet date. Refer to note no. 36 and point no. 18, 19 and 20 to note no. 39 of Standalone Financial Statements. |
We analyzed the managementâs estimate of realizable value. Based on our procedures, we noted no exceptions and consider managementâs approach and assumptions to be reasonable. |
Sl. No. |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
4 |
Uncertain Taxation Matters |
|
The Company has material uncertain tax matters under dispute which involves significant judgement to determine the possible outcome of these disputes. Refer note no. 38 of the Standalone Financial Statements. |
We assessed the managementâs underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We also considered legal precedence and other rulings, including in the Companyâs own case, in evaluating managementâs position on these uncertain tax positions. |
|
5 |
Investments in Subsidiaries |
|
The Company holds investments in Subsidiaries of ''927.98 lakh (equity and preference) out of which investments of ''846.38 lakh (equity and preference) pertains to Subsidiaries which has significant accumulated losses. These subsidiaries are currently under disinvestment. However, Company has received ''306 lakhs in payment against of investment of ''249.88 Lakhs in Ranchi Ashok Bihar Corporation Ltd and shown as liability till the completion of share transfer formalities. |
We assessed the managementâs assumptions and the past trends wherein the amount received on disinvestment by the Company were much more than the amount originally invested in the said subsidiary Companies. As a result of aforesaid, we agree with the management that the carrying values of these investments held by the Company are supportable in the context of Companyâs Financial Statements. |
|
Refer footnote to note no. 3 of the Standalone Financial Statements. |
Due to the continuation of Covid-19, we were not able to physically observe the complete physical verification of inventory that was carried out by the management at the year end. We however, performed alternative procedures to obtain Audit Evidence as prescribed in the SA 501 âAudit Evidence-Specific Consideration for selected itemsâ.
The Company has entered into arrangements for marketing of air tickets etc. In terms of arrangement, the agency M/s Shree Plan Your Journey Pvt. Ltd. (GSA) has to deposit an amount as security as well as against out standings through them. As per terms and conditions, evaluation is to be made on monthly basis of outstanding receivables and obtains remittance from GSA. No proper evaluation, reconciliation as on 31.03.2021
and confirmation was available. Instead of making recovery from GSA, '' 300 Lakhs were paid by the Company on 27.08.2020 without any justification. Based on audited accounts of the units, the excess credit availed by GSA as on 31st March 2021 is '' 562.89 lakhs ('' 1343.73 lakhs outstanding - '' 780.84 lakhs credit balances).
The Contract or arrangement is between Airlines and Ashok Tours and Travels (ATT- A unit of ITDC) for the purchase of tickets in the name of customers of ATT and accordingly accounts are settled between the two for purchase of tickets and make payment after deductions /adjustments for refund of tickets cancelled and/or incentives. ATT has arrangement with its customers for sale of air tickets for which invoices are generated. Based on expertâs opinion, the amount of services charges made over and above the cost of Air tickets is being shown as revenue, while the cost of Air tickets are neither shown
as purchases nor turnover of the Company. The management represented that this is the practice of the Industry. This does not affect the profitability of the Company but Turnover and purchases are understated to that extent.
Security Deposits to the tune of '' 4.79 lakhs were paid by ATT Chennai carried over since long. Neither reconciliation nor other steps appear to be taken in this regard including writing of the same, if required.
Total amount of leave encashment paid during the F.Y. 2020-21 is amounting to '' 750.12 lakh. Disclosure for the same is not reflected in Sub-Note 32 of the Standalone Financial Statements.
We did not audit the Financial Statements of 28 branches included in the Standalone Financial Statements of the Company whose Financial Statements reflected total assets of '' 17055.11 Lakh as at March 31, 2021 and total revenue of '' 9977.19 lakh for the year ended on that date, as considered in the Standalone Financial Statements of these branches have been audited by the respective branch auditors, whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosure included in respect of these branches, is based solely on the report of such branch auditors.
We also did not audit the financial statement of Jammu Unit, which was closed during the F.Y. 2020-21 and merged with Head Quarter without closer audit of the same having total assets of '' 117.50 lakhs and loses of '' 86.74 before closure.
Our opinion is not modified with respect of above matters.
The Companyâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the Standalone Financial Statements and our auditorâs report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the Financial position, financial performance, total comprehensive income, changes in equity and cash flows of the company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease the operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting
process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate Internal Financial Controls system with respect to Standalone Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone financial statements, including the disclosures, and whether the standalone Ind As financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were most significance in the audit of standalone Ind AS financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so we would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the Company as we have considered appropriate and according to the information and explanation given to us, we give in the âAnnexure 1â statement on the matters Specified in paragraphs 3 and 4 of the Order.
2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of the books and records of the Company as we Considered appropriate and according to the information and explanation given to us, in the Annexureâ2â on the directions/ sub directions issued by the Comptroller and Auditor General of India.
3. As required by section 143(3) of the Act, and subject to matter of emphasis, key matters, other matters stated above and Notes to Standalone Financial Statements, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (Including other Comprehensive Income), the Statement of Change in equity and the statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
e) Being a Government Company, pursuant to notifications NO. GSR 463( E ) dated 05th June 2015 Issued by the Ministry of corporate Affairs, Government of India, provisions of sub section(2) of section
164 of the Act, are not applicable to the Company.
f) With respect to the adequacy of the Internal Financial Controls over financial Reporting of the company and the operating effectiveness of such controls, refer to our separate report in âAnnexure-3â.
g) As per Notification no. GSR 463(E) dated June 05, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies. Accordingly reporting in accordance with requirement of provisions of section 197(16) of the Act is not applicable on the Company.
h) With respect to other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in Standalone Financial Statements - Refer note no -38 of the standalone financial statements.
ii. The Company did not have any long term contracts including derivative contracts for which there were any Material foreseeable losses; and
iii. There had been no delay in transfer, to the Investor Education and Protection Fund by the Company.
For J K Sarawgi & Company Chartered Accountants (FRN. 006836C)
UDIN: 21009878AAAABB4089 (CA LS Khandelwal) Place: New Delhi Partner
Date: 13/10/2021 M.No. 009878
Mar 31, 2018
Independent Auditorâs Report to the Members of India Tourism Development Corporation Limited, New Delhi
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of INDIA TOURISM DEVELOPMENT CORPORATION LIMITED, New Delhi, which comprise the Balance Sheet as at March 31, 2018 and Statement of Profit 6t Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Change in Equity for the year then ended and a summary of Significant Accounting Policies and other explanatory information in which are incorporated the returns of 38 branches for the year ended on that date audited by the Branch Auditors of the Companyâs branches at locations as per Exhibit A.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the Matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of financial position, financial performance including other comprehensive income, cash flows and changes in the equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are responsible and prudent; and design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of Affairs (financial position) of the Company as at 31st March,2018, its profit (financial performance including other comprehensive income), its cash flows and changes in the equity for the year ended on that date.
Emphasis of Matter
Attention is drawn to the Notes to the Financial Statements :
a) That on account of non-finalization of the issue of compensation payable to the Company for loss of business opportunity arising due to the decision of the Government of India for closer of operation of the Hotel Janpath, New Delhi, w.e.f. from
30.10.2017 and handing over the property to the Ministry of Urban Development, the sum of Rs, 585.74 lakh paid to the employees who opted for VRS, is being shown as recoverable from the Government as on 31.03.2018. Our opinion is not qualified in respect of this matter. [Refer Point no. 1 of Note no. 13 & Point no. 10 (c) of Note no. 39-General Notes to the financial statements]
b) The impact of loss/shortage/ wastage due to non-reconciliation of the results of physical verification carried out for fixed assets with the books of accounts on the financial statements of the Company remains indeterminate. Our opinion is not qualified in respect of this matter. [Refer Point no. (g) of Note no. 2 to the financial statements]
c) Balances in trade receivables, loans and advances, deposits, trade payables and sundry creditors are subject to independent confirmation. Our opinion is not qualified in respect of this matter. [Refer Point no. 1 of Note no. 39-General Notes to the financial statements]
d) In the case of Vigyan Bhawan Unit, contract agreement with the Directorate of Estates to provide catering services expired on 17.11.2015 and the Unit is operating without any formal agreement since then. The renewal process is going on and as per the correspondence on file, the agreement will be extended up to 30th November 2018. Our opinion is not qualified in respect of this matter. [Refer Point no. 2 of Note no. 27 to the financial statements]
e) For Hyderabad House, New Delhi, the Unit continues providing management services under an agreement with the Ministry of External Affairs, Govt, of India, which had expired on 31.03.2017. The renewal process is going on and as per the correspondence on file, the agreement will be extended upto 31st March, 2020. Our opinion is not qualified in respect of this matter. [Refer Point no. 3 of Note no. 27 to the financial statements]
f) An amount of 113.82 lakh is being shown as âCustomers at Creditâ under Note-26 âOther Current Liabilitiesâ, but in the financial statements not adjusted/linked with the corresponding trade receivable under Note-08 âTrade Receivableâ. Our opinion is not qualified in respect of this matter. [Refer Note no. 26 to the financial statements]
g) The Ashok Hotel, Vigyan Bhawan, Lalita Mahal Palace Hotel & Head Quarter recognized âProvision for Doubtful Debtsâ amounting to Rs, 620.04 lakh (out of total provision of Rs, 4760.36 lakh for trade receivables more than six months old) as on 31st March, 2018 against its debts of equal amount by showing them as receivable for sufficiently long period of time instead of writing them off from the books of accounts as the recovery of which is not evidenced by the records available. Our opinion is not qualified in respect of this matter. [Refer Note no. 8 to the financial statements]
h) The Company has recognized âProvision for amount recoverable - sales taxâ amounting to Rs, 7.88 lakh as on 31st March, 2018 against the recoverable of equal amount by showing them as receivable for sufficiently long period of time instead of writing off from the books of accounts the recovery of which is not evidenced by the records available. Our opinion is not qualified in respect of this matter. [Refer Point no. 1 of Note no. 6 to the financial statements]
i) The consumption of stock of stores, crockery, cutlery etc., has been worked out by the Company by adding to the opening balances purchases made during the year and deducting there-from the closing balance at the year-end based on physical inventories valued as per the accounting policy. Accordingly, separate impact of loss/ shortage/wastage included in the consumption thereof in the financial statements of the Company remains indeterminate. Our opinion is not qualified in respect of this matter. [Refer Point no. 3 of Note no. 39-General Notes to the financial statements]
j) The Ashok Hotel Unit has recognized Rs, 16.90 lakh as inventory of liquor at leased out restaurant viz. âCapitolâ on the basis of their records; however, the actual realizable amount is not ascertainable since the restaurant has been sealed by the State Excise Department. Our opinion is not qualified in respect of this matter. [Refer Point no.
2 of Note no.7 to the financial statements]
k) In Ashok Consultancy and Engineering Services Unit out of 100 projects, 71 projects were completed long back but not closed in the books of accounts as final bills were reportedly not received/ settled. Reconciliation exercise is expected to be completed by October 2018. Thereafter balances will be squared up/adjusted after approval by higher authorities. Our opinion is not qualified in respect of this matter. [Refer Point no. 14 of Note no. 39 to the financial statements]
I) At Ashok International Trade Division the sum oft 161 lakh paid in the year 2006-07 as security deposit in the form of fixed deposit (FD) receipt in favour of Delhi International Airport Pvt. Ltd. (DIAL) is being shown as recoverable. Its FD was encashed during 2007-08 by DIAL on account of service- tax charged by DIAL in billing of services provided to the Company. This is being disputed by the Company on the ground that their service was not liable for service-tax and they are hopeful of its recovery. Our opinion is not qualified in respect of this matter. [Refer Note no. 4 to the financial statements]
m) In the case of Duty Free Shops at Seaport inventories are valued at cost which does not include other costs such as C&F cost, freights etc., for bringing the inventories to current location and condition as per Ind AS-2. Our opinion is not qualified in respect of this matter. [Refer Point no. 1 of Note No.-07 to the financial statements]
n) In the case of Units Taj Restaurant and Kosi-Tourist complex, VAT and Service- tax returns are not reconciled with financial books as on 31/03/2018, for Taj Restaurant the service tax amount refundable is t 0.81 lakh and of Kosi-Tourist complex Service tax paid in advance is t 3.42 lakh and sales tax paid in advance oft 0.04 lakh due to which the correct profitability of the units remain unascertain. Our opinion is not qualified in respect of this matter. [Refer Point no. 4 of Note no. 13 to the financial statements].
Other Matter
a. The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by us and our report for the year ended 31st March 2017 and 31st March 2016 dated 19th July 2017 (date of revised audit report) and 30th May 2016 (read with addendum dated 19th July 2016) respectively expressed an unmodified opinion and qualified opinion respectively on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
b. We did not audit the financial statements/ information of 38 branches included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of t 20,537.80 lakh as at 31st March, 2018 and total revenue of Rs, 16,645.57 lakh for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements/information of these branches have been audited by the branch Auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch Auditors and accompanying financial statements.
Our opinion is not modified in respect of these
Matters
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Government of India in terms of sub-section (11) of Section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the âAnnexure Aâ a statement on the Matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143 (5) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Bâ of our report on the compliances of the directions/sub-directions, indicating the areas to be examined, issued by the Comptroller and Auditor General of India.
3. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;
(c) The reports on the accounts of branch offices/ units of the Company audited under Section 143 (8) of the Act by the branch Auditors have been sent to us and have been properly dealt with by us in preparing this report;
(d) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us;
(e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules,2015;
(f) Being a Government Company, pursuant to Notification No. GSR 29(E) dated 21st October 2003 issued by the Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company;
(g) With respect to the adequacy of the internal financial control over financial reporting of the Company and the operating effectiveness of such control refer to our separate report in âAnnexure Câ.
(h) With respect to the other Matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 38 to the standalone Ind AS financial statements;
ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii) No amount required to be transferred to the Investor Education and Protection Fund was outstanding at the year.
The Annexure âAâ referred to in our report of even date on the accounts of India Tourism Development Corporation Limited, New Delhi, for the year ended 31st March 2018, we report that;
i) (a) The Company has generally maintained proper records showing full Particulars, including quantitative details and situation of fixed assets except in following units/branches where records were incomplete in respect of quantitative details, situation, etc.:
S. No. |
Name of the Unit/Branch |
1. |
DFS Tuticorin Seaport |
2. |
Hotel Samrat |
3. |
DFS Krishnapatnam |
4. |
DFS CPT Seaport |
5. |
DFS Kakinada |
6. |
Western court |
7. |
Hotel Kalinga Ashok |
8. |
ATT Chennai |
9. |
DFS Vishakhapatnam |
10. |
Taj Restaurant |
11. |
Kosi Restaurant |
12. |
Hotel The Ashok, New Delhi |
13. |
Vigyan Bhawan |
(b) As per the information 6t explanation given to us, the fixed assets have been physically verified by the management generally at interval of one year. In most of the units/ branches as well as in Head-office, the book balance and physical balances have not been reconciled and hence, the discrepancies have not been ascertained for necessary adjustments in the books of accounts.
