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 are taken to capital or revenue account as per nature of expenditure. 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", "accumulated depreciation" and any impairment in value.
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 ASSETSi)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. 9,12,53,991 |
| (Rs. 6,63,75,030) |
Note:
(i) Amount deposited with courts in two cases is Rs. 41,92,427.
(ii) 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 (net of advances) not provided for Rs. 4.54 crore (Rs. 24.59 crore).
3. (a) The Company has been incorporated u/s 25 of the Companies Act, 1956 .
In the opinion of the Company, its activities in promoting India’s trade in the national economic interest, since its inception, fall within the parameters of the amended provisions of Section 2 (15) of the Income Tax Act 1961. Further, in view of the availability of exemption from Income Tax u/s 10(23c)(iv) from the assessment year 1989-90 onwards & registration u/s 12A of the Income Tax Act, 1961, no provision for taxation has been made in the accounts. The provisions of Accounting Standard – 22 regarding Deferred Tax are, thus, not applicable to the Company.
(b) During the year, a demand of Rs. 21.83 lakh was raised by the Income Tax Department for the assessment year 2008-09 despite the fact that the income of the Company was exempt from payment of Income Tax u/s 10(23C)(iv) of the Income Tax Act 1961. Further, the said demand was adjusted against the TDS refunds granted to the Company for the year. In appeal by the Company, the CIT (Appeals) vide order dated 11.07.2011 has upheld the contention of the company and vacated order of the Assessing Officer. However, the appeal effect thereof is yet to be given by the Assessing Officer. As such, no provision for the demand of Rs. 21.83 lakh has been made in the accounts.
4. The task of physical verification of the Company’s assets, as on 31.3.2011, entrusted to a professional firm, is in progress. The resultant financial impact of the discrepancies, if any, between physical verification and the book balances shall be accounted for on receipt of the report and reconciliation thereof - amount unascertainable at this stage.
5. The Guidelines of the Department of Public Enterprises (DPE) dated 26.11.2008 for revision of pay scales, perks, allowances, etc., permit PSEs to pay Performance Related Pay (PRP) to its employees, in addition to the Pay and Allowances. However, the PRP scheme is yet to be approved by the Government pending fulfilling of certain administrative formalities as required in the guidelines.
As in the preceding years, pending approval of the PRP scheme, a provision of Rs. 2.10 crore (Rs. 3.80 crore) has been made in the accounts (cumulative provision upto 31.3.2011-Rs. 10.40 crore).
Further, ad-hoc payments amounting to Rs. 5.18 crore were released to the employees till 31.3.2011 under the scheme as ‘‘interest free advances’’ on the undertaking that the amount paid would be recovered or adjusted as per decision on the subject.
6. The amounts aggregating–
a) Rs. 90,851 (Rs. 88,987) included under ‘‘Other liabilities’’ represents credits by the banks, details of which are awaited for carrying out adjustments in the accounts.
b) Rs. 6,62,184 (Rs. 6,43,156) lying in Foreign Banks have not been confirmed by the concerned banks.
7. a) Space rent amounting to Rs. 17.81 crore (Rs. 15.98 crore) has not been recognised as income, as the same is disputed by the concerned parties.
(b) An amount of Rs. 61.33 lakh (Rs. 233.42 lakh) has not been recognised as income for penalty charges due to cancellation of an event by a third party organiser. The organiser had not paid any amount to the Company and the chances of recovery of penalty are considered doubtful. The same shall, therefore, be accounted for as and when realised.
8. Expenses include the following in respect of Directors’ remuneration:
a) Salaries and allowances Rs.Rs.32,25,694
(Rs 17,04,000)
b) Medical Reimbursement Rs. Rs.87,224
(Rs.42,375)
c) Leave Travel Concession Rs. 69,172
(Rs. 56,240)
d) Foreign Service ContributionRs. 3,00,532
(Rs. 71,446)
(e) Performance Related PayRs. 1,76,287
(Rs. 93,344)
(f) Monetary Value of PerquisitesRs. 3,45,303
as per Income Tax Rules(Rs. 93,162)
9. Amounts due to/from various parties are subject to confirmation, reconciliation and adjustments, if any.
10. The Entertainment Tax Department, Govt. of NCT, Delhi, had considered sale of entry tickets into Pragati Maidan Complex as subject to Entertainment Tax. Accordingly, a demand for the years 1996-97 to 1998-99 was raised on the Company, which was contested. The demand was set aside by the Financial Commissioner, Govt. of NCT, Delhi, vide Order dt. 30th November, 2007. However, the Govt. of NCT, Delhi filed a writ petition in the High Court of Delhi in April, 2009, against the orders of the Financial Commissioner which is still pending there for disposal.
