19. SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956, subject to what is stated hereinafter.
b) The Company follows the mercantile system of accounting and recognises significant items of income and expenditure on accrual basis with the exceptions stated below:-i) Leave Travel Concession expenses are accounted for in the year in which LTC is availed.
ii) Remission of demurrage including those on behalf of other parties, on settlement.
iii) Claims for liquidated damages from the contractors for delayed execution of work, when the amount is finally determined and agreed upon.
iv) Subscription fees from associate subscribers and service charges from regular subscribers on receipt. However, subscription fee received in advance is accounted for in the relevant year.
c) Grants from Government are taken to capital or revenue account as per directions of the Ministry of Commerce & Industry. Specific capital grants are reduced from the cost of specific assets.
d) Expenditure/Income of Fairs/Exhibitions held in India and abroad, is accounted for, in the year in which the event commences. However, in case of long term events having duration of three months or more, spread over two accounting periods, major period of which falls in the subsequent accounting period, the surplus/deficit of such event is accounted for in the year in which the event concludes.
e) Cost of exhibits of the Company and items of interior decoration displayed at fairs, are treated as revenue expenditure. However, new exhibits in stock for utilization in future fairs are treated as closing stock.
f) Provision for expenses is made on estimated basis, where bills are awaited and expenditure pertaining to the current year is yet to be incurred.
g) Expenditure incurred through CPWD on Civil, Electrical and Horticulture work, is accounted for, on the basis of accounts rendered by them.
h) Income and Expenditure relating to previous years, not exceeding Rs.10,000 in each case, are treated as pertaining to the current year. i) Income from dividend is accounted for as and when declared.
j) In cases where contracts with licensee(s) have expired, dues are accounted for provisionally on the basis of the expired contracts/revised accords till a final decision in the matter is reached/revised contracts executed.
2. FIXED ASSETS
Fixed Assets are stated at cost, net of grants received and/or accumulated depreciation.
3. DEPRECIATION
i) Assets costing Rs.5,000 or less individually are depreciated @ 100%.
ii) Depreciation is calculated on the straight line method on pro rata basis from/ up to the month of addition/deletion at the rates determined by the management. These rates are not lower than the rates prescribed in the Companies Act, 1956.
iii) Leasehold land acquired on perpetual lease basis is not being amortized.
4. INTANGIBLE ASSETS
The cost of the Softwares acquired or developed internally are treated as deferred revenue expenditure and written off equally over a period of three years from the year in which the software is available for use.
5. INVESTMENTS
Current Investments are carried at the lower of cost and market value. Long term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if decline in value is other than temporary in the opinion of the management.
6. EMPLOYEES BENEFITS
i) The company took over the assets and liabilities of erstwhile Trade Development Authority on 1st January, 1992. The Service Rules of the erstwhile Trade Development Authority and the Company are different in certain respects.
For calculating the emoluments, the respective rules have been followed and the provisions have been made accordingly.
ii) The liability for Gratuity and Leave Encashment is provided on the basis of actuarial valuation made at the end of the year, keeping in view the rules of the organisation on the subject.
7. CURRENT ASSETS
i) Sundry debtors and advances are stated net of provisions for doubtful debts in respect of dues outstanding for more than three years, or otherwise except cases where the Company is hopeful of recovery. ii) Inventories are valued at lower of cost and net realizable value.
8. FOREIGN CURRENCIES
i) The current assets and current liabilities are translated at the rate of exchange prevalent on the date of balance sheet and resultant difference is accounted for as gain or loss in exchange.
ii) Items of income and expenditure relating to foreign currency transactions are accounted for at the average rate of remittances abroad.
iii) Fixed assets are accounted at the average rate of remittance(s) in the year of acquisition. In case previous funds are utilised, average rate of the previous remittance(s) is taken for the purpose of conversion.
SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS (Contd.)
20. NOTES FORMING PART OF ACCOUNTS
1. CONTINGENT LIABILITIES:
| Claims against the Company not acknowledged as debts | Rs. 4,37,35,549* |
| (Rs. 3,14,82,398) |
* Employees claims for certain benefits have not been provided for wherever the amounts are not ascertainable.