(c) The title deeds of immovable properties in the following cases are not held in the name of the Company:
S. Name of No. the Unit |
Status of the Title Deed |
1 The Ashok, |
Lease deed is respect of |
New Delhi |
land of Ashok Hotels Ltd. is registered in the name of Ashok Hotel Limited erstwhile, which was merged with the Company on 28.03.1970 and not being transferred in the name of the Company. The total area of leasehold land is 21.155 acres. |
2 Hotel |
Lease deed expired on |
Jammu |
11.01.2010. The total |
Ashok, |
area of lease hold is 60 |
Jammu |
Kanals 6t 4 marlas. |
3 Hotel Lease deed has not been Patliputra executed in favour of the Ashok, Patna Company
4 ATT, Delhi Leasehold land at
C-119, Naraina Industrial Area, Phase-I, Naraina, New Delhi measuring 8566 sq. yards is leased by DDA for 99 years. The original title deed was seized by the CBI in a complaint case no. RC-10(A)/2013-CBI-ACB-DLI
5 Hotel Samrat, Title deed of leasehold New Delhi land of the unit is not executed. Area involved is 4.01 acre.
6 Taj Title deed in favour of Restaurant the Corporation has not been effected.
ii) As per the information 6t explanation provided to us, inventories have been physically verified by the management generally once in a year. In case of following units/branch Auditors have reported that physical verification report was not available for verification:
S. No. |
Name of the Unit/Branch |
1. |
Hotel Samrat |
2. |
ATT Delhi |
3. |
Ashok Events |
4. |
Hotel Janpath |
5. |
Western Court |
6. |
ACES |
7. |
AIHTM |
8. |
DFS Delhi |
9. |
Vigyan Bhawan |
The Company is generally maintaining proper record of inventory but the closing inventory is recorded in the books of accounts on the basis of physically available inventory and no actual shortage/loss/wastage is recorded separately
iii) As per the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act, therefore clause 3(iii) (a) (b) and (c) of the Companies (Auditors Report) Order, 2016, are not applicable.
iv) As per the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act.
v) As per the information and explanation given to us, the Company has not accepted any deposit from the public in terms of Section 73 to 76 or any other relevant provisions of the Act, and the Rules framed there under. Thus, the directives of Reserve Bank of India and provisions of clause 3 (v) of the Companies (Auditors Report) Order, 2016, are not applicable.
vi) As per the information and explanation given to us, maintenance of cost records has not been prescribed by the Central Government under sub-Section (1) of Section 148 of the Act.
vii) (a) In our opinion the Company is
generally regular in depositing undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Service-tax, customs duty, excise duty, value-added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of arrears of outstanding statutory dues as at the last day of financial year concerned for a period of more than six months from the date they became payable, are given below:
(b) Cess, dues of Income Tax or Sales Tax or Wealth Tax or Service Tax or duty
Name of the Unit |
Nature of Dues |
Amount (Rs, in lakh) |
Period to which the Amount Relates |
Hotel Samrat |
TDS demand |
4.60 |
2007-2018 |
Hotel Kalinga Ashok |
Lease Rent of Land Payable to Govt. |
0.195 |
Earlier years |
Works Contract Tax |
0.798 |
2016-17 |
|
Works Contract Tax |
0.0288 |
2015-16 |
|
Works Contract Tax |
0.019 |
2017-18 |
|
Labour Cess |
0.0048 |
2015-16 |
|
Labour Cess |
0.0122 |
2016-17 |
|
Service-Tax |
0.30362 |
2017-18 |
|
TDS |
0.0059 |
2017-18 |
|
AIHTM |
TDS |
0.087 |
2016-17 |
Hyderabad House |
ESI |
1.72 |
More than 6 months |
VigyanBhawan |
ESI |
4.78 |
More than 6 months |
of customs or duty of excise or value added tax have not been deposited on account of any dispute:
Name of the Unit |
Nature of Dues Amount (Rs, in lakh) |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Hotel Kalinga Ashok |
Excise Duty (MGQ) 13.33 |
2002-03 |
Odisha High Court |
ESI 1.45 |
Earlier Years |
District Court, Khurda |
|
Service Tax 105.92 |
2008-09 to 2012-13 |
Commissioner Appeals, GST, Bhubaneswar |
|
AITD |
Custom Duty 18478.67 (Demand for |
2004-05 |
Custom Assistant Commissioner |
DPS Mumbai) |
||||
Custom Duty (Demand for DFS Kolkatta) |
42.17 |
2003 |
Commissioner of Customs |
|
Sales Tax/VAT |
1343.96 |
1995-2008 |
Joint Commissioner |
|
TDS |
8.15 |
2007-12 |
Assistant Commissioner |
|
Hotel Patliputra Ashok |
ESI |
0.67 |
Earlier Years |
ESI Labour Court |
VAT |
3.09 |
Earlier Years |
Bihar VAT Department |
|
Hotel Samrat |
ESI |
71.68** |
1998-2003 |
Delhi High Court |
Hotel Ashok |
ESI |
708.52 |
Earlier Years |
In process of appeal to High Court |
Service Tax |
23.95 |
Earlier Years |
CESTAT, Delhi |
|
Ashok Events |
Service-Tax |
39.65 |
2006-2009 |
Commissioner of Service Tax appeals |
TDS |
7.24 |
2007-2017 |
CPC/Income Tax Department |
|
Taj Restaurant |
Trade Tax |
0.50 |
30.09.2002 |
Department of VAT |
Trade Tax |
0.71 |
12.02.2003 |
Department of VAT |
|
LMPH |
Service Tax |
2.54 |
2010-11 to 2011-12 |
CESTAT, Bangalore |
Service Tax |
3.60 |
2012-13 and 2013-14 CESTAT, Bangalore |
||
Service Tax |
1.84 |
2014-15 |
CESTAT, Bangalore |
|
ACES |
TDS |
8.19 |
2014-15 to 2017-18 |
CPC |
Hotel Janpath |
TDS |
21.56 |
2007-2008 to 2011-12, 2017-18 |
CPC |
ATT Delhi |
TDS |
5.72 |
2007-08 to 2016-17 |
CPC |
viii) According to the information and explanations given to us, the Company has not taken any loan from any financial institution, Bank or issued any debentures till the end of financial year. Hence the provisions of clause 3(viii) of the Companies (Auditors Report) Order, 2016, regarding reporting on default in repayment of dues to financial institution or bank or debenture is not applicable.
ix) According to the information provided and explanations given to us, no moneys have been raised by way of initial public offer or further public offer (including debt instruments) nor any term loan from any bank or financial institutions. Thus provisions of clause 3 (ix) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
x) As per the information provided and explanation given to us, no fraud by or on the Company by its Officers or employees has been noticed or reported during the year except in case of Unit - Hotel Patliputra Ashok where a theft of t 2.88 lakh has been taken place on 11.02.2018 by one of contractual staff named Deepak kumar deployed by manpower supply agency âService Master Cleanâ having employee code PSW001035. FIR has been lodged against him with FIR No. 89/18.
xi) As per the information and explanation given to us the provisions of Section 197 read with Schedule V to the Act, are not applicable on Government Company.
Thus, the provisions of clause 3 (xi) of the Companies (Auditors Report) Order,
2016, are not applicable to the Company.
xii) The Company is not a Nidhi Company, so the provisions of clause 3 (xii) of the Companies (Auditors Report) Order, 2016, are not applicable.
xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, and wherever applicable the details have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations provided to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review, so the requirement of Section 42 of the Act, are not applicable on it; therefore clause 3 (xiv) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him, therefore clause 3 (xv) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
xvi) According to information and explanations given to us, the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act, 1934, therefore clause 3 (xvi) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
For Kishore 6t Kishore
Chartered Accountants
(Firm Regn. No. : 000291N)
(Anshu Gupta)
Place: New Delhi Partner
Date: 30.05.2018 M.No. 077891
Mar 31, 2017
Independent Auditorâs Report to the Members of India Tourism Development Corporation Limited
Revised Report on the Standalone Financial Statements
Our report dated 30.05.2017 on the accounts for the year ended 31st March, 2017 has been revised to give effect to the observations made by the Comptroller & Auditor General of India in the supplementary audit carried out by them under Section 143(6)(a) of the Companies Act, 2013.
We have audited the accompanying financial statements of INDIA TOURISM DEVELOPMENT CORPORATION LIMITED, New Delhi, which comprise of Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement and a summary of the Significant Accounting Policies and other explanatory information for the year then ended, in which are incorporated the Returns of 36 units for the year ended on that date audited by Branch Auditors of the Company at locations as per Exhibit A.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters in Section 134(5) of the Companies Act, 2013, (âthe Actâ) with respect to the preparation and presentation of these Standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2017, its profit and cash flow for the year ended on that date.
Emphasis of Matter
a) In respect of Ashok Hotel, notices of eviction/termination having been served on two licensees viz. M/s. Mayar Health Resort and M/s. Jain Restaurant (Shraman) in the year 2014 and 2012 respectively and the matter have become sub-judice having gone under litigation, accordingly the amounts of Rs, 77.11 lakh and Rs, 24.80 lakh received from them during the year 201617 are adjusted against their past dues. Our opinion is not qualified in respect of this matter [Refer Point 7 of Note No. 32 to the financial statements].
b) In respect of ACES, unit of the Company, we draw attention towards âTrade Payablesâ Note-9 in the Standalone Financial Statements, against which outstanding dues for more than 3 years amounting to Rs, 1,987.64 lakh are adjusted without reconciliation/approval from the management, the reconciliation being still in progress. Our opinion is not qualified in respect of this matter.
c) The amount of consumption of stock of stores, crockery, cutlery, etc. , has been worked out by adding to the opening balances purchases made during the year and deducting there from the closing balance at the year end based on the physical inventories valued as per the accounting policy and accordingly, no separate impact of loss/shortage/wastage is included in the consumption thereof in the financial statements. Our opinion is not qualified in respect of this matter. [Refer Point no. 3 of Note No.32 to financial statements]
d) In most of the cases, the impact of loss/shortage due to nonreconciliation of the results of physical verification carried out for fixed assets with the books of accounts on the financial statements, remains indeterminate. Our opinion is not qualified in respect of this matter. [Refer Note No. 11 to the financial statements ].
e) Balances in trade receivables, loans and advances, deposits, trade
payables and sundry creditors (other than trade payables) are subject to independent confirmation. Our opinion is not qualified in respect of this matter. [Refer Point no. 1 of Note No. 32 to the financial statements].
f) Amounts aggregating Rs, 156.60 lakh included under âAdvances from customersâ (Note No. 10 âOther Liabilitiesâ) remain unadjusted/ unlinked against âTrade Receivablesâ (Note No. 17 ).
g) At Vigyan Bhawan, a Unit of the Company, the contract agreement with the Directorate of Estates for providing catering services expired on 17th November, 2015 and the Unit is operating without any formal agreement. Our opinion is not qualified in respect of this matter. [Refer Point 2 of Note 20 to the financial statements].
Other Matter
We did not audit the financial statements /information of 36 branches included in the Standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs, 26,154.14 lakh as at 31st March, 2017, and total revenues of Rs, 31,231.89 lakh for the year ended on that date, as considered in the Standalone financial statements. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the disclosure of amounts included in respect of these branches, is based solely on the report of such branch auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, and on the basis of such checks of the books and records of the Company as considered appropriate by us and according to the information and explanation given to us, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143 (5) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Bâ of our report on the compliances of the directions/sub-directions, indicating the areas to be examined, issued by the Comptroller and Auditor General of India.
3. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The reports on the accounts of branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report;
(d) The Balance Sheet and the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.
(e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(f) Being a Government Company, pursuant to Notification No. GSR 29(E) dated 21st October, 2003, issued by the Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company ;
(g) With respect to the adequacy of the internal financial control over financial reporting of the Company and the operating effectiveness of such control, refer to our separate report in âAnnexure Câ.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements;
ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii) No amount required to be transferred to the Investor Education and Protection Fund was outstanding at the year end; and
iv) The Company has provided requisite disclosures in the financial statements with respect to Units as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management. However, amounts aggregating '' 39,19,000 were received from transactions not permitted during the period 8th November, 2016 to 30th December, 2016 which were duly deposited into the Bank- Refer Point 16 of Note 32 to the financial statements.
âAnnexure Aâ to Independent Auditorâs Report for the year ended 31.03.2017
The Annexure âAâ referred to in our report of even date on the accounts of India Tourism Development Corporation Limited, New Delhi, for the year ended 31st March, 2017, we report that;
i) (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in few units/branches where records were incomplete in respect of quantitative details, situation, etc.
(b) As per the information & explanation given to us, the fixed assets have been physically verified by the management generally at interval of one year. In most of the units/ branches as well as in Head-office, the book balance and physical balances have not been reconciled and hence, the discrepancies have not been ascertained for necessary adjustments in the books of accounts.
(c) The title deed of immovable properties in following cases are not held in the name of the Company:
S. No. |
Name of the Unit |
Status of the Title Deed |
1 |
The Ashok, |
Lease deed is in the |
New Delhi |
name of Ashok Hotels Ltd. which merged with the Company on 28.03.1970 and not transferred in the name of the Company. |
|
2 |
Hotel Jammu |
Lease deed expired on |
Ashok, Jammu |
11.01.2010 |
|
3 |
Hotel |
Lease deed has not been |
Patliputra |
executed in favour of the |
|
Ashok, Patna |
Company |
|
4 |
ATT, Delhi |
Leasehold land at C-119, Naraina Industrial Area, Phase-I, Naraina, New Delhi measuring 8566 sq. yards is leased by DDA for 99 years. The original title deed was seized by the CBI in a complaint case no. RC-10(A)/2013-CBI-ACB-DLI |
5 |
Samrat Hotel, Title deed of leasehold |
|
New Delhi |
land (4.01 acre) not executed |
|
6 |
ACES |
Registration of Title Deed in favour of the Company has not been effected in respect of leasehold land |
measuring 64 Kanals at |
|
Gulmarg. |
|
7 Taj |
Title Deed in favour of |
Restaurant |
the Corporation has not |
been effected. |
ii) As per the information & explanation provided to us, inventories have been physically verified by the management generally once in a year. Few of the branch auditors have reported that physical verification report was not available for verification.
The Company is generally maintaining proper record of inventory but the closing inventory is recorded in the books of accounts on the basis of physically available inventory and no actual shortage/loss/wastage is recorded separately.
iii) As per the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act, therefore Clause 3(iii) (a) (b) and (c) of the Companies (Auditorsâ Report) Order, 2016, are not applicable.
iv) As per the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act.
v) As per the information and explanation given to us, the Company has not accepted any deposit from the public in terms of Section 73 to 76 or any other relevant provisions of the Act, and the Rules framed there under. Thus, the directives of Reserve Bank of India and provisions of Clause 3 (v) of the Companies (Auditors Report) Order, 2016, are not applicable.
vi) As per the information and explanation given to us, maintenance of cost records has not been prescribed by the Central Government under sub-section (1) of Section 148 of the Act.
vii) (a) In our opinion the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Service-tax, customs duty, excise duty, value-added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of arrears of outstanding statutory dues as at the last day of financial year concerned for a period of more than six months from the date they became payable, are given below:
Name of the Unit |
Nature of Dues |
Amount ('' in lakh) |
Period to which the Amount Relates |
ATT Patna |
Service-Tax |
0.0068 |
More than 6 months |
Hotel Kalinga Ashok |
Lease Rent of Land Payable to Govt. |
0.0195 |
More than 6 months |
Name of the Unit |
Nature of Dues |
Amount ('' in lakh) |
Period to which the Amount Relates |
Works Contract Tax |
0.7401 |
2015-16 |
|
Works Contract Tax |
0.0288 |
2016-17 |
|
Labour Cess |
0.0048 |
2015-16 |
|
Labour Cess |
0.0122 |
2016-17 |
|
VAT |
0.7288 |
More than 6 months |
|
AIHTM |
TDS |
0.74 |
More than 6 months |
Name of the Unit |
Nature of Dues |
Amount ('' in lakh) |
Period to which the Amount Relates |
Hyderabad House |
ESI |
1.72 |
More than 6 months |
Vigyan Bhawan |
ESI |
4.78 |
More than 6 months |
Hotel Ashok |
Property Tax |
306.93 |
For earlier years |
(b) Cess, dues of Income Tax or Sales Tax or Wealth Tax or Service Tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute:
viii) According to the information and explanations given to us, the Company has not taken any loan from any financial institution, Bank or issued any debentures till the end of financial year. Hence the provisions of Clause 3 (viii) of the Companies (Auditorâs Report) Order, 2016, regarding reporting on default in repayment of dues to financial institution or bank or debenture is not applicable.
Name of the Unit |
Nature of Dues |
Amount ('' in lakh) |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Hotel Kalinga Ashok |
Excise Duty (MGQ) 13.33 |
2002-03 |
Odisha High Court |
|
ESI |
1.45 |
Earlier Years |
District Court, Khurda |
|
Service Tax |
52.91 |
Earlier Years |
Addl. Director General, DGCEI, Kolkata |
|
AITD |
Custom Duty (Demand for DPS Mumbai) |
18478.67 |
2004-05 |
CESTAT |
Custom Duty (Demand for DFS Kolkatta) |
42.17 |
2003 |
Committee of Dispute |
|
Sales Tax/VAT |
2465.12 |
1995-2008 |
Commissioner Appeals |
|
Hotel Patliputra Ashok |
ESI |
0.67 |
Earlier Years |
ESI Labour Court |
VAT |
3.09 |
Earlier Years |
Bihar VAT Act JCCT, Patna |
|
Hotel Samrat |
ESI |
71.68** |
1998-2003 |
Delhi High Court |
EPF |
17.91 |
1982-1985 |
Supreme Court |
Name of the Unit |
Nature of Dues |
Amount (Rs, in lakh) |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Hotel Ashok |
ESI |
686.32 |
Earlier Years |
Delhi High Court, Tis Hazari, Delhi |
Service Tax |
22.04 |
Earlier Years |
CESTAT, Delhi |
|
Ashok events |
Service-Tax |
39.65 |
2006-2009 |
Additional Commissioner of Service Tax |
Taj Restaurant |
Trade Tax |
0.50 |
30.09.2002 |
Department of VAT |
Trade Tax |
0.71 |
12.02.2003 |
Department of VAT |
|
LMPH |
Service Tax |
7.99 |
2010-11 to 2014-15 |
CESTAT |
Service Tax |
5.89 |
2015-16 |
Commissioner of Service Tax |
**Unit has provided liability of Rs, 50.79 lakh in the books of account.
ix) According to the information provided and explanations given to us, no moneys have been raised by way of initial public offer or further public offer (including debt instruments) nor any term loan from any bank or financial institutions. Thus provisions of Clause 3 (ix) of the Companies (Auditorâs Report) Order, 2016, are not applicable to the Company.
x) As per the information provided and explanation given to us, no fraud by or on the Company by its officers or employees has been noticed or reported during the year.
xi) As per the information and explanation given to us the provisions of Section 197 read with Schedule V to the Act, are not applicable on Government Company. Thus, the provisions of Clause 3 (xi) of the Companies (Auditorâs Report) Order, 2016, are not applicable to the Company.
xii) The Company is not a Nidhi Company, so the provisions of Clause 3 (xii) of the Companies (Auditorâs Report) Order, 2016, are not applicable.
xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, and wherever applicable the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
xiv) According to the information and explanations provided to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review, so the requirement of Section 42 of the Act, are not applicable on it; therefore Clause 3 (xiv) of the Companies (Auditorâs Report) Order, 2016, are not applicable to the Company.
xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him, therefore Clause 3 (xv) of the Companies (Auditorâs Report) Order, 2016, are not applicable to the Company.
xvi) According to information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, therefore Clause 3 (xvi) of the Companies (Auditorâs Report) Order, 2016, are not applicable to the Company.