Further, assessment proceedings for the years 1999-2000 to 2006-07 have not yet been completed. In the circumstances detailed above, the Company is of the view that no liability will devolve on it, in the matter for the years 1999-2000 to 2006-07. The amount of Entertainment Tax and interest thereon for the period 1996-97 to 2006-07, if levied, will work out to Rs. 1,761.33 lakh. No provision for the same has been made in the accounts.
Further, the Govt. of NCT of Delhi, as per the Notification dated 23rd January, 2007, has exempted the Company from levy of Entertainment Tax on sale of entry tickets into Pragati Maidan Complex during exhibition period provided the admission fee charged is not more than Rs. 500 per person. As the rate of tickets for entry into Pragati Maidan Complex, charged during 2007-08 to 2010-11 were less than Rs. 500 per person, no liability on account of “Entertainment Tax” accrues on the Company.
11. The Govt. of India had set up the Media Centre at Pragati Maidan Complex for Commonwealth Games (CWG), New Delhi, held in October, 2010. The Ministry of Information and Broadcasting vide Order No. 10/34/2009-B(Fin) dated 15th January, 2010 sanctioned an amount of Rs. 75.77 crore to the Company for usage of certain space and various projects in Pragati Maidan Complex of revenue and capital nature. Against the sanctioned amount, Rs.75 crore released to the Company, has been accounted for as under:-
(a) Rs. 24.11 crore as licence fee for usage of space and electricity charges etc., in various halls.
(b) Rs.14.32 crore charged off as revenue expenditure under “ Maintenance of Pragati Maidan- CWG 2010” and matching amount reflected as ‘Funds from Government for Revenue Expenditure – CWG 2010’ in the Income & Expenditure Account.
(c)Rs. 30.03 crore on projects of capital nature added to the respective assets and the matching contribution from the Government shown as deduction against the same in conformity with the Accounting Standard 12.
(d)The balance refundable amount of Rs.6.54 crore is reflected as liability as on 31st March 2011, under the head “Advance Payments & Deposits”.
12. A third party organiser had booked Hall No. 7 for holding an exhibition at Pragati Maidan in July 2008. A portion of the Hall, which was under their possession, was destroyed in a fire. As a result of the fire, there was damage to the property and infrastructure of the Company, besides loss of revenue and reputation. In March 2009, the Company filed a claim against the organiser for Rs. 16.15 crore plus interest @18% p.a. before the Arbitrator.
Subsequently, in November 2009 the organiser also filed a claim of Rs. 7.82 crore plus interest @12% p.a. on the Company. The Arbitrator, vide order dated 29.4.2010 directed that the claim filed by the Company in March 2009 may be treated as its counter claim on the objections raised by the organiser. As the proceedings in the matter are underway, no accounting entries for the claim / counter claim have been made in the accounts.
13. A Subsidiary company viz. Karnataka Trade Promotion Organisation (KTPO) was promoted by the Company in December, 2000 u/s 25 of the Companies Act, 1956, in collaboration with Karnataka Industrial Area Development Board (KIADB), an undertaking of the Government of Karnataka, with an authorized share capital of Rs. 50 lakh. The Company paid Rs. 25.50 lakh towards its 51% equity contribution. As per the MOU signed with the co-promoters, the Company was also required to contribute an exhibition hall to KTPO on the developed land to be provided by KIADB. The exhibition hall was constructed by ITPO at a total cost of Rs. 1,793.77 lakh and handed over to KTPO during the year 2005-06. The Department of Commerce provided a grant of Rs. 1,325.22 lakh to ITPO for the purpose.