2. a) The company has been incorporated u/s 25 of the Companies Act, 1956 and also registered as a Charitable Trust u/s 12A of the Income Tax Act, 1961. Accordingly, the company has been granted exemption from payment of Income Tax u/s 10(23C)(iv) of the Income Tax Act, 1961 from the assessment years 1989-90 and onwards. Therefore, no provision for Income Tax has been made in the accounts and as such, the provisions of Accounting Standard-22 issued by the Institute of Chartered Accountants of India do not apply to the Company.
b) On the directives of the Income Tax Department, a Special Audit u/s 142(2A) of the Income tax Act, 1961 was conducted by a firm of chartered accountants during the period February-August 2005 for the assessment year 2003-04. In February 2008, the Income Tax Department directed ITPO to pay a remuneration of Rs.33,02,250/- plus Service Tax to the Special Auditor. The company is of the view that the fees fixed by the Income Tax Department is exorbitantly high and therefore, a writ petition was filed in the Hon’ble High Court of Delhi on 25th April, 2008 against the order of the Income Tax Department. in accordance with the orders of the Hon’ble High Court of Delhi dated 6th May, 2008, the company has deposited Rs.7 lakhs with Registry of the Court. As the quantum of fees for the Special Audit is yet to be crystallized, no provision for the same has been made in the accounts.
c) in 2006-07, a demand of Rs. 16.80 crores was raised on the Company by the Assessing Officer for the Assessment Year 2004-05 inspite of the fact that the CBDT had granted income tax exemption to the Company u/s 10(23C)(iv) of the Income Tax Act, 1961 for the relevant assessment year. During the year, the Assessment Order was set aside by the Director of Income Tax (Exemptions) u/s 263 of the Income Tax Act and directed the Assessing Officer to take up the assessment proceedings afresh.
The demand of Rs.16.80 crores pertaining to Assessment Year 2004-05 was raised on the basis of observations contained in the Special Audit Report conducted for the Assessment Year 2003-04 as the Income Tax Department had recommended to CBDT for rescinding of the Income Tax Exemption to the company for the Assessment Year 2003-04. However, the CBDT vide letter dated 17th March, 2008 has conveyed that the recommendations of the Income Tax Department for rescinding the Income Tax Exemption to ITPO have not been accepted. As the basis on which the Income Tax Department had raised the demand of Rs.16.80 crores been set-aside by the CBDT, the company is of the view that no liability devolves on it towards income tax for the Assessment Year 2004-05. Accordingly, no provision for the same has been made in the accounts. However, the reassessment proceedings for the Assessment Year 2004-05 are yet to be completed.
3. The Physical Verification of fixed assets was conducted by a firm of Chartered Accountants as on 31st March, 2007. the discrepancies as per the Report of physical verification and the book balances are under examination/reconciliation. Thus, the resultant financial impact, if any, is not ascertainable at this stage and hence not accounted for.
4. The pay scales of employees under Industrial DA pattern are due for revision w.e.f. 1.1.2007. In the absence of any guidelines for revision of pay scales from the government, an ad-hoc provision of Rs. 17.56 crores, including for the previous year, has been made in the accounts on estimated basis.
5. a) Rs. NIL (Rs. 2,500) included under ‘Other liabilities’ represents amounts credited by banks, details of which are awaited for adjustments.
b) Rs. 88,990 (Rs. 9,62,192) lying in Foreign Banks has not been confirmed by the concerned banks.
c) Debits of Rs. 58,146 (Rs. 53,651) in the Foreign Banks reconciliations have not been adjusted pending receipt of information from the concerned banks.
6. Space rent income amounting to Rs. 12,79,21,142 (Rs. 11,47,36,820) has not been accounted for, as the same is disputed by the concerned parties.
7. Expenses include the following in respect of directors’ remuneration:
a) Salaries and allowances
Rs. 12,28,711(Rs. 9,56,520) b) Medical Reimbursement
Rs. 77,781 (Rs. 44,326) c) Foreign Service Contribution
Rs. 1,91,500 (Rs. 83,760) d) Productivity Linked Incentive
Rs. 33,426 (Rs. 76,632)Note:- Full time Directors are entitled to free use of Company’s car for official purposes. They are also entitled to the facility of the Company’s car for private use, for which recovery in terms of Department of Public Enterprises OM No. 2(53)/90-DPE(WC)-GIV dated 26th March, 1999 is being made. The value of perquisites on this account is thus ‘Nil’.
8. Amounts due to/from various parties are subject to confirmation, reconciliation and/or adjustments, if any.
9. Other expenses includes Rs. 12.44 crores (Rs. Nil) towards “refund of contingency charges” to the third party fair organisers in Pragati Maidan Complex which was levied on them and treated as Income of the Company in the earlier years.
