SCHEDULES ANNEXED TO AND FORMING PART OF THE ACCOUNTS (Contd.)
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.

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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. 5,68,63,878*
	(Rs. 4,37,35,549)

* Employees claims for certain benefits have not been provided for wherever the amounts are not ascertainable.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 36.62 lakhs (Rs Nil).

3. 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.

Definition of ‘Charitable Purpose’ as defined in Section 2(15) of the Income Tax Act, 1961 has been amended by Finance Act, 2008. However, as per the expert opinion, the activities of the company fall within the parameters of the amended provisions of Section 2(15) of the Income Tax Act, 1961. In view of this and the availability of exemption u/s 10(23C)(iv) of the Income Tax Act, 1961 to the company , no provision for income tax has been made in the accounts. 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 fee 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.

4. The physical verification of assets as on 31.3.2009 was conducted by a firm of Chartered Accountants. The Report is awaited. The discrepancies, if any, between physical verification report and the book balances shall be accounted for on receipt of the report and reconciliation thereof. Thus, the resultant financial impact, if any, is not ascertainable at this stage.

5. The pay scales of employees under Industrial DA pattern have been revised w.e.f. 1.1.2007 on the basis of the guidelines issued by the Department of Public Enterprises during the year. The arrears payable to the employees are being worked out. As such, the exact quantum of liability is not ascertainable at this stage. An estimated provision of Rs. 19.45 Crores (Rs 17.56 Crores) provided in accounts as on 31.3.2009 has been worked out keeping in view the increase in the pay and allowances as per the revised pay scales approved by the Board of Directors of the company.

6. a) Rs. 88,987 (Rs. Nil) included under ‘Other liabilities’ represents amounts credited by banks, details of which are awaited for adjustments.

b) Rs. 88,990 (Rs. 88,990) lying in Foreign Banks has not been confirmed by the concerned banks.

c) Debits of NIL (Rs. 58,146) in the Foreign Banks reconciliations have not been adjusted pending receipt of information from the concerned banks.

7. a) Space rent income amounting to Rs. 14,47,94,805 (Rs. 12,79,21,142) has
not been accounted for, as the same is disputed by the concerned parties.

b) An amount of Rs. 184.10 lakhs has not been recognized as income towards penalty charges for cancellation of certain events by third party organizers as the penalty amount works out to be more than the amount deposited by the parties. The amount to the extent of deposits / credits available with the company has, however, been accounted for. As the chances of realisation of the balance penalty are doubtful of recovery, the same shall be accounted for as and when the amount is recovered / adjusted. This disclosure is made in accordance with the Accounting Standard 9 issued by the Institute of Chartered Accountants of India.

8. Expenses include the following in respect of Directors’ remuneration:

a) Salaries and allowances	Rs. 15,76,626
	(Rs. 12,28,711)
b) Medical Reimbursement	Rs. 72,525
	(Rs. 77,781)
c) Foreign Service Contribution	Rs. 1,22,053
	(Rs. 1,91,500)
d) Productivity Linked Incentive	Rs. 1,33,606
	(Rs. 33,426)

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 O.M No.F.3(1)-E II(A)/99 dated 9th February 1999 of the Department of Expenditure and OM No. 2(53)/90-DPE(WC)-GIV dated 26th March, 1999 issued by the Department of Public Enterprises, was made during the year . The value of perquisites on this account is thus ‘Nil’.


9. Amounts due to/from various parties are subject to confirmation, reconciliation and/or adjustments, if any.

10. 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. The demand was set aside by the Financial Commissioner, Govt. of NCT, Delhi vide Order dt. 30th November, 2007. The Govt. of NCT, Delhi has filed a writ petition in the High Court of Delhi in April, 2009 against the Orders of the Financial Commissioner.

Further, the assessment proceedings for the period 1999-2000 to 2006-07 are yet to be completed. As the demand for the years 1996-97 to 1998-99 has been set aside by the Financial Commissioner, Govt. of NCT, Delhi, the company is of the view that no liability devolves on it towards Entertainment Tax on sale of entry tickets into Pragati Maidan for the year 1999-2000 to 2006-07. However, total liability towards Entertainment Tax and interest thereon for the period 1996-97 to 2006-07 will work out to Rs. 1,145.51 lakhs if the liability crystallises due to the writ petition filed by the Entertainment Tax Department in the High Court of Delhi. No provision for the same has been made in the accounts.