The Board of Directors of the Company in their 133rd Meeting held on 9.9.2004, decided that the Authorized Share Capital of the KTPO be enhanced from Rs. 50 lakh to Rs. 2,000 lakh. It was also decided that the Company’s contribution of the exhibition hall to the extent of Rs. 1,020 lakh and developed land by KIADB to the extent of Rs. 980 lakh, be treated as their capital contributions to KTPO. The amount spent by both the co-promoters over and above the aforesaid amounts be treated as non-interest bearing subordinate debt to KTPO, to be refunded subject to annual review and cash flow situation of KTPO subsequent to the commencement of commercial activities by them. Accounting entries 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 lakh, the share certificates for Rs. 994.50 lakh are yet to be issued to the Company by KTPO.
14. a) A Subsidiary company viz. Tamil Nadu Trade Promotion Organisation (TNTPO) was promoted by the Company in November 2000 u/s 25 of the Companies Act, 1956, in collaboration with Tamil Nadu Industrial Development Corporation (TIDCO), a Govt. of Tamil Nadu Undertaking, with an Authorized Share Capital of Rs. 50 lakh. The issued capital of TNTPO is Rs. 1 lakh, of which the Company has paid Rs. 0.51 lakh, towards its 51% Equity Share.
As per the MoU signed with the Co-promoters, the Company was required to contribute an exhibition hall to TNTPO on the developed land to be provided by TIDCO, the co-promoter. Expenditure of Rs. 1,637.48 lakh was incurred by the Company on construction of the exhibition hall. The hall was handed over to TNTPO during the year 2000-01. The Department of Commerce provided a grant of Rs. 1,206.40 lakh to ITPO for the purpose.
b) 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 dated 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.Ms dated 03.02.2003 are yet to be accepted by the Company. Pending agreement to the revised terms and conditions, no accounting entries for the amounts proposed to be reimbursed by TNTPO have been made in the accounts of the Company.
15. 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.
16. Expenditure under the head ‘Maintenance of Pragati Maidan’ includes Rs. 3.62 crore towards improvement of parking facilities opposite Gate No. 1, Pragati Maidan on the land, the ownership of which does not vest with the company. However, this area is being used by the Company since its inception.
The work was undertaken in pursuance of decision taken in the meeting of Committee of Secretaries held under the Chairmanship of Cabinet Secretary on 13.8.2010 wherein it was decided that the matching subsidy shall be provided by the Government to ITPO through Department of Commerce. The matter is under consideration in the Department of Commerce. As the Company is hopeful of receiving the grant, the amount of Rs. 3.62 crore has been shown as recoverable from the Department of Commerce by contra credit to Revenue Grant from the Government in the Income & Expenditure account.
17. During the year, the Company organised India’s participation in Shanghai Expo on the directives of the Government of India. As per the funding pattern for the event, the Government of India approved a grant of Rs. 24 crore against which Rs. 19.20 crore has been received by the Company and balance Rs 4.80 crore is yet to be received.
Further, after the conclusion of the event, the Company has requested the Department of Commerce for an additional grant of Rs. 9.47 crore keeping in view the expenditure/ deficit incurred by it on organising the event. The matter regarding sanction of additional grant is under consideration in the Department of Commerce. As the Company is hopeful of receiving the additional grant, the amount of Rs. 14.27 crore (Rs. 4.80 crore plus Rs. 9.47 crore) has been shown as recoverable from the Department of Commerce in the accounts.
18. Revenue Grant from Government includes Rs. 3.09 crore towards subsidy for various fairs/exhibitions organised by the Company at the behest of the Government. The subsidy has been accounted for in accordance with the terms and conditions of the sanctions / commitments by the Government.
19. Based on a study carried out by a professional firm, no case of impairment of assets exists as at 31st March 2011 under the provisions of Accounting Standard - 28 on Impairment of Assets.
20. On the basis of the efforts undertaken by the Company during the year, 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, 2011, if any, is not ascertainable.
21. Certain assets costing Rs. 1108.39 lakh - Depreciated value Rs. 60.03 lakh (Rs.164.56 lakh - Depreciated value Rs. 8.18 lakh) were auctioned during the year alongwith unserviceable materials. As the sale price of the Assets auctioned is not ascertainable, their depreciated value at the time of auction has been taken as the sale price of the assets auctioned.