10. Investment includes Rs.25,50,000/- paid towards company’s 51% equity contribution in West Bengal Trade promotion Organisation (WBTPO). The share certificate has not been received on the date of the Balance Sheet. Further in compliance of decision of Department of Commerce, the company has relinquished its holding in WBTPO and the equity contribution has been received back in April, 2008.
11.Entertainment Tax Department, Govt. of NCT, Delhi, raised a demand towards Entertainment Tax on sale of entry tickets into Pragati Maidan complex for the year 1996-97 to 1998-99 which was contested by the Company. During the year, the demand was set aside by the financial Commissioner, Govt. of NCT Delhi vide Order dt. 30.11.2007.
Further, the assessment proceedings for the period 1999-2000 to 2006-07 are under way and yet to be completed. In view of the Order of the Financial Commissioner, Govt. of NCT dt. 30.11.2007, the Company is hopeful that no liability towards Entertainment Tax on sale of tickets into Pragati Maidan devolves on the Company for the period 1999-2000 to 2006-07. hence, no provision on this account has been made in the books of accounts.
In addition, as per the notification dated 23.01.2007 issued by the Govt. of NCT, sale of entry tickets into Pragati Maidan complex during exhibition period is exempt from levy of Entertainment Tax, provided that admission fee charged is not more than Rs.500/- per person. As the rates of tickets for entry into Pragati Maidan Complex charged during 2007-2008 were less than Rs.500/- per person, no liability on account of “Entertainment Tax” accrues on the Company.
12. The Property Tax Assessment of Pragati Maidan Complex has been completed by Municipal Corporation of Delhi (MCD) upto 2002-03. However, the refund accruing to the Company consequent to the Assessment Order, is yet to be communicated by MCD and, therefore, the same has not been accounted for in the books of accounts of the Company. The payment of Property Tax for the year 2003-04 was made on the basis of last Assessment Order.
Further, with the introduction of Unit Area Method for calculation of Property Tax w.e.f. 2004-05, the Pragati Maidan Complex has been classified under category ‘A’ and use factor as ‘4’ by MCD. However, ITPO has been filing the Property Tax Return by taking ‘E’ category and use factor as ‘1’ which entails tax liability at lower rates. The contention of the company has not been agreed to by the MCD. The mater has been taken at the highest level in the MCD. However, final order/decision of MCD is awaited.
Pending the same, an ad-hoc provision of Rs. 2 crore per annum towards Property Tax, is being made in the books of accounts from the year 2004-05 and onwards against which an ad-hoc payment of Rs. 2.70 crore has been made to MCD during the year.
13. During the year, the Land and Development Office, Ministry of Urban Development vide letter No L II 14(457) dated 29.8.2007 raised a demand of Rs.499.62 crores on the company. The breakup of the demand is as under:-
a)Revised Licence Fee for the portion of 16 acres licensed by the company to M/s IAL (Appu Ghar) out of the Pragati Maidan Complex allotted to the company on 99 years perpetual lease by the L&DO vide their letter No.L.III/14(457)/76 dated 30th March, 1987. The L&DO has applied Commercial Area rates @ Rs.1359.75 lakhs per acre per annum from 01.4.1989, Rs.1631.69 lakhs per acre per annum from 1.4.1991 and Rs.1876.45 lakhs per acre per annum, from 1.4.1998 upto 14.01.2008 totaling to Rs.325.15 crore as against the rate of Rs.400/- per acre per annum prescribed in the allotment letter dated 30th March 1987.
b)Misuse charges for 8330.43 sq. mtrs. @ Rs.3009.98 lakhs per annum from 21st October 2002 to 14th January 2008 plus penalty @ 10% totaling to Rs.173.35 crores towards area given on licence fee basis by the company to Bazar/Restaurants operating in Pragati Maidan complex.
c)Unpaid ground rent of Pragati Maidan Complex and interest on delayed payment in respect of 16 acres area licensed to Appu Ghar amounting to Rs.1.12 crores.
The company has taken up the matter with its administrative ministry for getting the demand withdrawn by the L&DO on the following grounds:-
In respect of (a), the company’s contention is that since there is no change in the activities of M/s IAL as existing at the time of allotment of land in 1987, the applicability of Commercial Area Rates is unjustified. As such, the demand is also unjustified. The company is of the view that the activities of amusement park should not be treated as “commercial” as this is a very nominal activity in the Pragati Maidan Complex which was accepted in the meeting held in the Ministry of Urban Development in February, 1986. Accordingly, the licence fee of Rs.400/- per acre per annum was fixed in the allotment letter dated 30th March, 1987.