In addition, as per the Notification dt. 23rd January, 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 the admission fee charged is not more than Rs.500 per person. As the rates of tickets for entry into Pragati Maidan Complex charged during 2007-08 and 2008-09 were less than Rs. 500 per person, no liability on account of “Entertainment Tax” accrues on the Company.

11. The Rateable value of the Pragati Maidan Complex was re-fixed by the Municipal Corporation of Delhi retrospectively from 1983-84 and onwards vide Assessment Orders dated 4th & 5th February, 2004. As the refund accruing to the company consequent to the Assessment orders was not communicated by the MCD, the same were not accounted for in the books of accounts till 2007-08. The MCD vide letter dated 20th April, 2009 conveyed the admissible refund of Rs. 388.04 lakhs for the period 1983-84 to 2003-04 and the same has been accounted for in the books of accounts of the company for the year 2008-09 under the head “Other Income”.

Further, the unit area method for calculation of Property Tax was introduced by MCD w.e.f. 2004-05. The Pragati Maidan Complex was classified under Category ‘A’ and use factor as ‘4’ by MCD. However ITPO had been filing the property tax return by taking ‘E’ category and use factor as ‘1’ which entails tax liability at a lower rates. The contention of the company was not agreed to by the MCD and the matter was under dispute. Pending settlement of the dispute, the company was making an ad-hoc provision of Rs. 200 lakhs p.a. towards property tax in the books of accounts from the year 2004-05 and onwards.

The MCD vide its meeting held on 8th July, 2008 decided that for the purpose of payment of property tax, the Pragati Maidan Complex would be classified under ‘A’ category. The use factor for ITPO’s office building would be ‘1’, the use factor for exhibition halls during the course of occupation/use would be ‘3’ and use factor for vacant/unoccupied/not-in-use exhibition halls would be ‘2’. The use factor in respect of other units viz. restaurants, theatres, kiosks¸ open space would be taken as specified in the property tax guide.

Accordingly the revised property tax returns were filed for the years 2004-05 to 2007-08. The total liability of property tax, as per the calculation of the company, works out to be Rs 540.13 lakhs against the cumulative ad-hoc provision of Rs. 800 lakhs appearing in the books of accounts. The calculations/ revised returns of the company were accepted by MCD vide letter dt. 20th April, 2009. Accordingly, the excess provision of Rs. 259.87 lakhs has been credited under the head “Provision no longer required account” during the year 2008-09.

As per the revised return, prepared on the basis of the actual utilisation of halls, the property tax liability for the year 2008-09 works out to Rs 131.81 lakhs. The same has been accounted for in the books of accounts.

12. During the year 2007-08, the Land and Development Office (L&DO), 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 was 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 had 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 requested the Government, through 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 was 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 was 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 entire 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, ITPO 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 for Bazar/Restuarants operating in Pragati Maidan in the allotment letter dated 30th March, 1987. 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.

13. During the year, a portion of Exhibition Hall No. 7 (not insured) was destroyed in a fire. The loss to the building, electrical fittings and air-conditioning ducts etc. is not quantifiable as the affected portion is a part of the building which was capitalized as a whole. As such, no accounting entries to this effect have been carried out in the books of account. As and when these facilities will be restored, the same shall be accounted for.

However, furniture and fixtures, office equipments etc. destroyed in the fire amounting to Rs. 10,75,203 (Written Down Value of Rs. 28,757 ) have been written off from the books of accounts.

14. 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, the exhibition hall was constructed by ITPO at a total cost of Rs. 1,766.85 lakhs and handed over to KTPO during the year 2005-06. The Department of Commerce provided a grant of Rs. 1,325.22 lakhs to ITPO for the construction of the exhibition hall.

The Board of Directors of the Company 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.

15. 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. 1,637.05 lakhs was incurred by the company on construction of the exhibition hall. The Department of Commerce provided a grant of Rs. 1,206.40 lakhs to ITPO for the construction of the exhibition hall.

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.