22 Sundry Debtors of Rs. 30.57 crore as on 31st March 2011 includes Rs. 20.81 crore outstanding for more than 3 years which are doubtful for recovery/under dispute/litigation. Against Rs. 20.81 crore, provision for doubtful recovery of Rs. 18.06 crore has been made in accordance with the accounting policy of the company.
23. Disclosure as per AS-15 (Employee Benefits)
General description of various defined employee benefit schemes are as under:-
- Provident Fund
- Leave
-
Gratuity
The schemes at b & c are unfunded and recognized in the books on the basis of actuarial valuations. The summarized position of various defined benefits recognized in the Income & Expenditure Account and Balance Sheet are under:-
i.Expenses recognized in the Income & Expenditure Account (Amount in Rs)
-
Gratuity EL & HPL Interest cost
25636297 7465754 Current service cost 14347141 6820983 Net actuarial (gain)/loss recognised in the period 10767275 54192374 Expenses recognised in the statement of Income & Expenditure Account 50750713 68479111
-
Gratuity EL & HPL Present value of the obligation at end of the year 346962568 155599752 Net liability/(assets) recognised in Balance Sheet and related analysis 346962568 155599752 Funded Status (346962568) (155599752)
iii. Changes in the present value of the defined benefit obligations:
-
Gratuity EL & HPL Present value of the obligation at the beginning of the period 311596687 90742594 Interest cost 25636297 7465754 Current service cost 14347141 6820983 Benefits paid (if any) (15384833) (3621953) Actuarial (gain)/loss 10767276 54192374 Present value of the obligation at the end of the year 346962568 155599752
(iv)The assumptions employed for the calculations are tabulated
-
Gratuity EL & HPL Discount rate 8.25% per annum 8.25% per annum Salary Growth Rate 5.00% per annum 5.00% per annum Mortality LIC 94-96 Ultimate LIC 94-96 Ultimate Withdrawal rate (Per Annum) 2.00% p.a. (18 to 60 Years) 2.00% p.a. (18 to 60 Years)
| 24. a) | Expenditure in foreign exchange :- |
|
|
|
i) | Foreign Travel | Rs. 1,31,90,845 |
|
|
|
(Rs. 95,08,331)
|
|
ii) | Fairs and Exhibitions | Rs. 18,73,53,741 |
|
|
|
(Rs 16,66,48,298)
|
|
iii) | Others | Rs. 1,82,49,003 |
|
|
|
(Rs. 5,80,31,254) |
| b) | Earnings in foreign exchange:- |
|
|
| i) | Space rent | Rs. 11,86,64,599 | |
| (Rs. 12,71,41,025) |
|||
| ii) | Other receipts | Rs. 6,95,540 | |
|
|
(Rs. 14,25,899) | |
25. Segment reporting for the year ended 31st March 2011.
(i) Information about Primary Geographical Segments
(Rs. in lakh)
| Trade Promotion Activities in India | Trade Promotion Activities Abroad | Un-allocated | Total | |
| Revenue |
|
|
|
|
| External | 18519.10 (16256.90) |
6466.38 (2118.11) |
|
24985.48 (18375.01) |
| Inter-segment | - |
- |
|
- |
| Total revenue | 18519.10 (16256.90) |
6466.38 (2118.11) |
|
24985.48 (18375.01) |
| Result | ||||
| Segment result | 5387.60 (5860.42) |
-2243.11 (-1105.31) |
|
3144.49 (4755.11) |
| Unallocated expenditure net of unallocated income |
|
-817.78 (-348.45) |
-817.78 (-348.45) |
|
| Interest/Dividend income |
|
4838.14 (5663.25) |
4838.14 (5663.25) | |
| Surplus before taxation and exceptional items |
7164.85 (10069.91) | |||
| Prior Period Adjustments (Net) | 77.39 (88.61) | |||
| Extra Ordinary Items | Nil (2223.97) |
|||
| Excess of income over expenditure | 7087.46 (7757.33) | |||
| Other information |
|
|
|
|
| Segment assets | 12076.88 (10315.38) |
2324.87 (1117.34) |
81146.38 (76758.13) | 95548.13 (88190.85) |
| Segment liabilities | 9837.40 (9262.65) |
673.40 (2726.33) |
7278.32 (5530.33) |
17789.12 (17519.31) |
Capital expenditure |
8738.24 (1100.98) |
Nil (0.41) |
- |
8738.24 (1101.39) |
Depreciation |
345.95 (261.62) |
Nil (2.31) |
|
345.95 (263.93) |
Deferred Revenue Expenditure written off |
2.46 (3.24) |
- | - | 2.46 (3.24) |
| 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 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.