For Kishore & Kishore
Chartered Accountants
(Firm Regn. No. : 000291N)
(S.C. Kishore)
Place: New Delhi Partner
Date: 19.07.2017 M.No. 003390
Mar 31, 2016
1. Report on the Standalone Financial Statements
We have audited the accompanying financial statements of INDIA TOURISM DEVELOPMENT CORPORATION LIMITED, New Delhi, which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement, and a Summary of the Significant Accounting Policies and other explanatory information for the year then ended, [in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Companyâs branches at locations of the branches],
2. Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters in Section 134(5) of the Companies Act, 2013, (âthe Actâ) with respect to the preparation and presentation of these Standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditorsâ Responsibility
Our responsibility is to express an opinion on these Standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements.
4. Basis for Qualified Opinion
(a) The Company has dues of Rs. 1668.87 lakh as at 31.03.2016 (Rs. 1332.57 lakh upto 31.03.2015) from certain subsidiaries with state governments/ their companies (with significant accumulated losses) for services rendered and funds advanced to them (including interest thereon), besides, holding investments therein at a book value of Rs. 1060.58 lakh as at 31.03.2016 (Previous Year Rs. 1060.58 lakh) against which the management has represented that these investments being of long term nature, the shortfall/diminution in their value is not permanent and that the intrinsic value of the assets owned by these companies are sufficient to recover the Companyâs dues and itâs cost of investments, even when two of these companies are non-operational and the present net worth of most of the companies is in the negative. Further, pursuant to the Gol decision, the Ministry of Tourism has also initiated the proposal for sale/lease of hotel propertiesâ of the Company and its subsidiaries and in view of the same there remains no doubt about recoverability of the amounts invested by the Company and its other recoverable. [Refer Note no. 17(1), 14A(1) ft 32 (10)].
(b) The Ashok Hotel, New Delhi, a unit of the Company, paid on different dates during the year, sums aggregating Rs. 117.04 lakh to the Service Tax Department for the excess CENVAT Credit availed by them on their input services as per the observations in their last statutory audit report for the year ended 31st March 2015 dt. 21st May 2015, Para 4(Hi). However, the Unit has neither deposited interest payable under the provisions of service-tax law on the said sum of Rs. 117.04 lakh nor provided the liability in respect thereof in the books of accounts, the impact whereof remains indeterminate on the financial statements.
5. Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid Standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016, its profit and cash flow for the year ended on that date.
6. Emphasis of Matter
a. The amount of consumption of stock of stores, crockery, cutlery, etc, has been worked out by adding to the opening balances, the purchases made during the year and deducting them from the closing balance at the yearend based on the physical inventories valued as per the accounting policy, and accordingly, separate impact of loss/shortage/ wastage included in the consumption thereof in the financial statements of the units of the Company remains indeterminate [Refer Para no. 32 (3 )]. Our opinion is not qualified in respect of this matter.
b. We draw attention to the Note 31 para C, regarding the Companyâs appeal in the matter of vacation of property dismissed by the Divisional bench of Honâble Delhi High Court on 22.04.2016, and the Company is in the process of filing SLP with the Honâble Supreme Court of India and the management is of the view, supported by the legal opinion, that the appeal will be successfully challenged and the Companyâs liability will be substantially lower than the sum Rs. 1,314.21 lakh deposited by them. However, on prudent basis the Company has made provision in the books of accounts forRs. 1,314.21 lakh pending finalization of the matter, the 50% of the decreed amount provided is shown as Exceptional Item in the Statement of Profit & Loss and the balance amount with interest up to 31.03.2016 has been included under contingent liabilities. Our opinion is not qualified in respect of this matter.
7. Other Matter
We did not audit the financial statements /information of 35 branches included in the Standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs. 25,369.19 lakh as at 31st March, 2016 and total revenues of Rs. 29,753.06 lakh for the year ended on that date, as considered in the Standalone financial statements. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the disclosure of amounts included in respect of these branches, is based solely on the report of such branch auditors. Our opinion is not qualified in respect of this matter.
8. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(b) The reports on the accounts of branch offices of the Company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
(c) The Balance Sheet and the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.
(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) The matters described in the Basis for Qualified Opinion Paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
(f) Being a Government Company, pursuant to Notification No. GSR 29(E) dated 21st October 2003, issued by the Government of India, provisions of Sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company;
(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above;
(h) With respect to the adequacy of the internal financial control over financial reporting of the Company and the operating effectiveness of such control, refer to our separate report in âAnnexure Bâ.
(i) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i). The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements;
(ii). The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
(iii). An amount of Rs. 0.10 lakh required to be transferred to the Investor Education and Protection Fund was outstanding at the year-end was deposited on 9th May, 2016.
âAnnexure Aâ to Independent Auditorâs Report for the year ended 31.03.2016
The Annexure âAâ referred to in our report of even date on the accounts of India Tourism Development Corporation Limited, New Delhi, for the year ended 31st March, 2016, we report that:
i). (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in few units/branches where records were incomplete in respect of quantitative details, situation, etc.
(b) As per the information 6t explanation given to us, the fixed assets have been physically verified by the management generally at interval of one year. In most of the units/ branches as well as in Head-office, the book balance and physical balances have not been reconciled and hence, the discrepancies have not been ascertained for necessary adjustments in the books of accounts.
(c) The title deed of immovable properties in following cases are not held in the name of the Company:
S. No. |
Name of the Unit |
Status of the Title Deed |
1 |
The Ashok, |
Lease deed is in the |
New Delhi |
name of Ashok Hotels Ltd. which was merged with the Company on 28.03.1970 and not been transferred in the name of the Company. |
|
2 |
Hotel Jammu |
Lease deed expired on |
Ashok, Jammu |
11.01.2010 |
|
3 |
Hotel |
The land at B.C.P. |
Patliputra |
Marg measuring 1.5 |
|
Ashok, Patna |
acre was donated by the Government of Bihar and is not supported by title deed. |
|
4 |
ATT, Delhi |
Title deed of leasehold land not available |
5 |
Samrat Hotel, Title deed of leasehold |
|
New Delhi |
land (3.19 acre) not executed |
ii) As per the information 6t explanation provided to us, the inventories have been physically verified by the management generally once in a year. Few of the branch auditors have reported that physical verification report was not available for verification.
The Company is generally maintaining proper record of inventory but the closing inventory is recorded in the books of accounts on the basis of physically available inventory and no actual shortage/loss/ wastage is recorded.
As per the information and explanations given to us, the Company has not granted any loan, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013, therefore Clause 3(iii) (a)(b) and (c) of the Companies (Auditors Report) Order, 2016, are not applicable.
As per the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.
As per the information and explanation given to us, the Company has not accepted any deposit from the public in terms of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013, and the Rules framed there under. Thus, the directives of Reserve Bank of India and provisions of Clause 3 (v) of the Companies (Auditors Report) Order, 2016, are not applicable.
As per the information and explanation given to us, maintenance of cost records has not been prescribed by the Central Government under Sub-section (1) of Section 148 of the Companies Act, 2013.
vii) (a) In our opinion the Corporation is generally regular in depositing undisputed statutory dues including Provident Fund, Income-Tax, Sales-Tax, Service-Tax, customs duty, excise duty, value-added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of arrears of outstanding statutory dues as at the last day of financial year concerned for a period of more than six months from the date they became payable, are given below:
Name of the Unit |
Nature of Dues |
Amount (Rs. in lakh) |
Period to which the Amount Relates |
Ashok Institute of Hospitality £t Tourism Management |
EPF |
0.21 |
More than 6 months |
Vigyan Bhawan |
ESI |
4.78 |
More than 6 months |
Hyderabad House |
ESI |
1.71 |
More than 6 months |
(b) Cess, dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute:
viii) According to the information and explanations given to us, the Company has not taken any loan from any financial institution, Bank or issued any debentures till the end of financial year. Hence, the provisions of Clause 3(viii) of the Companies (Auditors Report) Order, 2016, regarding reporting on default in repayment of dues to financial institution or bank or debenture is not applicable.
Name of the Statute/Unit |
Nature of Dues |
Amount (Rs. in lakh) |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Hotel Patliputra Ashok, Patna |
Bihar VAT |
3.09 |
Earlier Years |
JCCT, Patna |
Ashok International Trade Division |
Custom Duty |
18,478.67 |
2004-05 |
CESTAT |
Ashok International Trade Division |
Custom Duty |
42.17 |
2003 |
Committee of Dispute |
Ashok International Trade Division |
Sales/VAT |
2,465.62 |
1995-08 |
Commissioner Appeals |
Ashok Events |
Service Tax |
39.65 |
2006-2009 |
Additional Commissioner of Service Tax |
Kalinga |
Excise Duty |
13.33 |
2002-03 |
High Court, Odisha |
Kalinga |
Service Tax |
52.91 |
Earlier Years |
Additional Director General, DGCEI, Kolkata |
Taj Restaurant |
Trade Tax |
0.50 |
30.09.2002 |
Department of VAT |
Taj Restaurant |
Trade Tax |
0.79 |
12.02.2003 |
Department of VAT |
Hotel Ashok |
Service Tax |
701.93 |
Earlier Years |
CESTAT, Delhi |
LMPH |
Service Tax |
16.48 |
29.03.2016 |
Commissioner of Central Excise, Mysore |
ix) According to the information provided and explanations given to us, no moneys have been raised by way of initial public offer or further public offer (including debt instruments) nor any term loan from any bank or financial institutions. Thus provisions of Clause 3 (ix) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
As per the information provided and explanation given to us, no fraud by or on the Company by its officers or employees has been noticed or reported during the year.
As per the information and explanation given to us the provisions of Section 197 read with Schedule V to the Companies Act, 2013, are not applicable on Government Company. Thus, the provisions of Clause 3 (xi) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
The Company is not a Nidhi Company, so the provisions of Clause 3 (xii) of the Companies (Auditors Report) Order, 2016, are not applicable
According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013, and wherever applicable the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
According to the information and explanations provided to us, the Company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review so, the requirement of Section 42 of the Companies Act, 2013, are not applicable on it; therefore Clause 3 (xiv) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him, therefore Clause 3 (xv) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
xvi) According to information and explanations given to us, the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act, 1934, therefore Clause 3 (xvi) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.
âAnnexure Bâ to Independent Auditorâs Report of even date on the Financial Statements of India Tourism Development Corporation Limited, New Delhi
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of India Tourism Development Corporation Limited, New Delhi, as of March 31, 2016, in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit and considering the reports of the branch auditors. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company generally has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ.
For Kishore 6t Kishore Chartered Accountants Firm Regn. No. : 000291N
(CAAnshu Gupta) Place: New Delhi Partner
Date: 30th May, 2016 M.No. 077891
Mar 31, 2015
1. Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
INDIA TOURISM DEVELOPMENT CORPORATION LIMITED which comprises the
Balance Sheet as at 31st March, 2015, the Statement of Profit & Loss,
the Cash Flow Statement, and a summary of the Significant Accounting
Policies and other explanatory information for the year then ended, [in
which are incorporated the Returns for the year ended on that date
audited by the branch auditors of the Company's branches at location of
the branches].
2. Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
3. Auditors' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial control system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
standalone financial statements.
4. Basis for Qualified Opinion
(a) The Corporation is due Rs. 1,332.57 lakh as at 31.03.2015 (Rs.
1,315.92 lakh up to 31.03.2014) from certain subsidiary Companies
(which have significant accumulated losses) on account of services
rendered and funds advanced to them (including interest thereon).
Besides the Corporation holds investments in the said subsidiaries
having a book value as at 31.03.2015 of Rs. 1,060.58 lakh (Previous
Year Rs. 1,060.58 lakh). The management has represented to us that
these investments are of long term nature and the shortfall/diminution
in their value is not permanent and that the intrinsic value of assets
owned by these companies is considerable to recover the dues and cost
of investments, though two of the companies are non-operational and the
present net worth of most of these companies is in the negative (Refer
Note Nos. 17(1) & 14A(1).
(b) Ashok Hotel, the unit of ITDC has not accounted the Service Tax
liability on monthly basis and Interest arising as a consequence
thereof as per provisions of a ailment and utilization of CENVAT credit
in respect of Reverse Charge and delay in raising of Invoices. In the
absence of any working, the impact thereof on the financial statements
cannot be ascertained and quantified.
(c) As per Section 143(3)(d) of the Companies Act, 2013, we are
reporting that Service Tax Returns and VAT Returns filled for the
relevant financial year do not matches with the Books of Accounts
respectively are under reconciliation.
(d) Ashok Hotel, the unit of ITDC has certain credit balances shown as
"Provision for Expenses" amounting to Rs. 674.94 lakh and debit
balances in "Sundry Contractors" amounting to Rs. 239.63 lakh, both are
subject to reconciliation/matching and confirmation. In view of the
pending reconciliation/matching and confirmation, we are not in a
position to ascertain and comment on the correctness of the outstanding
balances.
5. Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, the
aforesaid standalone financial statements give the information required
by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India,
of the state of affairs of the Company as at 31st March, 2015, and its
profit & loss and its cash flows for the year ended on that date.
6. Emphasis of Matter
1. As per Note No. 32(3) of General Notes, the units of ITDC has
calculated consumption of stock and stores, crockery, cutlery,
glassware and linen by taking opening balances, purchases and closing
balances. The value of losses/shortages/wastages has not been accounted
separately. Our opinion is not qualified in respect of this matter.
2. Ashok Hotel, the unit of ITDC has recognized a "Provision for
Doubtful Debts" amounting to Rs. 1,570.22 lakh as on March 31, 2015.
The unit has not written off bad debts which are pending since years,
which has resulted in inflated balance of 'Trade Receivables' &
'Provision for Doubtful Debtors' correspondingly in the Balance Sheet
as at March 31, 2015. Our opinion is not qualified in respect of this
matter.
3. As per the Rule 6(3A) of CENVAT Credit Rules, 2004 the Ashok Hotel,
the unit of ITDC was required to make short payment of amount if any,
equal to the proportionate CENVAT credit attributable to the exempted
output services provided to the units during the financial year. The
unit has not yet made the final assessment of the amount payable till
date since inception of this rule, as a consequence of which the unit
might be liable to pay interest @ 24% p.a. up to the date of actual
payment. In the absence of any working, the impact thereof on the
financial statements cannot be ascertained and quantified.
7. Other Matter
We did not audit the financial statements/ information of 34 branches
included in the standalone financial statements of the Company whose
financial statements/ financial information reflect total assets of Rs.
21,16,86,479.77 as at 31st March, 2015 and total revenues of Rs.
3,18,37,14,847.78 for the year ended on that date, as considered in the
standalone financial statements. The financial statements/information of
these branches have been audited by the branch auditors whose reports
have been furnished to us, and our opinion in so far as it relates to
the amounts and disclosures included in respect of these branches, is
based solely on the report of such branch auditors.
Our opinion is not qualified in respect of this matter.
8. Report on Other Legal and Regulatory Requirements
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, proper books of
account as required by law have been kept by the Company so far as it
appears from our examination of those books.
(b) The reports on the accounts of the branch offices of the Company
audited under Section 143 (8) of the Act by branch auditors have been
sent to us and have been properly dealt with by us in preparing this
report.