Further, the area licensed to M/s IAL was resumed by L&DO and transferred to DMRC and Hon’ble Supreme Court of India between September, 2004 and October 2006 whereas the additional demand was raised by L&DO on 29th August, 2007. Therefore, the company has no locus standi to impose any additional licence fee on M/s IAL with retrospective effect.
In respect of (b), the company’s contention is that no separate rate of licence fee was prescribed in the allotment letter dated 30th March, 1987 for Bazar/Restuarants operating in Pragati Maidan. The food facilities in Pragati Maidan are intended for visitors/participants to the fair grounds which are considered essential for successful holding of trade fairs/exhibitions in the Pragati Maidan Complex. Further, despite manifold increase in the number of fairs/exhibitions held in the Pragati Maidan Complex, the total Bazar/Restaurants area has remained practically the same when the Pragati Maidan Complex was allotted to the company. Hence, there is no ground for imposing misuse charges of land as alleged in the L&DO letter.
In respect of (c), the company has made upto date payment towards ground rent as provided in the allotment letter dt. 30th March, 1987. In respect of interest demanded on delayed payments of ground rent, the company is requesting for waiver of the interest being a government organisation. In addition, the interest demanded on delayed payment in respect of area licensed to M/s IAL, is being requested to be waived off being a government organisation and the fact that the L&DO had never demanded the interest in the past.
In view of above, the company is hopeful that the demand of Rs.499.62 crore shall be withdrawn by the L&DO. Therefore, no provision for the same has been made in the books of accounts.
14. A portion of the Exhibition Hall No 7 (not insured) in Pragati Maidan complex was damaged due to a fire on 29.07.2008. The quantum of loss to the property and assets of the company is yet to be ascertained. As such, the same has not been provided in the accounts. This disclosure is being made in accordance with Accounting Standard 4 issued by the Institute of Chartered Accountants of India.
15. A subsidiary Company viz. Karnataka Trade Promotion Organisation (KTPO) was promoted by the Company in December 2000 in collaboration with Karnataka Industrial Area Development Board (KIADB), an undertaking of the Government of Karnataka with an authorized Share Capital of Rs. 50 lakhs. The Company paid Rs. 25.50 lakhs towards its 51% equity contribution in earlier years. As per the MOU signed with the co-promoters, the Company was also required to contribute an exhibition hall to KTPO and the developed land was to be provided by KIADB.
Accordingly, exhibition hall was constructed at a total cost of Rs. 1,766.85 lakhs and handed over to KTPO during the year 2005-06. The Board of Directors of the Company also noted in its 133rd Meeting held on 9.9.2004 that the Authorized Share Capital of the KTPO is enhanced from Rs. 50 lakhs to Rs. 2,000 lakhs. It was also noted that the contribution of the exhibition hall by the Company to the extent of Rs. 1,020 lakhs and developed land by KIADB to the extent of Rs.980 lakhs would be treated as capital contribution to KTPO. The amount spent by both the co-promoters over and above the aforesaid amount will be treated as non-interest bearing subordinate debt to KTPO which will be refunded subject to annual review and cash flow situation of KTPO subsequent to the commencement of commercial activities by KTPO. Adjustments in the books of accounts were carried out in earlier years pending signing of revised MOU between the co-promoters. Out of the total capital contribution of Rs.1,020 lakhs, the share certificates for Rs. 994.50 lakhs are yet to be issued to the Company by KTPO.
16. A Subsidiary Company viz. Tamil Nadu Trade Promotion Organisation (TNTPO) was promoted by the Company in November 2000 in collaboration with Tamil Nadu Industrial Development Corporation (TIDCO), a Govt. of Tamil Nadu Undertaking with an Authorized Share Capital of Rs. 50 lakhs. The Issued Capital of TNTPO is Rs. 1 lakh, of which the Company has paid Rs. 0.51 lakhs, towards its 51% Equity Share, in the earlier years.
As per the MOU signed with the Co-promoters, the Company was required to contribute an exhibition hall to TNTPO and the developed land was to be provided by TIDCO, the Co-promoter. Accordingly, expenditure of Rs. 1,618.35 lakhs was incurred by the company on construction of the exhibition hall in earlier years.