16. 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.

17. The accounts of Employees Contributory Provident Fund Trusts of erstwhile TFAI and TDA have been finalized up to 31st March, 2008 and 31st March 2007 respectively. No provision for the losses of the Trusts, if any, in the subsequent years, has been made in the accounts as the same cannot be ascertained at this stage.

18. 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, 2009, if any, is not ascertainable.

19. Audit fee includes provision for increase in Statutory Audit fee by Rs.20,000/- which is subject to approval of the Board of Directors.

20. During the year, the Govt. of NCT of Delhi took up the work of construction of BRT Corridor at Mathura Road alongside Pragati Maidan Complex. The construction inter-alia involves shifting/demolishing some utilities of the company viz. shifting of cables, demolition of civil structure etc. As per the arrangements, M/s RITES Ltd. the executing agency on behalf of Govt. of NCT, paid Rs.97.63 lakhs to the company for restoration/shifting of the facilities. The restoration/shifting includes items of capital nature and revenue nature.

Accordingly, the amount of Rs. 22.66 lakhs received towards items of capital nature has been treated as sale price of the asset and accounted for in the books of accounts. The balance amount of Rs.74.97 lakhs received on account of items of Revenue nature has been credited to the respective expenditure heads in the accounts for 2008-09.

The expenditure on items of revenue nature for restoration of facilities incurred during the year has been charged to the revenue account. The remaining items of capital / revenue nature shall be charged to the respective heads as and when the same will be incurred.

21. The revenue grant of Rs. 374.28 lakhs (Rs. 58.36 lakhs) represents the subsidy for the fairs/exhibitions organized by the company at the behest of the government. The subsidy has been worked out and accounted for in accordance with the terms and conditions of the sanctions / commitments by the government.

22. Assets costing Rs.1.41 lakhs (Depreciated value Rs. 0.07 lakhs) were auctioned during the year alongwith unserviceable materials. As the sale price of individual items of Assets is not ascertainable, the depreciated value at the time of auction has been taken as the sale price of the assets sold.

23.

a)	Expenditure in foreign exchange is:-
	i)	Foreign Travel	Rs. 92,27,732
			(Rs. 74,43,047)
	ii)	Fairs and Exhibitions	Rs. 14,83,54,812
			(Rs. 9,95,91,762)
	iii)	Others	Rs. 5,11,44,021
			(Rs. 4,47,78,846)
b)	Earnings in foreign exchange:-
	i)	Space rent	Rs. 11,67,67,515
			(Rs. 14,26,44,290)
	ii)	Other receipts	Rs. 10,96,181
			(Rs. 6,85,104)

 

24. Segment reporting for the year ended 31st March 2009.

(i) Information about Primary Geographical Segments (Rs. in lakhs)

	Trade Promotion Activities in India	Trade Promotion Activities Abroad	Un- allocated	Total
Revenue
External	13856.82 (14454.05)	1897.47 (1255.44)	-	15754.29 (15709.49)
Inter-segment	-	-	-	-
Total revenue	13856.82 (14454.05)	1897.47 1255.44	-	15754.29 (15709.49)
Result
Segment result	4336.36 (3966.16)	- 1158.09 (- 797.78)	-	3178.27 (3168.38)
Unallocated expenditure	-	-	-	-
Net of unallocated income			- 142.20 (- 440.89)	- 142.20 (- 440.89)
Interest/Dividend income			5490.70 (4229.96)	5490.70 (4229.96)
Surplus before taxation and exceptional items				8526.77 (6957.45)
Prior Period Adjustments (Net)				37.15 (- 98.69)
Excess of income over expenditure				8563.92 (6858.76)
Other information
Segment assets	5901.40 (6202.16)	1084.40 (986.72)	67380.04 (57999.71)	74365.84 (65188.59)
Segment liabilities	4023.97 (4837.54)	957.83 (1112.79)	6469.83 (4898.34)	11451.63 (10848.67)
Capital expenditure	263.31 (114.75)	3.49 (0.24)	-	266.80 (114.99)
Depreciation	354.79 (355.47)	2.72 (3.61)	-	357.51 (359.08)
Deferred Revenue Expenditure written off	4.77 (44.72)	-	-	4.77 (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.