(c) The Balance Sheet, the Statement of Profit & Loss, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account and with the returns received from the branches not visited by
us.
(d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, the aforesaid
standalone financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(e) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
(f) Being a Government company, pursuant to notification no GSR 29(E)
dated 21/10/2003 issued by Government of India, Provision of
Sub-section (2) of Section 164 of the Companies Act, 2013, are not
applicable to the Corporation.
(g) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
(h) With respect to the other matters to be included in the Auditors'
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 31 to the
financial statements.
ii. The Company did not have any long- term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. No amount is required to be transferred, to the Investor Education
and Protection Fund by the Company.
Annexure Referred to in our Report of even date on the Accounts of
India Tourism Development Corporation Limited for the Year ended 31st
March, 2015
1. Fixed Assets
(a) The Corporation has generally maintained proper records showing
full particulars, including quantitative details and situation of fixed
assets except at few branches/ units where records were incomplete in
respect of quantitative details and situation etc.
(b) The fixed assets are reported to have been physically verified by the
management generally at the year end / reasonable intervals. In most of
the branches / units and the head office, the book balance and physical
balances have not been reconciled and hence, the discrepancies, if any,
have not been ascertained for necessary adjustments in the books of
account.
2. Inventories
(a) The inventory has been physically verified by the management
generally once in a year except at few branches / units where
verification has been conducted at the end of every half year. Some of
the branch auditors have reported that though the inventory has been
physically verified the frequency of verification is inadequate/ not
reasonable and needs to be increased in view of the size and nature of
the inventory.
(b) The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the Corporation and the nature of its business.
(c) The Corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were not maintained. The discrepancies
noticed on physical verification between the physical stocks and the
book records were not material.
3. Loans Taken
(a) The Corporation has neither taken for granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under Section 189 of the Companies Act, 2013.
4. Internal Control
In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Corporation and the nature of its business with regard
to the purchase of inventory, fixed assets and with regard to the sale
of goods and rendering of services except at some branches wherein the
branch auditors have reported, that the evaluation of the prevailing
internal control structure and its operation disclosed weak internal
control systems and which is not adequate and commensurate with the
size of the branch and the nature of its business, with regard to
purchase of inventory and recording, purchase of fixed assets, sale of
goods and services, purchase and consumption of raw materials, cost of
services rendered, stores, stocks, issuance of material and which need
to be improved / strengthened.
5. PUBLIC DEPOSITS
The Corporation has not accepted any deposit from public in terms of
Section 73 to 76 or any other relevant provisions of the Companies Act,
2013 and rules made thereunder.
6. COST RECORDS
As informed to us maintenance of cost Records has not been prescribed
by the Central Government under Sub-section (1) of Section 148 of the
Companies Act, 2013.
7. STATUTORY DUES
(a) In our opinion the Corporation is generally regular in depositing
undisputed statutory dues including Provident Fund, Employee's State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of
customs, duty of excise, value added tax, Cess and other statutory dues
with the appropriate authorities and if not, the extent of the arrears
of outstanding statutory dues as at the last day of the financial year
concerned for a period of more than six months from the date they
become payable, are given below:
Name of the Nature of Amount Period to
Statute/Unit Dues (Rs. in which the
lakh) Amount Relates
ESI, Vigyan Bhawan ESI 4.79 More than six months
ESI, Hyderabad House ESI 1.72 More than six months
ESI, Ashok Hotel ESI 0.445 More than
New Delhi six months
EPF, Ashok Hotel EPF 1.87 More than
New Delhi six months
(b) Cases, dues of income tax or sales tax or wealth tax or service tax
or duty of customs or duty of excise or value added tax or cess have
not been deposited on account of any dispute:
Name of the Nature of Dues Amount
Statute/Unit (Rs. in lakh)
ESI, Hotel Patliputra Ashok, ESI 0.670
Patna
Service Tax, Ashok Hotel, Service Tax 330.91
New Delhi
ESI, Ashok Hotel, New Delhi ESI 641.90
The Delhi Sales Tax Act, 1975 Local Sales Tax 150.25
The Central Sales Central Sales Tax 3.02
Tax Act, 1956
Andhra Pradesh Local Sales Tax 327.15
VAT Act, 2005
The Delhi Tax on Luxury Tax 42.58
Luxuries Act, 1996
The Income Tax Act, 1961 Income Tax 337.49
17.59
386.91
458.25
49.93
Finance Act, 2014 Service Tax 39.65
Ashok Event
Excise Duty, Kalinga Excise Duty 8.58
ESI, Kalinga ESI 1.45
Service Tax, Kalinga Service Tax 52.91
ESI, Hotel Samrat ESI 71.68
EPF, Hotel Samrat EPF 17.92
ESI, Hotel Janpath ESI 60.08
Custom Act, 1962 Custom Duty 18,478.67
Custom Act, 1962 Custom Duty 42.17
Maharashtra Sales Tax Act Sales Tax / VAT 2,465.62
Name of the Statute/Unit Period to which Forum where
the Amount Relates Dispute is Pending
ESI, Hotel Patliputra Ashok,
Patna Earlier Years Labour Court
Service Tax, Ashok Hotel,
New Delhi Earlier Years CESTAT, Delhi
ESI, Ashok Hotel, New Delhi Earlier Years High Court of Delhi
The Delhi Sales Tax Act, 1975 1990 to 2007 Various Authorities
The Central Sales Tax Act,
1956 1987 to 2002 Various Authorities
Andhra Pradesh Vat Act, 2005 2005 to 2007 Hyderabad High Court
The Delhi Tax on Luxuries
Act, 1996 2001-02 & Assistant
Commissioner
2002-03 of Luxury Tax
The Income Tax Act, 1961 1992-93 Income Tax Appellate
Tribunal
1995-96 Delhi High Court
2006-07 ITAT
2007-08 CIT (A)
2009-10 CIT (A)
Finance Act, 2014 2006 to 2009 Additional
Commissioner of
Service Tax
Excise Duty, Kalinga 2002-03 High Court, Odisha
ESI, Kalinga Earlier Years Distt. Court, Khurda
Service Tax, Kalinga Earlier Years Addl. Director
General, DGCEI,
Kolkata
ESI, Hotel Samrat 01.10.1997 to High Court of Delhi
31.03.2000
EPT, Hotel Samrat 1982 to 1985 Supreme Court of
India
ESI, Hotel Janpath 1998-2003 High Court of Delhi
Custom Act, 1962 2004-05 CESTAT
Custom Act, 1962 2003 Committee of Disputes
Maharashtra Sales Tax Act 1995-2008 Commissioner Appeals
(c) No amount is required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act and Rules made there under.
8. Even after considering the effects of quantified qualifications, in
our opinion, the Corporation does not have accumulated losses. The
Corporation has not incurred cash loss during the financial year covered
by our audit and has incurred cash loss in the immediately preceding
financial year. However, the effect of resolution and quantification of
matters reported / of un-quantified qualifications and others reported in
the main Audit Report, which may in some cases be significant, have not
been taken into consideration, as the amounts are not ascertainable.
9. According to the information and explanations given to us and based
on the documents and records produced to us, the Corporation has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
10. According to the information and explanations given to us, the
Corporation has given guarantee for loans taken by a subsidiary Hotel
Brahmaputra Ashok, from banks or financial institutions, the terms and
conditions whereof may prejudicial to the terms of the Company.
11. According to information and explanation given to us, the
Corporation has not obtained any term loan.
12. During the course of our examination of the books and records of
the Corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For V.K. Verma & Co.
Chartered Accountants
(FRN.000386N)
CA Vivek Kumar
Place: New Delhi (Partner)
Date: 29.05.2015 Membership No. 503826
Mar 31, 2014
We have audited the attached Balance sheet of India Tourism Development
Corporation Limited, New Delhi as at 31st March, 2014, the Statement of
Profit and Loss and also the Cash Flow Statement for the year ended on
that date annexed thereto, in which are incorporated the accounts of
the Head Office and 4 units/branches audited by us and 35 units/
branches audited by respective branch auditors appointed by the
Comptroller and Auditor General of India.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance of the Company in accordance with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial Statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management,
as well as evaluating the overall presentation of the financial
statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis of Qualified Opinion
i. The corporation is due Rs 1315.92 Lakhs as at 31.03.2014 (Rs
1,413.96 Lakhs upto 31.03.2013) from certain subsidiary Companies
(which have significant accumulated losses) on account of services
rendered and funds advanced to them (including interest thereon).
Besides the corporation holds investments in the said subsidiaries
having a book value as at 31.03.2014 of Rs. 1060.58 Lakhs (Previous
Year Rs 759.70 Lakhs). The management has represented to us that these
investments are of long term nature and the shortfall/diminution in
their value is not permanent and that the intrinsic value of assets
owned by these companies is considerable to recover the dues and cost
of investments, though two of the companies are non-operational and the
present net worth of most of these companies is in the negative (Refer
Note No''s. 17(1) & 14A(1)).
Emphasis of Matter
Without qualifying our opinion, we further report that:
1. As per the auditors of Units having name Duty Free Shop- Goa and
Sea Port , Management did not provide to the auditor the details of
movement of stock with rate and amount, giving details of item
descriptions lying on 31st March, 2014. However, Management explained
to the auditor that inventories of the company have been physically
verified by the management at the year end and also the inventory lying
at the unit has been physically verified by the internal auditor and as
reported by him, the inventory was found to be correct as per the book
balance, on the day of physical verification.
2. As per the auditor of Vigyan Bhawan The unit has provided an amount
of Rs. 4,00,000/- for electricity and water charges on assumption basis.
The total liability towards electricity & water charges since the
inception of the unit is Rs. 59,34,305/- payable to Directorate of
Estate is subject to confirmation. In the absence of requisite details
thereof and supporting documents, we cannot comment thereon
3. Non-disclosure of complete details pertaining to transactions
entered into during the year with related parties-Accounting Standard-18
-Related Party Disclosure.
4. Non-disclosure of details required in respect of operating leases
entered into by the Corporation. [Point No. 11 of General Note 32] -
Accounting Standard-19 Leases.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, Except for the matter described in the basis
for Qualified Opinion paragraph, the financial statement gives the
information required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:-
i) in the case of balance sheet, of the state of affairs of the
Corporation as at 31st March, 2014,
ii) in the case statement of profit & loss, of the profit for the year
ended on that date, and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
We further report that:
i. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii. In our opinion the Company has kept proper books of account as
required by law so far as appears from our examination of those books.
iii. The Balance Sheet, Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account,
a. Except for the matter described in the Basis of Qualified Opinion
paragraph and emphasis of matter, in our opinion, the Balance Sheet,
Statement of Profit and Loss comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956;
b. Provisions of clause (g) of sub section (1) of section 274 of the
Companies Act, 1956 are not applicable to the Government Company in
terms of GSR 829(E) dated 21st October, 2003 issued by Government of
India, Department of Company affairs.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR
ENDED 31st MARCH, 2014.
1. (a) The corporation has generally maintained proper records showing
full particulars,
including quantitative details and situation of fixed assets except at
few branches / units where records were incomplete in respect of
quantitative details and situation etc.
(b) The fixed assets are reported to have been physically verified by
the management generally at the yearend / reasonable intervals. In most
of the branches / units and the head office, the book balance and
physical balances have not been reconciled and hence, the
discrepancies, if any, have not been ascertained for necessary
adjustments in the books of account.
(c) The corporation has not disposed off substantial portion of its
fixed assets during the year
and hence going concern assumption is not affected.
2. (a) The inventory has been physically verified by the management
generally once in a year except at few branches / units where
verification has been conducted at the end of every half year. Some
of the branch auditors have reported that though the inventory has
been physically verified the frequency of verification is inadequate/
not reasonable and needs to be increased in view of the size and
nature of the inventory.
(b) The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the corporation and the nature of its business Some of the
branch auditors have reported that the procedures of physical
verification of inventories need to be strengthened and provision made
for evaporation loss / obsolescence for dead stock of stores / spares /
provisions, crockery & cutlery items and stationery items.
(c) The corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were not maintained. The discrepancies
noticed on physical verification between the physical stocks and the
book records were not material except at some branches where such
discrepancies could not be ascertained in the absence of proper records
of inventory. However, since the consumption of these stocks, stores,
crockery, cutlery etc. had been worked out by taking opening balance,
purchases and closing balance based on physical inventories, the value
of shortages etc. has not been ascertained and shown separately..
3. The Corporation has neither taken nor granted any loans, secured or
unsecured from / to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly provisions of clauses 4(iii) (b), (c), (d), (e), (f) and
(g) of the said order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Corporation and the nature of its business with
regard to the purchase of inventory, fixed assets and with regard to
the sale of goods and rendering of services except at some branches
wherein the branch auditors have reported, that the evaluation of the
prevailing internal control structure and its operation disclosed weak
internal control systems and which is not adequate and commensurate
with the size of the branch and the nature of its business, with regard
to purchase of inventory and recording, purchase of fixed assets, sale
of goods and services, purchase and consumption of raw materials, cost
of services rendered, stores, stocks, issuance of material and which
need to be improved / strengthened.
5. (a) According to the information and explanations given to us, we
are of the opinion that there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956.
(b) Not applicable in view of para (a) above.
6. The Corporation has not accepted any deposits from public in terms
of Sections 58A and 58AA of the Companies Act, 1956 and the rules made
there under.
7. In our opinion, the Corporation has an internal audit system, which
is generally commensurate with the size and nature of its business.
However, as reported by some of the branch auditors and in units
audited by us, the coverage of internal audit needs to be enlarged to
cover all areas of operation including timely submission and follow up
of the reports.
8. As informed to us, the Central Government has not prescribed
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956.
9. (a) In our opinion the Corporation is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it except as reported by some of the branch auditors
regarding irregularity in deposit / non-deposit of undisputed statutory
dues.
According to the information and explanations given to us and as
reported by the branch auditors in their reports, the undisputed
amounts payable in respect of outstanding statutory dues that were in
arrears, as on 31.03.2014 for a period of more than six months from the
date they became payable are given below :
Name of the Statute, Unit Nature of dues Amount Period to which the
(in lacs) amount relates
ESI, Vigyan Bhawan , ESI 4.79 More than
six months
ESI, Hyderabad House ESI 1.72 More than
six months
ESI, Ashok Hotel,
New Delhi ESI 0.445 More than
six months
EPF, Ashok Hotel,
New Delhi EPF 1.87 More than
six months
(b) According to the information & explanations given to us and as
reported by the branch auditors in their reports, dues of Provident
Fund, Investor Education and Protection Fund, Employee''s State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and Cess that have not been deposited on account of
disputes are given below:
Name of the Nature of dues Amount Period to
Statute/Unit (in lacs) which the
amount relates
ESI, Ashok Hotel ESI 501.79 Earlier Years
New Delhi_
Service Tax, Service Tax 330.91 Earlier Years
Ashok Hotel New
Delhi_
The Delhi Sales Local Sales Tax 150.25 1990 to 2007
tax Act, 1975_
The Central Sales Central Sales 3.02 1987 to 2002
Tax Act, 1956Tax
Andhra Pradesh Local Sales Tax 327.15 2005 to 2007
VAT Act, 2005_
The Delhi Tax on Luxury Tax 42.58 2001-02 &
Luxuries Act, 2002-03
1996
The Income Tax Income Tax 337.49 1992-93,
Act, 1961
17.59 1995-96
845.16 2006-07 &
2007-08
Finance Act, Service Tax 39.65 2006 to 2009
2014, Ashok
Event_
Excise Duty, Excise Duty 13.33 2002-03
Kalinga_
ESI, Kalinga ESI 1.45 Earlier Years
Service Tax Service Tax 52.9 Earlier Years
ESI, Hotel Samrat ESI 71.68 01.10.1997 to
31.03.2000_
EPF, Hotel Samrat EPF 17.92 1982 to 1985
Bihar VAT Act, VAT 3.09 Earlier Years
Patliputra Ashok
ESI, Hotel Janpath ESI 60.08 1998-2003_
Custom Act, 1962 Custom Duty 18478.67 2004-05
Custom Act, 1962 Custom Duty 42.17 2003
Maharashtra Sales Sales Tax / VAT 2465.62 1995-2008
tax Act
Name of the Statue/Unit Forum Where dispute is Pending
ESI, Ashok Hotel High Court of Delhi
New Delhi
Service Tax, CESTAT, Delhi
Ashok Hotel New
Delhi
The Delhi Sales Various Authorities
tax Act, 1975
The Central Sales Various Authorities
Tax Act, 1956
Andhra Pradesh Hyderabad High Court
VAT Act, 2005
The Delhi Tax on Assistant Commissioner of Luxury Tax
Luxuries Act,
1996
The Income Tax Income Tax Appellate Tribunal
Act, 1961
Delhi High Court
ITAT of CIT (A)
Finance Act, Additional Commissioner of Service Tax
2014, Ashok
Event
Excise Duty, High Court,Orissa
Kalinga
ESI, Kalinga Dist. Court, Khurda
Service Tax Addl.Director General,DGCEI, Kolkatta
ESI, Hotel Samrat High Court of Delhi
EPF, Hotel Samrat Supreme Court of India
Bihar VAT Act, JCCT, Patna
Patliputra Ashok
ESI, Hotel Janpath High Court of Delhi
Custom Act, 1962 CESTAT
Custom Act, 1962 Committee of Disputes
Maharashtra Sales Commissioner Appeals
tax Act
10. Even after considering the effects of quantified qualifications, in
our opinion, the Corporation does not have accumulated losses. The
Corporation has not incurred cash loss during the financial year
covered by our audit and has incurred cash loss in the immediately
preceding financial year. However, the effect of resolution and
quantification of matters reported / of un-quantified qualifications
and others reported in the main Audit Report, which may in some cases
be significant, have not been taken into consideration, as the amounts
are not ascertainable.