During the year 2002-03, the Co-promoter in consultation with the Govt. of Tamil Nadu, reviewed the treatment of land given to the TNTPO by the State Government and the hall constructed by ITPO. The Govt. of Tamil Nadu vide its G.O.Ms. No. 28 dt. 03.02.2003 decided that lease rent of Rs. 1 crore per annum shall be paid by TNTPO towards land provided by TIDCO and 50% of the expenditure on construction of exhibition hall will be repaid by TNTPO to ITPO in 40 quarterly installments. The terms and conditions of the G.O. dt 03.02.2003 are yet to be accepted by the Company. Pending agreement to the revised terms and conditions, no accounting entries towards the amount proposed to be reimbursed by TNTPO has been made in the books of accounts of the Company.
17. In the absence of any demand from the Delhi Development Authority, no liability has been provided for delay in construction of staff quarters, as the request of the Company for extension of time is pending with DDA.
18. The accounts of Employees Contributory Provident Fund Trusts of erstwhile TFAI and TDA have been finalized upto 31st March, 2004 and 31st March, 2007 respectively. Accordingly, no provision for the losses of the Trusts, if any in the subsequent years, has been made in the accounts of the Company as the same cannot be ascertained at this stage.
19. The company does not have any information from any of its suppliers/creditors of their status as a micro and small enterprises as defined in Micro, Small & Medium Enterprises Development Act, 2006. Hence, the amount due to micro and small enterprises together with interest as on 31st March, 2008, if any, is not ascertainable.
20.Audit fee includes provision for increase in Statutory Audit fee by Rs.35,000/- which is subject to approval of the Board of Directors.
21. Sundry Debtors include Rs 3.27 crore as on 31.03.2008 which are due from food and beverage outlets who were allotted space in Pragati Maidan Complex on Licence basis. Out of the due amount, Rs 0.55 crore is outstanding for more than 3 years. The company is making all efforts to realize the outstanding dues by invoking the provisions of the agreement and / or approaching various judicial forums.
22. a) |
Expenditure in foreign exchange is:- |
|
|
|
i) |
Foreign Travel |
Rs. 74,43,047 |
|
|
|
(Rs.72,16,246) |
|
ii) |
Fairs and Exhibitions |
Rs. 9,95,91,762 |
|
|
|
(Rs. 14,51,91,317) |
|
iii) |
Others |
Rs. 4,47,78,846 |
|
|
|
(Rs.4,87,47,417) |
b) |
Earnings in foreign exchange:- |
|
|
|
i) |
Space rent |
Rs. 14,26,44,290 |
|
|
|
(Rs. 9,69,81,472) |
|
ii) |
Other receipts |
Rs. 6,85,104 |
|
|
|
(Rs. 6,03,983) |
23. Segment reporting for the year ended 31st March 2008.
(i) Information about Primary Geographical Segments
(Rs. in lakhs)
|
Trade Promotion Activities in India |
Trade Promotion Activities Abroad |
Un- |
Total |
Revenue |
|
|
|
|
External |
14454.05 |
1255.44 |
-- |
15709.49 |
Inter-segment |
-- |
-- |
-- |
-- |
Total revenue |
14454.05 |
1255.44 |
-- |
15709.49 |
Result |
|
|
|
|
Segment result |
3966.16 |
(-) 797.78 |
-- |
3168.38 |
Unallocated expenditure |
|
|
|
|
Net of unallocated income |
|
|
(-)440.89 |
(-)440.89 |
Interest/Dividend income |
|
|
4229.96 |
4229.96 |
Surplus before taxation |
|
|
|
6957.45 |
and exceptional items |
|
|
|
|
Prior Period Adjustments (Net) |
|
|
|
(-)98.69 |
Excess of income over expenditure |
|
|
|
6858.76 |
Other information |
|
|
|
|
Segment assets |
6202.16 |
986.72 |
57999.71 |
65188.59 |
Segment liabilities |
4837.54 |
1112.79 |
4898.34 |
10848.67 |
Capital expenditure |
114.75 |
0.24 |
-- |
114.99 |
Depreciation |
355.47 |
3.61 |
-- |
359.08 |
Deferred Revenue Expenditure written off |
44.72 |
-- |
-- |
44.72 |
Non-cash expenses |
|
|
|
|
other than depreciation |
-- |
-- |
-- |
-- |
(ii)The company does not have any Secondary Segment.
NOTE:
(a) Unallocated expenditure includes 10% of establishment and office expenses. The balance is apportioned among the other segments on the basis of their respective revenues.
(b) Unallocated assets and liabilities include those which are not possible to be appropriately identified to a specific segment.