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. Subas Pani) Chairman & Managing Director	(Dr. Subas Pani) Chairman & Managing Director
	As per our report annexed for Tiwari & Associates Chartered Accountants
	(Sandeep Sandill) Partner M. No. 85747

Place :
Dated :

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Registration No.	0 5 5 - 8 4 5 3			State Code	5 5
Balance Sheet Date	31	03	09
	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

7 4 3 6 5 8 4

Total Assets

7 4 3 6 5 8 4

Sources of Funds :

Paid Up Capital	2 5 0 0	Reserve & Surplus	6 2 8 8 9 2 1
Secured Loans	N I L	Unsecured Loans	N I L

Application of Funds :

Net Fixed Assets	3 2 5 0 5 5	Investment	1 2 3 7 6 5
Net Current Assets	5 8 4 2 0 3 1	Misc. Expenditure	5 7 0
Accumulated Loss	N I L

IV. Performance of the Company (Amount in Rs. Thousand)

Turnover (including Stock Adjustment and other income)	2 2 0 6 9 4 6	Total Expenditure	1 3 5 0 5 5 4
Profit Before Tax	8 5 6 3 9 2	Profit After Tax	8 5 6 3 9 2
Earning per Share in Rs.	Not Applicable*	Dividend Rate	N I L

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) Sr. General Manager & Financial Adviser cum                                                                  Company Secretary *ITPO is registed under Sec-25 of the Companies Act 1956. Hence, Accounting Standard-20 regarding "Earning per share" issued by ICAI is not applicable to the Company.

(Rajiv Yadav) Executive Director

(Dr. Subas Pani) Chairman & Managing Director

A. CASH FLOW FROM OPERATING		For the Year ended   31st March 2009		For the Year ended   31st March 2008
Excess of income over expenditure Before Tax and Extraordinary Items Adjustments For:   Depreciation:-   For the year   Loss/(Profit) on Sale of Fixed Assets   Provisions   Provisions/liabilities no longer  required   Interest Income   Assets written off   Deferred revenue expenditure written off   Operating surplus before working Capital Changes Adjustments For: (Increase)/Decrease in Sundry Debtors and other Receiv. (Increase)/Decrease in Advances Increase/(Decrease) in Current Liabilities and Provisions NET CASH FROM OPERATING ACTIVITIES (A)              B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets Investments & Intercorporate Deposit Interest Income Decrease in Capital Reserve Deferred revenue expenditure made during the year NET CASG FROM INVESTING ACTIVITIES (B) CASH FROM FINANCIAG ACTIVITIES (C) Net Increase in Cash and Cash equivalents (A) +(B)+(C) Cash and cash equivalents at the beginning of the year Cash and Cash Equivalents at the close of the year Component of Cash and Cash equivalents as at the end of the year Cash and Cash equivalents Balances with bank current & saving account Balances with bank in deposite accounts Total	357.51 (12.65) 131.69 (457.95) (5,771.86) 0.29 4.77 (664.10) (608.14) 1,060.90	8563.92 (5,748.20) 2,815.72 (211.34) 2,604.38 (266.80) 15.41 (5,612.05) 5,771.86 10.37 (7.37) (88.58) NIL 2,515.80 50,371.99 52.60 2997.39 49837.80 52,887.79	359.08 (1.72) 31.93  (288.97) (4,442.32) 0.15 44.72   (461.43) (1,050.89) 3,548.28	6858.76   (4,297.13) 2,561.63   2,035.96 4,597.59 (114.99) 2.44 (1,278.55) 4,442.32 (0.48) (2.34) 3,048.40 NIL 7,645.99 42,726.00 26.56 1493.43 48852.00 50,371.99

Note:- Figures 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. Subas Pani) Chairman & Managing Director

AUDITORS CERTIFICATE

We have examined the above Cash Flow Statement of India Trade Promotion Organisation for the year ended 31st March, 2009. 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 , 2009 to the members of the Company.