26. Figures in brackets relate to previous year, which have been recast and regrouped wherever necessary.
27. 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 |
(Neeraj Kumar Gupta) Executive Director |
(Rajeev Kher) Chairman & Managing Director |
|
|
|
Dated: 29th August 2011
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 |
|
||||||||||||
Balance Sheet Date |
31 |
03 |
11 |
||||||||||||
| DateMonthYear | |||||||||||||||
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 |
|
||||||||||||||||
Secured Loans |
|
Unsecured Loans |
|
Application of Funds :
Net Fixed Assets |
|
Investment |
|
||||||||||||||||
Net Current Assets |
|
Misc. Expenditure |
|
||||||||||||||||
Accumulated Loss |
|
IV. Performance of the Company (Amount in Rs. Thousand)
Turnover (including Stock Adjustment and other income) |
|
Total Expenditure |
|
||||||||||||||||
Profit Before Tax |
|
Profit After Tax |
|
||||||||||||||||
Earning per Share in Rs. |
|
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) Sr. General Manager & Financial Adviser cum Company Secretary |
(Neeraj Kumar Gupta) Executive Director |
(Rajeev Kher) Chairman & Managing Director |
INDIA TRADE PROMOTION Organisation
CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2011
| (Rs. in Lakhs) | ||||
| A. CASH FLOW FROM OPERATING | For the Year ended
31st March 2011 |
For the Year ended
31st March 2010 |
||
| Excess of income over expenditure Before Tax and Extraordinary Items Adjustments For: Depreciation:- For the year Prior Period Loss/(Profit) on Sale of Fixed Assets Provisions Provisions/liabilities no longer required Interest & Dividend 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 Cash generated from operation before extraordinary items Less: Extraordinary Items 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 In Hand and Cash equivalents Balances with bank current & saving account Balances with bank in deposite accounts Total |
345.95 - (4.20) 68.89 -201.85 (-5056.7) 4.17 2.46 (1,608.39) 223.15 471.66 |
7087,46 4,841.28 2,246.18 -913.58 --------------- 1,332.60 1,332.60 (2,660.68) 65.77 497.62 5056.70 - - 2,959.41 NIL 4,292.10 69,108.51 73,400.52 83.64 5141.88 68,175.00 73,400.52 |
263.93 6.66 (0.59) 125.98 (343.02) (5816.83) 1.11 3.24 (184.09) (2,728.95) 6410.70 |
9981.30 (5,759.52) 4,221.78 (3,497.66) 7,719.44 2,223,97 5,495.47 (1,101.39) 10.86 5,998.95 5,816.83 107525.25 NIL 16,220.72 52,887.79 69,108.51 33.90 10,979.61 58,095.00 69,108.51 |
Note:- Figures for previous year have been regrouped wherever considered necessary.
| (A.K. Khanna) Sr. General Manager & Financial Adviser cum Company Secretary |
(Neeraj Kumar Gupta) Executive Director |
(Dr.Rajiv Kher) Chairman & Managing Director |
AUDITORS CERTIFICATE
We have examined the above Cash Flow Statement of India Trade Promotion Organisation for the year ended 31st March, 2011. 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 , 2010 to the members of the Company.