11. Based on our audit procedures and as per the information and
explanations given to us by the management, the Corporation has no dues
towards banks, financial institutions or debenture holders, and, hence,
provisions of clause 4(xi) of the Order are not applicable to the
corporation., .
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Corporation is not a chit fund or a nidhi
mutual benefit fund / society.
14. According to the information and explanations given to us, the
Corporation is not dealing in shares, securities and other investments.
The investments in the shares of subsidiary companies are held by the
Corporation in its own name and are not traded.
15. Except for a guarantee of Rs. 331.44 lakhs (including interest)
provided against loans obtained by a subsidiary company in the earlier
year, and which is continuing, the Corporation has not given guarantees
during the year for loans taken by others from banks or financial
institutions. Further, the terms and conditions on which the
corporation had given guarantees for loans taken by others from bank or
financial institutions are not prima facie prejudicial to the interest
of the Corporation.
16. Based on information and explanations given to us by the
management, no term loans have been raised by the corporation during
the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
18. The Corporation has not made any allotment of shares during the
year under audit; hence this clause is not applicable to the
Corporation.
19. The Corporation has not issued any debentures; hence this clause
is not applicable to the Corporation.
20. The Corporation has not raised money by public issues during the
year under audit; hence this clause is not applicable to the
Corporation.
21. During the course of our examination of the books and records of
the corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For V.K. Verma & Co.
Chartered Accountants
(FRN.000386N)
Sd/-
Place:New Delhi Vivek Kumar
Date: 14th August,2014 (Partner)
MembershipNo. 503826
Mar 31, 2013
Report on the Financial Statements
We have audited the attached Balance sheet of India Tourism Development
Corporation Limited, New Delhi as at 31st March, 2013, the Statement of
Proft & Loss and also the Cash Flow Statement for the year ended on
that date annexed thereto, in which are incorporated the accounts of
the Head Offce and 4 units/branches audited by us and 34 units/
branches audited by respective branch auditors appointed by the
Comptroller and Auditor General of India.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance of the Company in accordance with the Accounting
Standards referred to in Sub- section (3C) of Section 211 of the
Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the fnancial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these fnancial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the fnancial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial Statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Basis for Qualifed Opinion
i) Lease charges in respect of land of Hotel Samrat not having been
amortised over the lease period or over the reasonable period, as
required by AS-6 on ''Depreciation Accounting''. In absence of the
supporting documents, its effect on the accounts is indeterminate.
[Refer Note No. 11].
ii) There are demands of Rs. 536.65 lakh (Previous Year Rs. 510.19 lakh)
from ESI authorities in respect of ESI dues, which are being disputed
by the Corporation and not provided for. We are unable to comment on
the extent of liability that may devolve upon the Corporation and
impact the fnancial statements on resolution, of legal proceedings
(Refer Note No. 31(F)).
iii) The Corporation is due Rs. 1,413.96 lakh as at 31.03.2013 (Rs.
1,377.85 lakh upto 31.03.2012) from certain subsidiary Companies (which
have signifcant accumulated losses) on account of services rendered and
funds advanced to them (including interest thereon). Besides the
Corporation holds investments in the said subsidiaries having a book
value as at 31.03.2013 of Rs. 759.70 lakh (Previous Year Rs. 729.10 lakh).
The management has represented to us that these investments are of long
term nature and the shortfall/ diminution in their value is not
permanent and that the intrinsic value of assets owned by these
companies is considerable to recover the dues and cost of investments,
though some of the companies are non-operational and the present net
worth of most of these companies is in the negative. The adjustment
that may arise cannot be quantifed at this stage. (Refer Note Nos.
17(1) & 14A(1)).
Qualifed Opinion
In our opinion and to the best of our information and according to the
explanations given to us,
Except for the matter described in the basis for Qualifed Opinion
paragraph, the fnancial statement gives the information required by the
Companies Act, 1956 in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:-
i) in the case of Balance Sheet of the state of affairs of the
Corporation as at 31st March, 2013,
ii) in the case statement of Proft & Loss, of the proft for the year
ended on that date.
iii) In the case of Cash Flow statement, of the Cash Flows for the year
ended on that date.
Emphasis of Matter
Without qualifying our opinion, we further report that:
1) Non-disclosure of complete details pertaining to transactions
entered into during the year with related parties-Accounting
Standard-18- Related Party Disclosure.
2) Non-disclosure of details required in respect of operating leases
entered into by the Corporation. [Point No.10 of General Note 32] -
Accounting Standard-19 - Leases.
3) The Vigyan Bhawan has provided Rs. 4 lakh for electricity and water
charges on assumption basis. The total liability towards electricity &
water charges since the inception of the unit is Rs. 55.34 lakh payable
to Directorate of Estate is subject to confrmation. In the absence of
the requisite details thereof and the supporting documents, we cannot
comment thereon.
4) The Hotel Janpath has accumulated total liability of Rs. 78.51 lakh
towards annual lease payable @ Rs. 4.09 lakh to Ministry of Tourism. We
are unable to comment on the additional fnancial burden on the unit in
the future due to non-availability of supporting documents.
5) The personnel staff employed by the Samrat Hotel and Janpath Hotel
is not equipped with the latest information technology, changes in tax
law of the country, standards prescribed by the professional bodies and
the other corporate and legal changes required for the day to day
functioning of the unit.
6) Balance in Trade Receivables, Loans and Advances, Deposits and Trade
Payables accounts are subject to
independent confrmation and reconciliation in some of the cases.
[Refer Note No. 1)of General Note No.32]
7) In respect of Ashok Hotel, as per the Rule 6(3A) of Cenvat Credit
Rules, 2004, the unit was required to make short payment of amount if
any, equal to the proportionate Cenvat credit attributable to the
exempted output service provided during the year up to 30th June, 2013.
The unit has not yet made the fnal assessment of the amount payable if
any as a consequence of which the unit might be liable to pay interest
@ 24% p.a. up to the date of actual payment;
8) The Ashok Hotel has calculated consumption of stock and stores,
crockery, cutlery, glassware and linen by taking opening balances,
purchases and closing balances. The value of losses/shortages/wastages
has not been accounted separately.
9) In Ashok Hotel, instances of violation of the laid down terms and
conditions of the licence agreement by licensee Mayer Health Resorts
Limited. The licensee is in unauthorized occupation of premises beyond
the prescribed limits as stipulated in the agreement for which the Unit
management has taken steps for recovery based on the joint measurement
done in the year.
However, in respect of occupation done after the said date, no steps
have been taken either for removal of unauthorized changes or for the
recovery of the charges.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2003 as amended
by Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the
Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, and on the basis of such examination of the books
and records of the Corporation as we considered appropriate and the
information and explanations given during the course of audit and after
considering the reports of unit/branch auditors, we enclose in the
Annexure a statement on the matters specifed in Paragraphs 4 and 5 of
the said Order.
As required by Section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) The Balance Sheet, Statement of Proft & Loss dealt with by this
Report are in agreement with the books of account.
d) Except for the matter described in the Basis for Qualifed Opinion
paragraph, in our opinion, the Balance Sheet, Statement of Proft & Loss
comply with the Accounting Standards referred to in Sub-section (3C) of
Section 211 of the Companies Act, 1956 ;
e) Provisions of Clause (g) of Sub-section (1) of Section 274 of the
Companies Act, 1956 are not applicable to the Government Company in
terms of GSR 829(E) dated 21st October, 2003 issued by Government of
India, Department of Company affairs.
Annexure Referred to in our Report of even date on the Accounts of
India Tourism Development Corporation Limited for the Year ended 31st
March, 2013
1. (a) The Corporation has generally maintained proper records showing
full particulars, including quantitative details and situation of fxed
assets except at few branches / units where records were incomplete in
respect of quantitative details and situation etc.
(b) The fxed assets are reported to have been physically verifed by the
management generally at the year end / reasonable intervals. In most of
the branches / units and the head offce, the book balance and physical
balances have not been reconciled and hence, the discrepancies, if any,
have not been ascertained for necessary adjustments in the books of
account.
(c) The Corporation has not disposed off substantial portion of its
fxed assets during the year and hence going concern assumption is not
affected.
2. (a) The inventory has been physically verifed by the management
generally once in a year except at few branches / units where
verifcation has been conducted at the end of every half year. Some of
the branch auditors have reported that though the inventory has been
physically verifed, the frequency of verifcation is inadequate/ not
reasonable and needs to be increased in view of the size and nature of
the inventory.
(b) The procedures of physical verifcation of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the Corporation and the nature of its business. Some of the
branch auditors have reported that the procedures of physical
verifcation of inventories need to be strengthened and provision made
for evaporation loss / obsolescence for dead stock of stores / spares /
provisions, crockery & cutlery items and stationery items.
(c) The Corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were not maintained. The discrepancies
noticed on physical verifcation between the physical stocks and the
book records were not material except at some branches where such
discrepancies could not be ascertained in the absence of proper records
of inventory. However, since the consumption of these stocks, stores,
crockery, cutlery etc. had been worked out by taking opening balance,
purchases and closing balance based on physical inventories, the value
of shortages etc. has not been ascertained and shown separately. In
this connection refer to our comment in Para 2(b) above also.
3. The Corporation has neither taken nor granted any loans, secured or
unsecured from / to companies, frms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly provisions of Clauses 4(iii) (b), (c), (d), (e), (f) and
(g) of the said order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Corporation and the nature of its business with
regard to the purchase of inventory, fxed assets and with regard to the
sale of goods and rendering of services except at some branches wherein
the branch auditors have reported, that the evaluation of the
prevailing internal control structure and its operation disclosed weak
internal control systems and which is not adequate and commensurate
with the size of the branch and the nature of its business, with regard
to purchase of inventory and recording, purchase of fxed assets, sale
of goods and services, purchase and consumption of raw materials, cost
of services rendered, stores, stocks, issuance of material and which
need to be improved / strengthened. There has been continuing failure
to correct major weaknesses in internal control systems, reported by
the internal auditors in the previous year on similar lines, at these
branches.
5. (a) According to the information and explanations given to us, we
are of the opinion that there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956.
(b) Not applicable in view of Para (a) above.
6. The Corporation has not accepted any deposits from public in terms
of Sections 58A and 58AA of the Companies Act, 1956 and the Rules made
thereunder.
7. In our opinion, the Corporation has an internal audit system, which
is generally commensurate with the size and nature of its business.
However, as reported by some of the branch auditors and in units
audited by us, the coverage of internal audit needs to be enlarged to
cover all areas of operation including timely submission and follow up
of the reports.
8. As informed to us, the Central Government has not prescribed
maintenance of cost records under Clause (d) of Sub-section (1) of
Section 209 of the Companies Act, 1956.
9. (a) In our opinion, the Corporation is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it except as reported by some of the branch auditors
regarding irregularity in deposit / non-deposit of undisputed statutory
dues.
According to the information and explanations given to us and as
reported by the branch auditors in their reports, the undisputed
amounts payable in respect of outstanding statutory dues that were in
arrears, as on 31.03.2013 for a period of more than six months from the
date they became payable are given below :
Name of the Nature of Amount Period to
Statute/Unit Dues (Rs.in which the
lakh) Amount
Relates
ESI, Vigyan Bhawan ESI 4.79 More than
Hyderabad House 1.72 six months
Ashok Hotel 0.396
EPF, Ashok Hotel EPF 1.87 More than
six months
(b) According to the information & explanations given to us and as
reported by the branch auditors in their reports, dues of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and Cess that have not been deposited on account of
disputes are given below:
Name of the Nature of Dues Amount
Statute/Unit (Rs.in lakh)
The Delhi Sales tax Local Sales Tax 150.25
Act, 1975
The Central Sales Tax Central Sales Tax 3.02
Act, 1956
Andhra Pradesh VAT Local Sales Tax 327.15
Act, 2005
Maharashtra Sales Tax Act Sales Tax 2,045.50
The Delhi Tax on Luxuries Luxury Tax 42.58
Act, 1996
Name Period to which Forum where
the Amount
Relates Dispute is Pending
The Delhi Sales tax 1990 to 2007 Various Authorities
The Cntral sales tax 1987 to 2002 Various Authorities
Andhral Pradesh VAT 2005 to 2007 Hyderabad High Court
Mahareshtra sales tax ACT 1995 to 2008 Commissioner Appeals
The Delhi Tax on Luxuries
ACT 1956 2001-02 &
2002-03 Assistant Commissioner
of Luxury Tax
Name of the Nature of Dues Amount
Statute/Unit (Rs.in lakh)
The Income Tax Act, 1961 Income Tax 475.14
Customs Act, Custom Duty 18,478.67
1962 Mumbai
Customs Act, Custom Duty 2.14
1962 Hyderabad
Provident Fund (PF) 1.14
Hotel Janpath
Hotel Samrat 17.92
Custom Act, Custom Duty 45.17
1962 Kolkata
Excise Duty, Excise Duty 13.33
Kalinga
Employees'' State ESI
Insurance
Hotel Janpath 25.85
Ashok Hotel 479.59
Hotel Samrat 71.68
Vigyan Bhawan ESI 4.78
Employees'' State ESI 1.45
Insurance Kalinga
Employees'' State ESI 0.75
Insurance
Hotel Patliputra Ashok
Bihar VAT Act Local Sales Tax 3.09
Hotel Patliputra Ashok
Service Tax Act, 1994 Service Tax
Ashok Hotel 325.60
ARMS 39.65
Name Period to which Forum where
the Amount
Relates Dispute is Pending
The Income Tax Act, 1961 1992-93 Income Tax Appellate
Tribunal
1995-96 Delhi High Court
2005-06 CIT (A)
2008-09 ITAT
Customs Act, 2004 to 2005 CESTAT
Customs Act, 2006-07 Committee on
Disputes
Provident Fund 1988-89 Delhi High Court
Hotel Samrat 1982-85 Supreme Court of
India
Custom Act, 2003 Committee on
Disputes
Excise Duty, 2002-03 High Court, Odisha
Employees'' State Earlier Years High Court of Delhi
Employees'' State Earlier Years Distt. Court, Khurda
Earlier Years Labour Court
Earlier Years JCCT, Patna
Service Tax Act, 1994 Earlier Years CESTAT, Delhi
Service Tax Act, 1994 2010-11 Addl. Commissioner
of Service Tax
10. Even after considering the effects of quantifed qualifcations, in
our opinion, the Corporation does not have accumulated losses. The
Corporation has not incurred cash loss during the fnancial year covered
by our audit and has incurred cash loss in the immediately preceding
fnancial year. However, the effect of resolution and quantifcation of
matters reported / of un-quantifed qualifcations and others reported in
the main Audit Report, which may in some cases be signifcant, have not
been taken into consideration, as the amounts are not ascertainable.
11. Based on our audit procedures and as per the information and
explanations given to us by the management, the Corporation has no dues
towards banks, fnancial institutions or debenture holders, and, hence,
provisions of Clause 4(xi) of the Order are not applicable to the
Corporation.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Corporation is not a chit fund or a Nidhi
Mutual Beneft Fund / Society.
14. According to the information and explanations given to us, the
Corporation is not dealing in shares, securities and other investments.
The investments in the shares of subsidiary companies are held by the
Corporation in its own name and are not traded.
15. Except for a guarantee of Rs. 312.93 lakh (including interest)
provided against loans obtained by a subsidiary company in the earlier
year, and which is continuing, the Corporation has not given guarantees
during the year for loans taken by others from banks or fnancial
institutions. Further, the terms and conditions on which the
Corporation had given guarantees during earlier years for loans taken
by others from bank or fnancial institutions are not prima facie
prejudicial to the interest of the Corporation.