24. Schedules 1 to 20 form integral part of the accounts.
25. Figures in brackets relate to previous year, which have been recast and regrouped wherever necessary.
26. Additional information as per Part IV of Schedule VI of the Companies Act, 1956, is annexed here to.
(A.K. Khanna) Senior General Manager & Financial Adviser cum Company Secretary |
(Rajiv Yadav)
Executive Director | (Dr. Sheela Bhide) Chairman & Managing Director |
As per our report annexed for Tiwari & Associates Chartered Accountants |
||
(Sandeep Sandill) Partner M. No. 85747 |
ADDITIONAL INFORMATION AS PER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
1. Registration Details
Registration No. |
|
State Code |
|
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Balance Sheet Date |
31
|
03
|
08
|
|
|
||||||||||
|
Date Month Year |
|
|
||||||||||||
II. Capital Raised during the Year (Amount in Rs. Thousand)
Public Issue |
NIL |
Right Issue |
NIL |
|
|
|
|
Bonus Issue |
NIL |
Private Placement |
NIL |
III. Position of mobilization and deployment of funds (Amount in Rs. thousand)
Total Liabilities |
|
Total Assets |
|
Sources of Funds :
Paid Up Capital |
|
Reserve & Surplus |
|
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|
|
|
||||||||||||||||
Secured Loans |
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Unsecured Loans |
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Application of Funds :
Net Fixed Assets |
|
Investment |
|
||||||||||||||||
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|
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|
||||||||||||||||
Net Current Assets |
|
Misc. Expenditure |
|
||||||||||||||||
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|
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|
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Accumulated Loss |
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|
|
1V. Performance of the Company (Amount in Rs. Thousand)
Turnover (including Stock Adjustment and other income) |
|
Total Expenditure |
|
||||||||||||||||
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|
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Profit Before Tax |
|
Profit After Tax |
|
||||||||||||||||
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|
|
|
||||||||||||||||
Earning per Share in Rs. |
Not Applicable* |
Dividend Rate |
|
V. Generic Names of Three Principal Products / Services of Company (As per monetary terms)
Item Code No. (ITC Code) |
|
|
|
|
|
Not Applicable |
|
Product Description |
|
|
| (A.K. Khanna) FINANCIAL ADVISER & CHIEF ACCOUNTS OFFICE CUM COMPANY SECRETARY *ITPO is registed under Sec-25 of the Companies Act 1956. Hence, Accountaing Standard 20 regarding “Earning per share” issued by ICAI is not applicable to the Company. |
(Rajiv Yadav) Executive Director |
(DR SHEELA BHIDE) |
INDIA TRADE PROMOTION Organisation
CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2008
| A. CASH FLOW FROM OPERATING | For the Year ended 31st March 2008 |
For the Year ended 31st March 2007 |
||
| Excess of income over expenditure Before Tax and Extraordinary Items Adjustments For: Depreciation:- For the year Loss/(profit) on Sale of Fixed Assests Provisions Provisions/liabilities no longer required Interest Income Assets written off Deferred revenue expenditure written off Operating surplus before working Capital Changes Adjustments For: |
359.08(1.72) 31.93(288.97) (4,442.32) 0.1544.72(461.43) (2300.89)3548.28 |
6858.76 (4,297.13) 2,561.63 785.96 3 ,347.59(114.99) 2.44(28.55)4442.32 (0.48)(2.34)4,298.40 NIL7,645.99 42,726.00 50,371.99 |
339.91(5.16)321.51 (265.06) (3,170.31) 0.0250.95(695.44) 230.08 198.12 |
4,763.23 (2,728.14) 2,035.09 (267.24) 1,767.85 (110.56) 8.40(2.13) 3170.31 -(4.58) 3,061.44 NIL4,829.29 37,896.71 42,726.00 |
Note:- Figure for previous year have been regrouped wherever considered necessary
| (A.K. Khanna) Sr. General Manager & Financial Adviser cum Company Secretary |
(Rajiv Yadav) Executive Director |
(DR SHEELA BHIDE) |
AUDITORS CERTIFICATE
We have examined the above Cash Flow Statement of India Trade Promotion Organisation for the year ended 31st March, 2008. The Statement has been prepared in accordance with the requirements of Accounting Standard – 3 issued by the Institute of Chartered Accountants of India and is based on and in agreement with the Balance Sheet and Income & Expenditure Account of the Company covered by our Report of August , 2008 to the members of the Company.