 

TIWARI & ASSOCIATES                                                                                                     (SANDEEP SANDILL)
Chartered Accountants                                                                                                          Partner  M No. 85747

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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, 2009, 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.	As per Circular No. 2/5/2001-CLV-General Circular No. 8/2002 dated 22.03.2002 issued by Department of Company Affairs under Ministry of Law, Justice and Company Affairs, the provisions of section 274(1)(g) of the Companies Act, 1956, relating to disqualification of Directors are not applicable to the company as it being a Government Company.	Factual Statement.  No. comments.
5. 5.1	Further to our comments in paragraph 1 to 4 above, we also report that:- 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	The bills / claims raised on debtors, advances and deposits given to various parties including CPWD, various embassies abroad are subject to confirmation from the concerned parties.	Note No. 9 of Schedule 20 Forming Part of Accounts refers.
5.3 a)	Reference is invited to the following Notes to Accounts appearing in Schedule 20: Note No. 4 with regard to reconciliation of Fixed Assets with Physical Verification Report.	Factual Statement. No comments.
(b)	Note No.5 with regard to revision of pay scales of employees.	Factual Statement. No comments.
(c)	Note No.6 with regard to balance with foreign banks.	Factual Statement. No comments.
(d)	Note No.7(a) with regard to contested / disputed dues in respect to space rent from two licensees.	Factual Statement. No comments.
(e)	Note No.10 with regard to contested / disputed Entertainment Tax.	Factual Statement. No comments.
(f)	Note No. 12 with regard to L & DO Demand.	Factual Statement. No comments.
(g)	Note No.13 with regard to fire in exhibition hall .	Factual Statement. No comments.
5.4	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:
i )	SERVICE TAX: Half yearly Service tax returns are not filled for the year under audit i.e. half year ended Sept.08 and Mar,09.	It is clarified that the service tax payments for the year 2008-09 were deposited by the due dates and hence no penalty devolves on the company in remission of government dues. However, the filing of service tax returns has been delayed due to preparation of returns by collecting and collating the data on manual basis as the existing accounting software was developed before the applicability of service tax on ITPO. Efforts are being made to modify the software to comply with the requirement of the Service Tax Act.
ii)	LAND ALLOTED FOR STAFF QUARTERS: - No Ground Rent has been paid since allotment of land. - Construction of staff Quarters should have been done upto 30-06-01 but the construction has not been started. - Title deeds not executed.	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. 16 of Schedule 20 Forming Part of Accounts refers. Foot Note No. 1(b) to Schedule No. 4 pertaining to Fixed Assets refers.
iii)	FOUR FLATS AT ASIAD VILLAGE: -Title Deeds not executed.	Foot Note No. 1(a) to Schedule No. 4 pertaining to Fixed Assets refers
iv)	PRAGATI MAIDAN COMPLEX: - Title deeds not executed.	Foot Note No. 1(c) to Schedule No. 4 pertaining to Fixed Assets refers.
v)	TRADE FAIR AUTHORITY OF INDIA EMPLOYEES CONTRIBUTORY PROVIDENT FUND TRUST: - Accounts are pending for the year 08-09. No provisions for reduction in the value of investments/Deficit have been considered in the Accounts.	Efforts are being made to finalise the accounts. Note No 17 of Schedule 20 Forming Part of Accounts also refers.
vi)	TRADE DEVELOPMENT AUTHORITY EMPLOYEES CPF TRUST: Accounts are pending for the year 07-08,08-09. No provisions for reduction in the value of investments/Deficit have been considered in the Accounts.	Efforts are being made to finalise the accounts. Note No 17 of Schedule 20 Forming Part of Accounts also refers.
5.5 a)	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. ii) Time Machine have been installed in ITPO for marking attendance but it has not been linked to Leave Records and Salary Package for better management.	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. Action is in hand to link the attendance record with Leave Records and Salary Package.
b)	FOREIGN OFFICES : Since we have not visited foreign. We have relied on the 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.
5.6	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, and 5.4 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:
a)	In the case of Balance Sheet, of the state of affairs of the company as at 31st March 2009
b)	In the case of Income and Expenditure Account, of the excess of income over expenditure of the company for the year ended on that date and;
c)	In case of Cash Flow Statement for the year ended on that date. For Tiwari & Associates Chartered Accountants (Sandeep Sandill) Partner Membership No. 85747 Place : New Delhi Dated : August 21, 2009