16. Based on information and explanations given to us by the
management, no term loans have been raised by the Corporation during
the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
18. The Corporation has not made any allotment of shares during the
year under audit, hence this clause is not applicable to the
Corporation.
19. The Corporation has not issued any debentures, hence this clause
is not applicable to the Corporation.
20. The Corporation has not raised money by public issues during the
year under audit, hence this clause is not applicable to the
Corporation.
21. During the course of our examination of the books and records of
the Corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For V.K. Verma & Co.
Chartered Accountants
(FRN.000386N)
Vivek Kumar
Place: New Delhi (Partner)
Date: 04.09.2013 Membership No. 503826
Mar 31, 2012
1. We have audited the attached Balance sheet of India Tourism
Development Corporation Limited, New Delhi as at 31st March, 2012, the
Statement of Profit and Loss account and also the Cash Flow Statement
for the year ended on that date annexed thereto, in which are
incorporated the accounts of the Head Office and 4 units/branches
audited by us and 32 units/ branches audited by respective branch
auditors appointed by the Comptroller and Auditor General of India.
These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956, and on the basis of such examination of the
books and records of the Corporation as we considered appropriate and
the information and explanations given during the course of audit and
after considering the reports of unit/branch auditors, we enclose in
the Annexure a statement on the matters specified in Paragraphs 4 and 5
of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) There are demands of Rs 510.19 Lakhs (Previous Year Rs 488.01
Lakh;;) from ESI authorities in respect of ESI dues, which are being
disputed by the Corporation and not provided for (Refer Note No.
31(F)).
ii) The corporation is due Rs 1377.85 Lakhs as at 31.03.2012 (Rs
1,306.96 Lakhs upto 31.03.2011) from certain subsidiary Companies
(which have significant accumulated losses) on account of services
rendered and funds advanced to them (including interest thereon).
Besides the corporation holds investments in the said subsidiaries
having a book value as at 31.03.2012 of Rs.729.10 Lakhs (Previous Year
Rs 729.10 Lakhs). The management has represented to us that these
investments are of long term nature and the shortfall/diminution in
their value is not permanent and that the intrinsic value of assets
owned by these companies is considerable to recover the dues and cost
of investments, though some of the companies are non-operational and
the present net worth of most of these companies is in the negative
(Refer Note No's. 17(1) & 14A(1)).
iii) Lease Rent / registration fee / ground rent / depreciation due to
non- finalization of terms ofpurchase / lease / title deeds of land and
buildings have not been provided for. [Refer Note No. 11]
iv) Pending reconciliation / receipt of detailed statement of accounts
from NBCC, provision has not been made for interest payable to /
recoverable from and amount due from NBCC pertaining to Iraq Project.
Effect on the accounts on due receipt / adjustment / accounting thereof
cannot be indicated at this stage. [Refer Note No 2 & 3 of General Note
No. 32]
v) Balance in Trade Receivables, Loans and Advances, Deposits and Trade
Payables accounts are subject to independent confirmation and
reconciliation in some of the cases. [Refer Note No. 1 of General Note
No. 3 2] '
5. Without qualifying our opinion, we further report that: '
i) Provision for Property tax of Rs. 240.83 lakhs is standing in the
books of The Ashok Hotel as on 31.03.2012 out of this Rs. 62.01 lakhs
is seems to be excess provision made, which is pending assessment
proceedings;
ii) The Ashok Hotel is showing an Amount of Rs. 17,05,250/- (Dr.) in
the Loans & Advances- Doubtful(othevs). However, there are no details
related to this amount present with the unit. Unit should write off
these amount as there is no details available for these assets;
iii) The Government of India had promulgated "The Micro, Small and
Medium Enterprises Development Act, 2006". As per the said act, the
Corporation is to identify the parties and pay them interest the
specified period if not paid. The corporation is in the process of
identifying the suppliers. In view of this, the liability for interest
could not be worked out.
6. Further to our comments in the annexure referred to in paragraph 3
and paragraph
5 and subject to our comments in paragraph 4 above, we further report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit except month wise movement of stock of DFS-Goa. In the absence of
which we could not reconcile stock reported as on 31s1 March, 2012 with
book records and its value.
b) In our opinion proper books of account, as required by law, have
been kept so far as appears from our examination of those books and
proper returns adequate for the purpose of our audit have been received
from the branch auditors in respect of the units / branches audited by
them;
c) The reports of the branch auditors on the accounts of units /
branches audited by them have been received and considered by us in
preparing this report after making such adjustments as we considered
necessary;
d) The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account and audited financial statements of the branches;
e) In our opinion, the balance sheet, statement of profit and loss and
cash flow statement dealt with by this report comply with Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except to the extent referred to hereunder :-
- Lease charges in respect of land of Hotel Samrat not having been
amortised. [Note No. 11] - Accounting Standard -6 - Depreciation
Accounting.
- Conversion of balance with foreign bank in Iraqi dinar at the rate
prevailing as on 31st March, 1991 instead of applying year end rates.
[Refer Note No. 18J - Accounting Standard-11- Accounting for Effect of
Changes in Foreign Exchange Rates
- Non-disclosure of complete details pertaining to transactions
entered into during the year with related parties-Accounting
Standard-18- Related Party Disclosure.
- Non-disclosure of details required in respect of operating leases
entered into by the Corporation. [Point No. 11 of General Note 32] -
Accounting Standard-19 - Leases.
From the available information, we are unable to quantify the impact on
the financial statements due to non-compliance of The Accounting
Standards referred to above.
f) The provisions of clause (g) of sub-section (1) of Section 274 of
the Companies Act, 1956, are not applicable to the Corporation in terms
of notification No. G.S.R. 829(E) dated 21st October, 2003 issued by
Government of India, Department of Company Affairs;
7. We further report that:-
a) We are unable to comment on the extent of liability that may devolve
upon the corporation and impact the financial statements on resolution,
of legal proceedings referred to in Para 4(i).
b) The adjustments that may arise pertaining to matters referred to in
Paras 4(ii), 4(iii), 4(iv), 4(v) which cannot be quantified at this
stage.
8. Subject to our comments in paragraphs 6(e) and 7 above, in our
opinion and to the best of our information and according to the
explanations given to us, the said accounts read with the accounting
policies and other notes, give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:-
i) in the case of balance sheet, of the state of affairs of the
Corporation as at 31st March, 2012,
ii) in the case statement of profit & loss, of the profit for the year
ended on that date, and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR
ENDED 31st MARCH, 2012.
1. (a) The corporation has generally maintained proper records showing
full particulars, including quantitative details and situation of fixed
assets except at few branches / units where records were incomplete in
respect of quantitative details and situation etc.
(b) The fixed assets are reported to have been physically verified by
the management generally at the yearend / reasonable intervals. In most
of the branches / units and the head office, the book balance and
physical balances have not been reconciled and hence, the
discrepancies, if any, have not been ascertained for necessary
adjustments in the books of account.
(c) The corporation has not disposed off substantial portion of its
fixed assets during the year and hence going concern assumption is not
affected.
2. (a) The inventory has been physically verified by the management
generally once in a year except at few branches / units where
verification has been conducted at the end of every half year. Some of
the branch auditors have reported that though the inventory has been
physically verified the frequency of verification is inadequate/ not
reasonable and needs to be increased in view of the size and nature of
the inventory.
(b) The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the corporation and the nature of its business Some of the
branch auditors have reported that the procedures of physical
verification of inventories need to be strengthened and provision made
for evaporation loss / obsolescence for dead stock of stores / spares /
provisions, crockery & cutlery items and stationery items.
(c) The corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were not maintained. The discrepancies
noticed on physical verification between the physical stocks and the
book records were not material except at some branches where such
discrepancies could not be ascertained in the absence of proper records
of inventory. However, since the consumption of these stocks, stores,
crockery, cutlery etc. had been worked out by taking opening balance,
purchases and closing balance based on physical inventories, the value
of shortages etc. has not been ascertained and shown separately. In
this connection refer to our comment in para 2(b) above also.
3. The Corporation has neither taken nor granted any loans, secured or
unsecured from / to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly provisions of clauses 4(iii) (b), (c), (d), (e), (f) and
(g) of the said order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Corporation and the nature of its business with
regard to the purchase of inventory, fixed assets and with regard to
the sale of goods and rendering of services except at some branches
wherein the branch auditors have reported, that the evaluation of the
prevailing internal control structure and its operation disclosed weak
internal control systems and which is not adequate and commensurate
with the size of the branch and the nature of its business, with regard
to purchase of inventory and recording, purchase of fixed assets, sale
of goods and services, purchase and consumption of raw materials, cost
of services rendered' stores, stocks, issuance of material and which
need to be improved / strengthened. There has been continuing failure
to correct major weaknesses in internal control systems, reported by
the internal auditors in the previous year on similar lines, at these
branches.
5. (a) According to the information and explanations given to us, we
are of the opinion that there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956.
(b) Not applicable in view of para (a) above.
6. The Corporation has not accepted any deposits from public in terms
of Sections 58A and 58AA of the Companies Act, 1956 and the rules made
there under.
7. In our opinion, the Corporation has an internal audit system, which
is generally commensurate with the size and nature of its business.
However, as reported by some of the branch auditors and in units
audited by us, the coverage of internal audit needs to be enlarged to
cover all areas of operation including timely submission and follow up
of the reports.
8. As informed to us, the Central Government has not prescribed
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956.
9. (a) In our opinion the Corporation is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other material
statutory dues applicable to it except as reported by some of the
branch auditors regarding irregularity in deposit / non-deposit of
undisputed statutory dues.
According to the information and explanations given to us and as
reported by the branch auditors in their reports, the undisputed
amounts payable in respect of outstanding statutory dues that were in
arrears, as on 31.03.2012for a period of more than six months from the
date they became payable are given below :
Name of the
Statute, Unit Nature of dues Amount Period to which the
(in lacs) amount relates
ESI, Vigyan Bhawan , ESI 4.79 More than six months
Hyderabad House 1.72
(b) According to the information & explanations given to us and as
reported by the branch auditors in their reports, dues of Provident
Fund, Investor Education and Protection Fund, Employee's State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and Cess that have not been deposited on account of
disputes are given below:
Name of the Nature of Amount Period to -Forum where
Statute/Unit dues (in lacs) which the dispute is Pending
amount
relates
The Delhi
Sales Local Sales 1839.83 1990 to 2007 Various
Authorities
tax Act, 1975 Tax
The Central Central
Sales 12.84 1987 to 2002 Various
Authorities
Sales Tax Act, Tax
1956
Andhra Pradesh Local Sales 327.15 2005 to 2007 Hyderabad High
VAT Act, 2005 Tax Court
Maharashtra Sales Tax 2045.50 1995 to 2008 Commissioner
Sales Tax Act Appeals
The Delhi Tax Luxury Tax 42.58 2001-02 & Assistant
on Luxuries
Act, 2002-03 Commissioner of
1996 Luxury Tax
The Income
Tax Income Tax 380.26 1992-93, Income Tax
Act, 1961 Appellate Tribunal
1994-95 & Delhi High Court
1995-96
2008-09 & ITAT of CIT (A)
2009-10
Customs Act, Custom Duty 18,480.11 1995 to 2008 CESTAT
1962 Mumbai
Customs Act, Custom Duty 2.14 2006-07 Committee on
1962 Hyderabad Disputes
Provident
Fund (PF)
Janpath 1.14 1988-89 Delhi High Court
Samrat 17.92 1982-85 Supreme Court of
India
Custom Act, Custom Duty 45.17 2003 Committee on
1962 Kolkata Disputes
Excise Duty, Excise Duty 13.33 2002-03 High Court,Orissa
Kalinga
Employees
State ESI
Insurance
Janpath 27.90 Earlier
Years High Court of
Delhi
Ashok 442.09
Samrat 21.91
IGIAR 11.04
Taj Restt 7.25
Employees
State ESI 1.45 Earlier
Years Dist. Court,Khurda
Insurance
Kalinga
Sales Tax,
Taj Sales Tax 0.85 Earlier
Years Sales Tax Tribunal
Restt.
Employees
State ESI 0.75 Earlier
Years Labor Court
Insurance
Hotel
Pataliputra
Ashok
Bihar VAT Act Local Sales 3.09 Earlier
Years JCCT, Patna
Hotel
Pataliputra Tax
Ashok
Service Tax Service Tax
Act, 1994
Ashok Hotel 16.47 Earlier
Years CESTAT, Delhi
ARMS 39.65 2010-11 Add. Commissioner
of Service Tax
10. Even after considering the effects of quantified qualifications,
in our opinion, the Corporation does not have accumulated losses. The
Corporation has not incurred cash loss during the financial year
covered by our audit and has incurred cash loss in the immediately
preceding financial year. However, the effect of resolution and
quantification of matters reported / of un-quantified qualifications
and others reported in the main Audit Report, which may in some cases
be significant, have not been taken into consideration, as the amounts
are not ascertainable.
11. Based on our audit procedures and as per the information and
explanations given to us by the management, the Corporation has no dues
towards banks, financial institutions or debenture holders, and, hence,
provisions of clause 4(xi) of the Order are not applicable to the
corporation.,.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Corporation is not a chit fund or a nidhi
mutual benefit fund / society.
14. According to the information and explanations given to us, the
Corporation is not dealing in shares, securities and other investments.
The investments in the shares of subsidiary companies are held by the
Corporation in its own name and are not traded.
15. Except for a guarantee of Rs. 294.36 lakhs (including interest)
provided against loans obtained by a subsidiary company in the earlier
year, and which is continuing, the Corporation has not given guarantees
during the year for loans taken by others from banks or financial
institutions. Further, the terms and conditions on which the
corporation had given guarantees during earlier years for loans taken
by others from bank or financial institutions are not prima facie
prejudicial to the interest of the Corporation.
16. Based on information and explanations given to us by the
management, no term loans have been raised by the corporation during
the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
18. The Corporation has not made any allotment of shares during the
year under audit, hence this clause is not applicable to the
Corporation.
19. The Corporation has not issued any debentures, hence this clause
is not applicable to the Corporation.
20. The Corporation has not raised money by public issues during the
year under audit, hence this clause is not applicable to the
Corporation.
21. During the course of our examination of the books and records of
the corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For V.K. Verma & Co.
Chartered Accountants
(FRN.000386N)
Vivek Kumar
(Partner)
Membership No. 505826
Place: New Delhi
Date: 31/08/2012
Mar 31, 2010
1. We have audited the attached balance sheet of India Tourism
Development Corporation Limited, New Delhi as at 31st March, 2010, the
profit and loss account and also the cash flow statement for the year
ended on that date annexed thereto, in which are incorporated the
accounts of the Head Office and 4 units/branches audited by us and 34
units/ branches audited by respective branch auditors appointed by the
Comptroller and Auditor General of India. These financial statements
are the responsibility of the Corporations management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion,
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report) (Amendment) Order, 2004, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, and on the basis of such examination of the books
and records of the Corporation as we considered appropriate and the
information and explanations given during the course of audit arid
after considering the reports of unit/branch auditors, we enclose in
the Annexure a statement on the matters specified in Paragraphs 4 and 5
of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) There are demands ofRs 465.81 Lakhs (Previous Year Rs 436.60 Lakhs)
from ESI authorities in respect of ESI dues, which are being disputed
by the Corporation and not provided for (Refer Note Nos. 2(b)).
ii) The corporation is due Rs 1,755.17 Lakhs as at 31.03.2010 (Rs
2,100.99 Lakhs upto 31.03.2009) from certain subsidiary Companies
(which have significant accumulated losses) on account of services
rendered and funds advanced to them (intluding interest thereon).
Besides the corporation holds investments in the said subsidiaries
having a book value as at 31.03.2010 of Rs.729.10 Lakhs (Previous Year
Rs 729.10 Lakhs). The management has represented to us that these
investments are of long term nature and the shortfall/diminution in
their value is not permanent and that the intrinsic value of assets
owned by these companies is considerable to recover the dues and cost
of investments, though some of the companies are non-operational and
the present net worth of most of these companies is in the negative
(Refer Note Nos. 6 (a)(i) & (ii)).
iii) (a) Compensation payable to a party , whose premises were under
occupation by the Corporations ATT Division , Delhi upto 28.02.2007
has not been provided as determination / quantification by the
Commissioner appointed for the purpose is pending. [Refer Note No.
2(c)].