TIWARI & ASSOCIATES (SANDEEP SANDILL)
Chartered Accountants Partner M No. 85747
| S. No. | Auditors Report to the Members of India Trade Promotion Organisation |
Replies of the Board |
| We
have audited the attached Balance Sheet of India
Trade Promotion Organisation (ITPO),
New Delhi as at 31st March, 2008, related
Income and Expenditure Account and Cash Flow Statement of the
Company for the year ended on that date, annexed thereto, in
which are incorporated the accounts of Head Office, 5 (Five)
Overseas Liaison Offices and 4 (Four) Regional offices which we
have signed under reference to this report. These financial
statements are the responsibility of the company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audit. We have conducted our audit in accordance with the 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 mis-statements. 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 accounting estimates made by the management, as well as, evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis of our opinion and report that: - |
||
| 1. | Our comments on matters as
required by the Companies (Auditor’s Report) Order 2003
issued by the Company Law Board in terms of Section 227(4A) of
the Companies Act, 1956 are not given, as the Companies
(Auditor’s Report) Order 2003, specifically provides that
it should not apply to companies licensed to operate under
Section 25 of the Companies Act, 1956. | |
| 2. | Balance Sheet, Income & Expenditure Account and the Cash Flow Statements of the Company are in agreement with the books of accounts and returns. | |
| 3. | In our opinion, the Income and Expenditure Account, the Balance Sheet and the Cash Flow Statements complies with the mandatory Accounting Standards (AS) referred to in Section 211 (3C) of the Companies Act, 1956. | |
| 4. | | Factual Statement. No. comments. |
| 5. | Further
to our comments in paragraph 1 to 4 above, we also report that:- |
|
| 5.1 | Certain items of income and expenditure have not been accounted for on accrual basis of accounting as indicated in Accounting Policy No. I (b) of Schedule. | Factual Statement. Note No 1(b) of Schedule 19 Forming Part of Accounts refers. |
| 5.2 | Out of total VAT claims recoverable, claims aggregating to Rs. 32.50 lacs have become time barred. In our opinion these claims should have been written off from the Books of Accounts. However, the company has made provision for doubtful claims at Rs. 32.50 lacs. | Each VAT claim case is examined on relevant files to ascertain the reasons for non recovery. Action for write off from the books of accounts is taken on the basis of the facts of the case. The provision for doubtful recovery of the VAT amounting to Rs 32.50 lacs has been made to reflect a true and fair view of the state of the affairs of the Company. |
| 5.3 | The bills / claims raised on debtors, advances and deposits given to various parties including CPWD, the balances with foreign banks, various embassies abroad are subject to confirmation from the concerned parties. | Note No 8 of Schedule 20 Forming Part of Accounts refers. |
| 5.4 | Reference is invited to the following Notes to Accounts appearing in
Schedule 20: • Note No. 3 with regard to reconciliation of Fixed Assets with Physical Verification Report. • Note No. 4 with regard to revision of pay scales of employees. • Note No.5 with regard to balance with foreign banks . • Note No. 6 with regard to contested / disputed dues in respect to space rent from two licensees. • Note No.11 with regard to contested / disputed Entertainment Tax. • Note No.12 with regard to contested / disputed Property Tax. • Note No. 13 with regard to L & DO Demand. • Note No.14 with regard to fire in exhibition hall after balance sheet date • Note No.21 with regard to Recovery of Sundry Debtors. |
|
| 5.5 | The
Company is making defaults/delays in under mentioned statutory
compliances, as a results of which liabilities of
interest/penalty/additional cost may arise in future. The effects
of such additional costs are not taken in the accounts: - Title deeds not
executed. iv) PRAGATI MAIDAN COMPLEX: - Title deeds not executed. - Municipal tax provided in the books. v) TRADE FAIR AUTHORITY OF INDIA EMPLOYEES CONTRIBUTORY PROVIDENT FUND TRUST: - Accounts are pending for the year 04-05, 05-06, 06-07,07-08. No provisions for reduction in the value of investments/Deficit have been considered in the Accounts. vi) TRADE DEVELOPMENT AUTHORITY EMPLOYEES CPF TRUST: Accounts are pending for the year 07-08. No provisions for reduction in the value of investments/Deficit have been considered in the Accounts. |
Noted. Efforts are being made to file the returns at the earliest. The Ground Rent has not been paid as no demand for the same has been raised by the DDA till date. The request of the Company for extension of time for construction of Staff Quarter is pending with DDA. Note No 17 of Schedule 20 Forming Part of Account refers. Foot Note No 1(b) to Schedule No 4 pertaining to Fixed Assets refers. Foot Note No 1(a) to Schedule No 4 pertaining to Fixed Assets refers. Foot Note No 1(c) to Schedule No 4 pertaining to Fixed Assets refers. The position in this regard has been disclosed in Note No 12 of Schedule 20 Forming Part of Accounts refers Note No 18 of Schedule 20 Forming Part of Accounts refers. Note No 18 of Schedule 20 Forming Part of Accounts refers. |
| 5.6 | a) FOREIGN
TOURS: The selection of officials for
foreign visits/participation is not appropriate as some official
from unrelated departments like Administration,, Library,
Finance, Security, etc are being sent to foreign countries. |
The
Selection of officials for organising activities abroad is made
after considering requirement of work and capabilities of the
concerned officials. Further a new system of nominating Fair
officer, Project incharge & team, in advance, has been
introduced for better organisation of the event. |
| b) STAFF ATTENDANCE & UTILISATION : i) The Company has a huge work
force of employees. Several works which should have been done by
company’s staff members are being outsourced to CPWD and
other agencies which makes a huge financial burden on the
company.. |
At
the outset it is clarified that the number of employees on the
rolls of company for maintaining Civil, Electrical &
Conservancy arrangement etc in Pragati Maidan Complex is less
than the sanctioned strength for the above works. Since the
Pragati Maidan Exhibition Complex is spread over an area of about
140 acres having facilities as per international standards, it is
essential to outsource some of the professional nature of works.
However, efforts are made to ensure that wherever feasible the
work is carried out in-house. Therefore, there is no additional financial burden on the Company. |
|
| ii) Attendances of staff are
being made in different departments in register and overtime is
also being paid on approval from deptt.incharge. We suggest that
time machine should be installed in the ITPO for better
attendance records. Instead of overtime, better utilisation of
staff should be made by making shifts so that company has to make
payment of less overtime and less payment to outside agencies. |
As
per the procedure, the attendance of the officials is marked in
the attendance register maintained by the officer to whom the
concerned official reports. This decentralization ensures better
control and monitoring of the attendance of the officials.
However the suggestion of the auditor for installation of time
machine is under active consideration of the Management. Further, the overtime allowance is sanctioned on need basis on the recommendations of the controlling officer. As per the delegated powers, the concerned Head of the Division is empowered to sanction the overtime allowance to the eligible officials. The overtime to the employees is paid on basis of attendance marked in the centralized record maintained at Security Office which is considered adequate. In view of the nature of work of ITPO, it is not feasible to implement shift duties system in the entire office. However, wherever feasible, like Security Division, system of shift duties is being followed. |
|
| c) FOREIGN
OFFICES : Since we have not visited foreign. We have relied on the officer explanations/Vouchers/Statements given by ITPO for the voucher/Supports in foreign languages not understandable by us. | The
supporting documents of the major portion of the expenditure at
foreign offices are in English language. This primarily consists
of Salary & Allowances and Rent of offices/residences etc.
Further, in cases where supporting documents are in local
languages, the narration of the expenditures is recorded in
English on the payment vouchers attached with the Invoice/Bill
which are authenticated by the Resident Directors. This practice
is being followed consistently by the company. The same procedure
is being followed in the Indian Missions abroad. |
|
| d) REGIONAL OFFICE BANGALORE : During our visit to regional office we observed that most of activities of the area are taken care by Karnataka Trade Promotion Organisation (KTPO) and the feasibility of maintaining a seperate regional office need to be examined in view of huge expenses and very few business activities. |
It is Clarified that Bangalore office is playing an active role in supporting the activities/projects of head office. Besides, the Bangalore is also disseminating trade related information to the trade & industry and public at large in that region. | |
| 5.7 |
Reference is invited to the stated paras of the audit report:Any adjustment that arise on the resolution of the matter referred to in Para 5.1, 5.2, 5.3, 5.4 and 5.5 the effect thereof on the accounts cannot be determined at this stage. | |
| 6 | Subject to our comments at para 5
above, we report that: - |
|
| 6.1 | We have obtained all information
and explanations which to the best of our knowledge and belief
were necessary for the purpose of our audit. |
|
| 6.2 | In our opinion, proper books of
accounts, as required by law have been kept by the company so as
it appears from the examination of the books of accounts and
proper returns have been received from overseas liaison offices /
regional offices not visited by us, which we consider adequate
for the purpose of our audit. |
|
| 6.3 | In our opinion and to the best of
our information and according to the explanations given to us,
the said financial statements read together with notes thereon
are in conformity with the accounting principles generally
accepted in India, give a true and fair view:
For
Tiwari & Associates
Chartered Accountants (Sandeep Sandill) Partner Membership No. 85747 Place : New Delhi Dated : August , 2008 |