(b) Lease Rent / registration fee/ ground rent / depreciation due to
non- finalization of terms of purchase/lease/title deeds of land and
buildings have not been provided for. [Refer Note No. 4]
iv) Amount of Rs 1326.12 Lakhs (Previous Year Rs 1326.12 Lakhs) shown
as recoverable from demerged units for the period from l" April 2001
till the date of physical transfer on account of funds transferred and
expenses incurred on behalf of the said units, but not received till
date, has been considered good of recovery by the management. . [Refer
Note No. 8(b)]
v) Impairment in the value of assets /partly completed assets
aggregating to Rs. 209.69 Lakhs (Previous Year Rs 206.56 lakhs)
included under capital work in progress has not been provided. [Refer
Note No. 3(b)]
vi) Pending reconciliation / receipt of detailed statement of accounts
from NBCC, provision has not been made for interest payable
to/recoverable from and amount due from NBCC pertaining to Iraq
Project. Effect on the accounts on due receipt /adjustment / accounting
thereof cannot be indicated at this stage. [Refer Note Nos. 6(c) &
7(b)]
vii) Capitlisation effected/charged to expenditure on
provisional/payment basis/pending/receipt of final bills / finalisation
and certification by architects. Effect on the accounts on due
adjustment there of, cannot be indicated at this stage. [Refer Note
Nos. 4(g)/4(h)J
viii) Balance in Sundry Debtors, Loans and Advances, Deposits and
Sundry Creditors accounts are subject to independent confirmation and
reconciliation in some cases. [Refer Note No. 6(b)]
ix) In respect of lease agreements with some of the licensees the
corporation has, despite prescribed conditions, not charged
interest/levied damages on overdue amounts. These have also not been
quantified. Consequently effect on the accounts on due
quantification/accounting thereof cannot be indicated at this stage.
(Refer Accounting Policy No. 13(v))
x) The Corporation has provided for Rs. 3,3 3 5.24 Lakhs in respect of
unionized workers on IDA pattern w.e.f 01.01.2007. However, while
working out the liability towards pay revision as above, the
Corporation had not considered the liability on account of Gratuity and
Leave Encashment. (Refer Note No. 11(b)).
5. We further report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit except to the extent referred to in Note No. 6(c) of Schedule 12
regarding status of dues payable / recoverable from a party and Note
No. 8(b) of Schedule 12 regarding confirmation of amount recoverable
from demerged units;
b) In our opinion proper books of account, as required by law, have
been kept so far as appears from our examination of those books and
proper returns adequate for the purpose of our audit have been received
from the branch auditors in respect of the units / branches audited by
them;
c) The reports of the branch auditors on the accounts of units /
branches audited by them have been received and considered by us in
preparing this report after making such adjustments as we considered
necessary;
d) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account
and audited financial statements of the branches;
e) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except to the extent referred to hereunder:-
- Valuation of Inventories at cost in some of the units as against
lower of cost or net realizable value - Accounting Standard-2 -
Valuation of Inventories.
- Lease charges in respect of land of Hotel Samrat not having been
amortised. [Note No. 4(c)] - Accounting Standard -6 - Depreciation
Accounting.
- Conversion of balance with foreign bank in Iraqi dinar at the rate
prevailing as on 31s March, 1991 instead of applying year end rates.
[Refer Note No. 7(a)] - Accounting Standard-11- Accounting for Effect
of Changes in Foreign Exchange Rates
- Non-disclosure of complete details pertaining to transactions entered
into during the year with related parties-Accounting Standard-18-
Related Party Disclosure.
- Non-disclosure of details required in respect of operating leases
entered into by the Corporation. [Note No. 13(v) of Schedule-12] -
Accounting Standard-19 - Leases.
- Except to the extent referred to in note 13(viii) of Schedule 12, the
corporation has not determined impairment in other assets in terms of
Accounting Standard-28-Impairment of Assets during the year.
From the available information, we are unable to quantify the impact on
the financial statements due to non-compliance of The Accounting
Standards referred to above.
f) The provisions of clause (g) of sub-section (1) of Section 274 of
the Companies Act, 1956, are not applicable to the Corporation in terms
of notification No.G.S.R. 829(E) dated 21st October, 2003 issued by
Government of India, Department of Company Affairs;
6. We further report that:-
a) We are unable to comment on the extent of liability that may devolve
upon the Corporation and impact the financial statements on resolution,
of legal proceedings referred to in Para 4(i) and 4(iii)(a);
b) The adjustments that may arise pertaining to matters referred to in
Para 4(ii), 4(iii)(b), 4(vi), 4(vii), 4(viii), 4(viii), 4(ix) and 4(x),
which cannot be quantified at this stage.
c) The impact of our comments in Para 4(iv) and 4(v), some of which
were subject matter of audit qualifications in the earlier years also,
is given below:
Reported Resultant Impact
Particulars figure figure (net of tax)
(Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs)
A. Reserve & Surplus
[Refer Paras 4(iv) & 4(v) 22802.59 21788.80 1013.79
B Capital Work-in-progress 4457.46 4247.77 209.69
[Refer Para 4(v)]
C Current Assets, Loans and
Advances 47858.68 46532.56 1326.12
[Refer Para 4(iv)].
D Current Liabilities and 30132.26 29610.24 522.02
Provisions (Tax Impact)
7. Subject to our comments in paragraphs 5(e) and 6 above, in our
opinion and to the best of our information and according to the
explanations given to us, the said accounts read with the accounting
policies and other notes, give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India: -
i) in the case of balance sheet, of the state of affairs of the
Corporation as at 31st March, 2010,
ii) in the case of profit & loss account, of the loss for the year
ended on that date, and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR
ENDED 31st MARCH, 2010.
1. (a) The corporation has generally maintained proper records showing
full particulars, including quantitative details and situation of fixed
assets except at few branches / units where records were incomplete in
respect of quantitative details and situation etc.
(b) The fixed assets are reported to have been physically verified by
the management generally at the yearend/reasonable intervals. In most
of the branches/units and the head office, the book balance and
physical balances have not been reconciled and hence, the
discrepancies, if any, have not been ascertained for necessary
adjustments in the books of account.
(c) The corporation has not disposed off substantial portion of its
fixed assets during the year and hence going concern assumption is not
affected.
2. (a) The inventory has been physically verified by the management
generally once in a year except at few branches / units where
verification has been conducted at the end of every half year. Some of
the branch auditors have reported that though the inventory has been
physically verifiedthe frequency of verification is inadequate/ not
reasonable and needs to be increased in view of the size and nature of
the inventory.
(b) The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the corporation and the nature of its business except at ATSS
where the branch auditor have opined the procedures to be not
reasonable. Some of the other branch auditors have reported that the
procedures of physical verification of inventories need to be
strengthened and provision made for evaporation loss / obsolescence for
dead stock of stores/ spares/ provisions, crockery & cutlery items and
stationery items.
(c) The corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were riot maintained. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material except at some branches
where such discrepancies could not be ascertained in the absence of
proper records of inventory. However, since the consumption of these
stocks, stores, crockery, cutlery etc. had been worked out by taking
opening balance, purchases and closing balance based on physical
inventories, he value of shortages etc. has not been ascertained and
shown separately. In this connection refer to our comment in para 2(b)
above also.
3. The Corporation has neither taken nor granted any loans, secured or
unsecured from/to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly provisions of clauses 4(iii)(b), (c), (d), (e), (f) and (g)
of the said order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Corporation and the nature of its business with
regard to the purchase of inventory, fixed assets and with regard to
the sale of goods and rendering of services except at some branches
wherein the branch auditors have reported, that the evaluation of the
prevailing internal control structure and its operation disclosed weak
internal control systems and which is not adequate and commensurate
with the size of the branch and the nature of its business, with regard
to purchase of inventory and recording, purchase affixed assets, sale
of goods and services, deposit of Foreign Currency cash at Duty free
shop units, income from licenses, maintenance of accounting records,
reconciliation of control accounts, extension of credit, issuance of
credit notes, purchase and consumption of raw materials, cost of
services rendered, stores, stocks, issuance of material, valuation of
inventories at DFS units Cat Goa), and which need to be improved /
strengthened. There has been continuing failure to correct major
weaknesses in internal control systems, reported by the internal
auditors in the previous year on similar lines, at these branches.
5. (a) According to the information and explanations given to us, we
are of the opinion that there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956.
(b) Not applicable in view of para (a) above.
6. The Corporation has not accepted any deposits from public in terms
of Sections 58A and 58AA of the Companies Act,1956 and the rules made
there under.
7. In our opinion, the Corporation has an internal audit system which
is generally commensurate with the size and nature of its business.
However, as reported by some of the branch auditors, the coverage of
internal audit needs to be enlarged to cover all areas of operation
including timely submission and follow up of the reports.
8. As informed to us, the Central Government has not prescribed
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956.
9. (a) In our opinion the Corporation is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax,Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it except as reported by some of the branch auditors
regarding irregularity in deposit/ non-deposit of undisputed statutory
dues.
According to the information and explanations given to us and as
reported by the branch auditors in their reports, the undisputed
amounts payable in respect of outstanding statutory dues that were in
arrears, as on 31.03.2010for a period of more than six months from the
date they became payable are given below :
Name of the
Statute, Unit Nature of dues Amount Period to which the
(in lacs) amount relates
ESI, Vigyan Bhawan, ESI 4.79 More than six months
Hyderabad House 1.72
Sales Tax & VAT, ATT
Chennai Sales Tax VAT 1.25 More than six months
(b) According to the information & explanations given to us and as
reported by the branch auditors in their reports, dues of Provident
Fund, Investor . Education and Protection Fund, Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and Cess that have not been deposited on account of
disputes are given below:
Name of the Nature of Amount
Statue/Unit Dues
The Delhi Sales Local Sales 8813.00
tax Act, 1975 Tax
The Central Central Sales 12.84
Sales Tax Act, Tax
1956
Andhra Pradesh Local Sales 327.15
VAT Act, 2005 Tax
Karnataka Sales Local Sales 420.71
Tax Act, 2004 Tax
Orissa Sales Tax Sales Tax 1.07
act
Maharashtra Sales Tax 2465.62
Sales Tax Act
The Delhi Tax Luxury Tax 266.88
on Luxuries Act,
1996
The Income Tax Income Tax 507.09
Act, 1961
Customs Act, Custom Duty 21818.11
1962 Mumbai
Customs Act, Custom Duty 2.14
1962 Hyderabad
Provident Fund (PF) 1.14
Janpath
Service Tax, Service Tax 15.54
IGIAR
Customs Custom Duty 45.17
Authority by
Kolkata
Name of the Period to Forum where
Statue/Unit which the dispute is Pending
amount relates
The Delhi Sales
tax Act, 1975 1990 to 2006 Various Authorities
The Central
Sales Tax Act,
1956 1987 to 2002 Various Authorities
Andhra Pradesh
VAT Act, 2005 2005 to 2007 Hyderabad High
Court
Karnataka Sales
Tax Act, 2004 2004-2005 Karnataka High
Court
Orissa Sales Tax
act 1988 to 2005 Various Authorities
Maharashtra
Sales Tax Act 1982 to 1996 Mumbai High
Court, Maharashtra
Sales Tax Tribunal
The Delhi Tax
on Luxuries Act,
1996 1997-98, Assistant
2001-02 & Commissioner of
2002-03 Luxury Tax
The Income Tax
Act, 1961 1992-93, Income Tax
1994-95 & Appellate Tribunal
1995-96
2007-08 CIT (A)
Customs Act,
1962 Mumbai 1995 to 2008 Commissioner
(Appeals)
Customs Act,
1962 Hyderabad 2006-07 Committee on
Disputes
Provident Fund
Janpath Earlier Years High Court
Service Tax,
IGIAR 2007-08 to CESTAT, Delhi
2009-10
Customs
Authority by
Kolkata 2003 Committee on
Disputes
Name of the Nature of Amount
Statue/Unit Dues
Customs Custom Duty 9.26
Authority, Delhi
Excise Duty, Excise Duty 13.33
Kalinga
Employees State ESI
Insurance
Janpath 27.91
Ashok 397.70
Samrat 21.91
IGIAR 11.04
Taj Restt 7.25
Employees State ESI 1.45
Insurance
Kalinga
Name of the Period to Forum where
Statue/Unit which the dispute is Pending
amount relates
Customs
Authority, Delhi 2005-06 Customs Authority
Excise Duty,
Kalinga 2002-03 High Court,Orissa
Employees State
Insurance
Janpath
Ashok
Samrat
IGIAR
Taj Restt High Court of
Earlier Years Delhi
Employees State
Insurance
Kalinga Earlier Years Dist. Court, Khurda
10. Even after considering the effects of quantified qualifications,
in our opinion, the Corporation does not have accumulated losses. The
Corporation has incurred cash loss during the financial year covered by
our audit and has not incurred cash losses in the immediately preceding
financial year. However, the effect of resolution and quantification of
matters reported / of un-quantified qualifications and others reported
in the main Audit Report, which may in some cases be significant, have
not been taken into consideration, as the amounts are not
ascertainable.
11. Based on our audit procedures and as per the information and
explanations given to us by the management, the Corporation has no dues
towards banks, financial institutions or debenture holders, and, hence,
provisions of clause 4(xi) of the Order are not applicable to the
corporation.,.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Corporation is not a chit fund or a nidhi
mutual benefit fund / society.
14. According to the information and explanations given to us, the
Corporation is not dealing in shares, securities and other investments.
The investments in the shares of subsidiary companies are held by the
Corporation in its own name and are not traded.
15. Except for a guarantee of Rs. 90 lacs provided against loans
obtained by a subsidiary company in the earlier year, and which is
continuing, the Corporation has not given guarantees during the year
for loans taken by others from banks or financial institutions.
Further, the terms and conditions on which the corporation had given
guarantees during earlier years for loans taken by others from bank or
financial institutions are not prima facie prejudicial to the interest
of the Corporation.
16. Based on information and explanations given to us by the
management, no term loans have been raised by the corporation during
the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
18. The Corporation has allotted 1,82,50,000 Equity Shares of Rs. 10/-
each at a premium of Rs. 30/- each to the President of India through
Ministry of Tourism, Government of India (promoter) through
preferential allotment.
19. The Corporation has not issued any debentures, hence this clause
is not applicable to the Corporation.
20. The Corporation has not raised money by public issues during the
year under audit, hence this clause is not applicable to the
Corporation.
21. During the course of our examination of the books and records of
the corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For General Lalla Mehta
Chartered Accountants (FRN 002830N)
Ashok Grover
(Partner>
M. No. 81784
Place: New Delhi
Date: 07 12 10
Mar 31, 2009
1. We have audited the attached balance sheet of India Tourism
Development Corporation Limited, New Delhi as at 31st March, 2009 and
also the profit and loss account and the cash flow statement of the
Corporation for the year ended on that date annexed thereto, in which
are incorporated the accounts of the Head Office and 4 units/branches
audited by us and 35 units/ branches audited by respective branch
auditors appointed by the Comptroller and Auditor General of India.
These financial statements are the responsibility of the Corporations
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
BARAKHAMBA ROAD : 706, AKASHDEEP, 26-A, BARAKHAMBA ROAD, NEW
DELHI-110001
TELE; 91(11) 23315110,, 23315119 Fax: 91 (11) 23739216 E-mail:
[email protected] ASAF ALI ROAD : 3/7B, 2nd FLOOR, ASAF AL1 ROAD, NEW
DELHI-110002
TELE : 91 (11) 23244061,23244062,23244063 FAX : 91 (11) 23244475
E-mail: [email protected]
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report) (Amendment) Order, 2004, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, and on the basis of such examination of the books
and records of the Corporation as we considered appropriate and the
information and explanations given during the course of audit and after
considering the reports of branch auditors, we enclose in the Annexure
a statement on the matters specified in Paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) There are Property Tax demands of Rs. 5,733.32 lakhs (Previous Year
Rs
5,489.81 Lakhs) from NDMC in respect of certain properties and demand
of Rs 436.60 lacs (Previous Year Rs 414.77 Lakhs) from ESI authorities,
which are being disputed by the Corporation and not provided for (Refer
Note Nos.l (a)(i) &2(b)).
ii) The corporation is due Rs.2,162.55 Lakhs as at 31.03.2009 (Rs
2,120.50 Lakhs upto 31.03.08) from certain subsidiary Companies (which
have significant accumulated losses) on account of services rendered
and funds advanced to them(including interest thereon). Besides the
corporation holds investments in the said subsidiaries having a book
value as at 31.03.2009 of Rs. 759.70 lakhs (Previous Year Rs 759.70
Lakhs) . The management has represented to us that these investments
are of long term nature and the shortfall/diminution in their value is
not permanent and that the intrisic value of assets owned by these
companies is considerable to recover the dues and cost of investments,
though some of the companies are inoperational and the present net
worth of most of these companies is in the negative (Refer Note No. 6
(a)(i),(ii)).
iii) The Corporation has decided to recognize income from
subsidiaries/JV companies (most of these have significant accumulated
losses) on account of management fees/interest on loans on receipt
basis instead of on accrual basis, keeping in view the difficult
financial position of these companies. Consequent to this change income
for the year and loans and advances have both been understatedby Rs.
146.90 lacs. The manner of recognition of revenue, there being no
significant uncertainty, is not in accordance with Accounting
Standards- Revenue Recognition, specially when the amounts
due/investments made have been considered good by the management.
(Refer Note No 6(a) (ii) &12).
iv) (a) Compensation payable to a party, whose premises were under
occupation by the Corporations ATT Division, Delhi upto 28.02.2007has
not been provided as determination / quantification by the Commissioner
appointed for the purpose is pending. [Refer Note no. 2(c)].
(b) Lease Rent / registration fee/ ground rent / depreciation due to
non finalization of terms of purchase/lease/title deeds of land and
buildings have not been provided for. [Refer Note No. 4]
v) Amount of Rs 1326.12 lakhs (Previous Year Rs 1326.12 lakhs) shown as
recoverable from demerged units for the period from 1st April 2001 till
the date of physical transfer on account of funds transferred and
expenses incurred on behalf of the said units, but not received till
date, has been considered good of recovery by the management. .[Refer
Note No.8(b)]
vi) Impairment in the value of assets /partly completed assets
aggregating to Rs. 206.56 lakhs (Previous Year Rs 206.29 lakhs )
included under capital work in progress has not been provided. [Refer
Note No3(b)]
vii) Pending reconciliation / receipt of detailed statement of accounts
from NBCQ provision has not been made for interest payable
to/recoverable from and amount due from NBCC pertaining to Iraq
Project. Effect on the accounts on due receipt /adjustment / accounting
thereof cannot be indicated at this stage. [Refer Note No. 6(c) & 7(b)]
viii) Capitlisation effected/charged to expenditure on
provisional/payment basis/pending/receipt of final bills / finalisation
and certification by architects. Effect on the accounts on due
adjustment there of cannot be indicated at this stage. [Refer Note
Nos. 4 (e)/4(f)]
ix) Balance in Sundry Debtors, Loans and Advances, Deposits and Sundry
Creditors accounts are subject to independent confirmation and
reconciliation in some cases. [Refer Note No. 6 (b)]
x) The Corporation had, for the purpose of running of the Duty Free
Trade in India, established on 18/09/2007 a Joint Venture Company (JV)
in collaboration with M/s Aldeasa of Spain vide agreement dated
10/07/2007. In terms of the JV agreement, the corporation and Aldeasa
were to equally contribute funds to the JV towards capital and
accordingly the corporation has, being a promoter subscriber, recorded
an investment to the extent of Rs. 50,000 (5,000 equity shares ofRs. 10
each) in the joint venture company, though the share certificates
remained to be received from the JV company. Besides, the financial
statements of the JV Company have not been received from inception till
31.03.2009. The Joint Venture partner has claimed Rs. 684.96 lacs from
the Corporation towards reimbursement of expenses incurred by it on the
joint venture project which is under verification/acceptance to the
claims. In the absence of financial statements and other supporting
documentation, corporations share of profit/loss and contribution
towards expenses, if any, in connection with the running of the JV
could not be ascertained and provided for. Effect on the accounts on
due determination and accounting thereof cannot be indicated at this
stage. (Refer Note No. 13).
xi) In respect of lease agreements with some of the licensees the
corporation has, despite prescribed conditions, not charged
interest/levied damages on overdue amounts. These have also not been
quantified. Consequently effect on the accounts on due
quantification/accounting thereof cannot be indicated at this stage.
(Refer Accounting Policy No.l3(v) )
xii) The Corporation has provided for Rs.663.42 lacs as interim relief
in respect of C&D category of employees w.e.f. 01.01.2007, pending
ascertainment of the final wage settlement payable. However, while
working out the liability towards interim pay relief as above, the
Corporation had not considered deductions/contributions towards
statutory dues namely provident fund/ ESI etc.
Effect on the accounts on due quantification of final wage settlement
payable and statutory deductions and provision thereof cannot be
indicated at this stage. (Refer Note No.ll(c)(i) ).
5. We further report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit except to the extent referred to in Note No. 6(c) of Schedule 12
regarding status of dues payable / recoverable from a party and Note
No. 8(b) of Schedule 12 regarding confirmation of amount recoverable
from demerged units;
b) In our opinion proper books of account, as required by law, have
been kept so far as appears from our examination of those books and
proper returns adequate for the purpose of our audit have been received
from the branch auditors in respect of the units / branches audited by
them.
c) The reports of the branch auditors on the accounts of units /
branches audited by them have been received and considered by us in
preparing this report after making such adjustments as we considered
necessary ;
d) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account
and audited financial statements of the branches.
e) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except to the extent referred to hereunder :-
- Valuation of Inventories at cost in some of the units as against
lower of cost or net realizable value - Accounting Standard-2 -
Valuation of Inventories.
- Lease charges in respect of land of Hotel Samrat not having been
amortised. [Note No. 4 (g)J - Accounting Standard -6 - Depreciation
Accounting.
- Conversion of balance with foreign bank in Iraqi dinar at the rate
prevailing as on 31s March, 1991 instead of applying year end rates.
[Refer Note No. 7(a) J - Accounting Standard-11- Accounting for Effect
of Changes in Foreign Exchange Rates
- Non-disclosure of complete details pertaining to transactions entered
into during the year with related parties-Accounting Standard-18-
Related Party Disclosure.
- Non disclosure of details required in respect of operating leases
entered into by the Corporation. [Note No. 14 (v) of Schedule-12] -
Accounting Standard-19-Leases.
- Except to the extent referred to in note 14(viii) of Schedule 12, the
corporation has not determined impairment in other assets in terms of
Accounting Standard-28-Impairment of Assets during the year.
From the available information we are unable to quantify the impact on
the financial statements due to non-compliance of The Accounting
Standards referred to above.
f) The provisions of clause (g)pf sub-section (1) of Section 274 of the
Companies Act, 1956, are not applicable to the Corporation in terms of
notification No.G.S.R. 829(E) dated 21st October, 2003 issued by
Government of India, Department of Company Affairs;
6. We further report that: -
a) We are unable to comment on the extent of liability that may devolve
upon the Corporation and impact the financial statements on resolution,
of legal proceedings referred to in Para 4(i) and 4(iv)(a);
b) The adjustments that may arise pertaining to matters referred to in
Para 4 (ii),4(iv) (b), 4 (vii), 4(viii),4(ix), 4(x) ,4(xi), 4(xii),
which can not be quantified at this stage.
b) The impact of our comments in Para 4(in), 4(v) and ,4(vi), some of
which were subject matter of audit qualifications in the earlier years
also, is given below:
Impact (net of
Reported figure Resultant figure tax) (Rs. In
Particulars (Rs in Lacs) figure
(Rs. In lacs)
A. Reserve & Svirplus
[Refer Paras 4(iii),
4(iv), 18758.66 17,834.76 923.90
4(v)
B Capital
Work-in-progress
910.62 704.06 206.56
[Refer Para 4(v)]
C Current Assets, Loans
and Advances
50158.73 48979.51 1179.22
[Refer Paras
4(iii) &
4(iv)]
D Current
Liabilities and 25593.30 25131.42 461.88
Provisions
(Tax Impact)
7 Subject to our comments in paragraphs 5(e) and 6 above, in our
opinion and to the best of our information and according to the
explanations given to us, the accounts read with the accounting
policies and other notes give the information required by the Companies
Act, 1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:-
i) in the case of balance sheet, of the state of affairs of the
Corporation as at 31st March, 2009,
ii) in the case of profit & loss account, of the profit for the year
ended on that date, and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNTS OF INDIA TOURISM DEVELOPMENT CORPORATION LIMITED FOR THE YEAR
ENDED 31st MARCH, 2009.
1. (a) The corporation has generally maintained proper records showing
full particulars, including quantitative details and situation of fixed
assets except at few branches / units where records were incomplete in
respect of quantitative details and situation etc.
(b) The fixed assets are reported to have been physically verified by
the management generally at the year end/reasonable intervals. In most
of the branches/units and the head office, the book balance and
physical balances have not been reconciled and hence, the
discrepancies, if any, have not been ascertained for necessary
adjustments in the books of account.
(c) Except for sale of assets of duty free shops at Bangalore during
the year on their closure and sales of other assets, in some of the
units/ division, which have been classified as not in active use and
held for sale and which were not significant taking the assets of the
corporation as a whole, the corporation had not disposed off
substantial portion of its assets during the year and hence going
concern assumption is not affected.
2. (a) The inventory has been physically verified by the management
generally once in a year except at few branches / units where
verification has been conducted at the end of every half year. Some of
the branch auditors have reported that though the I inventory has been
physically verified the frequency of verification is inadequate/ not
reasonable and needs to be increased in view of the size and nature of
the inventory.
(b) The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the corporation and the nature of its business except at two
units ATT Delhi andATSS where the branch auditors have opined the
procedures to be not reasonable. Some of the other branch auditors
have reported that the procedures of physical verification of
inventories need to be strengthened and provision made for evaporation
loss / obsolescence for dead stock of stores/ spares/ provisions,
crockery & cutlery items and stationery items.
(c) The corporation is generally maintaining proper records of
inventory except at few units wherein the branch auditors have reported
that proper records of inventory were not maintained. The discrepancies
noticed on physical verification between the physical stocks and the
book records were not material except at some branches where such
discrepancies could not be ascertained in the absence of proper records
of inventory. However, since the consumption of these stocks, stores,
crockery, cutlery etc. had been worked out by taking opening balance,
purchases and closing balance based on physical inventories, the value
of shortages etc. has not been ascertained and shown separately. In
this connection refer to our comment in para 2(b) above also.
3. The Corporation has neither taken nor granted any loans, secured or
unsecured from/to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act,
1956.Accordingly provisions of clauses 4(iii)(b),(c),(d),(e),(f),and
(g) of the said order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Corporation and the nature of its business with
regard to the purchase of inventory, fixed assets and with regard to
the sale of goods and rendering of services except at some branches
wherein the branch auditors have reported, that the evaluation of the
prevailing internal control structure and its operation disclosed weak
internal control systems and which is not adequate and commensurate
with the size of the branch and the nature of its business, with regard
to purchase of inventory and recording, purchase of fixed assets, sale
of goods and services, deposit of Foreign Currency cash at Duty free
shop units income from licenses, maintenance of accounting records,
reconciliation of control accounts, extension of credit, issuance of
credit notes, purchase and consumption of raw materials, cost of
services rendered, stores, stocks, issuance of material, valuation of
inventories at DFS units (at Goa), and which need to be improved /
strengthened. There has been continuing failure to correct major
weaknesses in internal control systems, reported by the internal
auditors in the previous year on similar lines, at these branches.
5. (a) According to the information and explanations given to us, we
are of the opinion that there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956. (b) Not applicable in view of para (a) above.
6. The Corporation has not accepted any deposits from public in terms
of Sections 58A and 58AA of the Companies Act,l 956 and the rules made
thereunder.
7. In our opinion, the Corporation has an internal audit system which
is generally commensurate with the size and nature of its business.
However, as reported by some of the branch auditors, the coverage of
internal audit needs to be enlarged to cover all areas of operation
with on timely submission and follow up of the reports.
8. As informed to us, the Central Government has not prescribed
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956.
9. (a) In our opinion the Corporation is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax,Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it except as reported by some of the branch auditors
regarding irregularity in deposit / non-deposit of undisputed statutory
dues.
According to the information and explanations given to us and as
reported by the branch auditors in their reports, the undisputed
amounts payable in respect of outstanding statutory dues that were in
arrears, as on 31.03.2009 for a period of more than six months from the
date they became payable are given below :
Name of the
Statute, Unit Nature of dues Amount Period to which the
(in lacs) amount relates
ESI, Vigyan
Bhawan, ESI 4.79 More than six months
Hyderabad House 1.72
Janpath 25.84
Ashoka 117.79
Samrat 49.77
IGIAR 1.02
Sales Tax & VAT,
ATT Chennai Sales Tax, VAT 1.25 More than six months
Expenditure Tax,
Patliputra Ashok, Expenditure Tax 2.32 More than six months
Kalinga
(b) According to the information & explanations given to us and as
reported by the branch auditors in their reports, dues of Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance , Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty and Cess that have not been deposited on account of
disputes are given below :
Name of the Nature of dues Amount Period to Forum where
Statue (in lacs) which the dispute is Pending
amount relates
The Delhi
Sales Local Sales 6196.17 1990 to 2005 Various Authorities
tax Act, 1975 Tax
The Central Central Sales 12.84 1987 to 2002 Various Authorities
Sales Tax Act, Tax
1956æ
Andhra Pradesh Local Sales 327.15 2005 to 2007 Hyderabad High
VAT Act, 2005 Tax Court
Karnataka
Sales Local Sales 420.71 2004-2005 Karnataka High
Tax Act, 2004 Tax Court
Orissa
Sales Tax Sales Tax 0.72 1988 to 2005 Various Authorities
act
Maharashtra Sales Tax2465.37 1982 to 1996 Mumbai High
Sales Tax Act Court, Maharashtra
Sales Tax Tribunal
The DelhT Tax Luxury Tax 266.88 1997-987 Assistant
on Luxuries Act, 2001-02 & Commissioner of
1996 2002-03 Luxury Tax
The Maharashtra Luxury Tax 19.90 1993-1995 Maharashtra Sales
Luxury Tax Act Tax Tribunal
The Income Tax Income Tax 363.21 1992-93, Income Tax
Act, 1961 1994-95, Appellate Tribunal
1995-96;
Property Tax Property Tax 5733.32 1987-88 Delhi High Court
Act onwards
Customs Act, Custom Duty 21825.66 1995 to 2008 Commissioner
1962 Mumbai (Appeals)
Customs Act, Custom Duty 2.14 2006-07 Committee on
1962 Hyderabad Disputes
Provident Fund (PF) 43.31 1982-83 High Court
onwards
ServiceTax, Service Tax 11.18 2007-08 & CESTAT, Delhi
IGIAR 2008-09
Customs Custom Duty 45.17 2003 Committee on
Authority by Disputes
Kolkata
Customs Custom Duty 8.84 2005-06 Customs Authority
Authority, Delhi
Excise Duty, Excise Duty 13.33 2002-03 HighCourt Orissa
Kalinga
Employees State ESI
Insurance
Janpath 27.91 High Court of
Ashok 368.49 Earlier Years Delhi
Samrat 21.91
IGIAR 11.04
TajRestt 7.25
10. Even after considering the effects of quantified qualifications,
in our opinion, the Corporation does not have any losses / accumulated
losses. The Corporation has not incurred cash loss during the financial
year covered by our audit or in the immediately preceding financial
year. However, the effect of resolution and quantification of matters
reported / of unqualified qualifications and others reported in the
main Audit Report, which may in some cases be significant, have not
been taken into consideration, as the amounts are not ascertainable.
11. Based on our audit procedures and as per the information and
explanations given to us by the management, the Corporation has no dues
towards banks, financial institutions or debenture holders, and, hence,
provisions of clause 4(xi) of the Order are not applicable to the
corporation.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the Corporation has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion, the Corporation is not a chit fund or a nidhi
mutual benefit fund / society.
14. According to the information and explanations given to us, the
Corporation is not dealing in shares, securities and other investments.
The investments in the shares of subsidiary companies are held by the
Corporation in its own name and are not traded.
15. Except for a guarantee of Rs. 90 lacs provided against loans
obtained by a subsidiary company in the earlier year, and which is
continuing, the Corporation has not given guarantees during the year
for loans taken by others from banks or financial institutions.
Further, the terms and conditions on which the corporation had given
guarantees during earlier years for loans taken by others from bank or
financial institutions are not prima facie prejudicial to the interest
of the Corporation.
16. Based on information and explanations given to us by the
management, no term loans have been raised by the corporation during
the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Corporation, we
report that no funds raised on short-term basis have been used for
long-term investment.
18. The Corporation has not made any allotment of shares during the
year under audit, hence this clause is not applicable to the
corporation.
19. The Corporation has not issued any debentures, hence this clause
is not applicable to the Corporation.
20. The Corporation has not raised money by public issues during the
year under audit, hence this clause is not applicable to the
Corporation.
21. During the course of our examination of the books and records of
the corporation, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the corporation, noticed or reported during the year,
nor have we been informed of such case by the management.
For Khanna & Annadhanam
Chartered Accountants
(K.A.Balasubramanian)
Place: New Delhi Partner
Date: 8.12.2009 M.No. 17415