Kishore & Kishore
Chartered Accountants
(Anshu Gupta)
Partner M No.077891
FRN-00291N
Chartered Accountants
(Anshu Gupta)
Partner M No.077891
FRN-00291N
| S.No | Auditors Report | Management Reply |
| We have audited the attached Balance Sheet of India Trade Promotion Organisation (ITPO), New Delhi as at 31st March 2011, related Income & 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, 4 (Four) 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: - |
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| 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. |
We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit. | Factual Statement. Note No. 1(b) of Schedule 20 Forming Part of Accounts refers. |
| 6 | In our opinion, proper books of accounts, as required by law have been kept by the Company so far as it appears from the examination of the books of accounts and returns received from overseas liaison offices/regional offices not visited by us and considered adequate for the purpose of our audit. | Note No. 9 of Schedule 21 Forming Part of Accounts refers. |
| 7 7.1 |
urther to our comments in paragraph 1 to 6 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. 1(b) of Schedule 19. |
. Factual Statement. No comments. |
| 7.2 | Reference is invited to the following Notes to Accounts including those appearing in Schedule 20 : a)Non-accounting of financial impact, if any, on physical verification of assets as on 31.03.2011, for want of report in the matter. [Note No. 4] No action taken on physical verification report of assets as on 31.03.2009. (Amount indeterminate) b) Making provision under Performance Related Pay Scheme (PRP) to employees without approval of the scheme by the Company- Rs. 2.10 crore for the year and cumulative up to the year Rs. 10.40 crore and release of Rs.5.18 crore up to 31.03.2011. [Note No. 5] c) Non-confirmation of the balances with foreign banks Rs. 6,62,184/- [Note No. 6(b)] d) Non-recognition of rent Rs. 17.81 crore due to dispute. Amount indeterminate [Note No. 7 a)] e) 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, and the consequential effect thereof, if any, remains unidentified. [Note No. 9] f)Making no provision for contested entertainment-tax. Amount indeterminate [Note No. 10] g)Non-accounting of amounts for claims and counter-claims due to fire in exhibition hall. [Note No. 12] h)Sums of Rs. 17.89 crore shown due from the Department of Commerce, Govt. of India – Rs. 3.62 crore for matching subsidy for Parking facilities and Rs.9.47 crore for additional grant for Shanghai Expo yet to be sanctioned along with Rs. 4.80 crore grant not yet received from them, lack confirmation for showing the same as receivable from them. [Note No. 16 & 17] i)The sum of Rs. 8.99 lakh adjusted during the year, but in the nature of write-off, required Board of Directors approval. |
Factual Statement. No comments. It is clarified that the physical verification of fixed assets as on 31st March, 2011 is in progress. The shortages/ excesses finally determined shall be accounted for after receipt of report and reconciliation thereof with the book balance which shall automatically cover the shortages/ excesses of the physical verification report of 31st March 2009. Efforts shall be made to complete the process in the accounts for 2011-12. Note No. 5 of Schedule 20 Forming Part of Accounts refers. Factual Position. No comments. Factual Statement. The position has been clarified in Note No. 7(a) of Schedule 20 Forming Part of Accounts. It is further clarified that the disputed amount of Rs. 17.81 crore has not been recognised as income in compliance with the Accounting Standard – 9, relating to Revenue Recognition, issued by the Institute of Chartered Accountants of India. Factual statement. Note No. 9 of Schedule 20 Forming Part of Accounts refers. Factual statement. Note No. 10 of Schedule 20 Forming Part of Accounts refers. Factual statement. Note No. 12 of Schedule 20 Forming Part of Accounts refers Factual statement. Note No. 16 & 17 of Schedule 20 Forming Part of Accounts refers. Discounted rentals were charged from a govt. organisation for their participation in Aahar & Tourism Expo- Shillong 2007 with the post-facto approval of the CMD. Accordingly, the reversal of the amount earlier shown as recoverable from the government organisation cannot be construed as write off of debts as CMD is fully empowered to fix and revise the rentals for ITPO’s events as per delegated powers. |
| 7.3 | For defaults/delays committed for the under mentioned statutory compliances, liabilities for interest/penalty/additional cost may arise in future – amounts presently indeterminate : iv) Construction of Staff Quarters that should have been completed by 30.06.01, but construction has not yet even started. |
Factual Statement. No comments. It is clarified that the monthly Service Tax payments were deposited in the treasury account by the due dates. Hence, no penalty devolves on the Company in remission of the government dues. However, filing of the Service Tax return has been delayed due to administrative reasons. Action is in hand to file the Service Tax return for the half year ended 30th September, 2010 and compile the Service Tax return for the half year ended 31st March, 2011. Expert opinion on this issue would be obtained and action taken accordingly. The Company’s primary objective is trade promotion through fairs/exhibitions in India and abroad. In the opinion of the Company, DVAT is not applicable on ITPO for sale of tender documents and unserviceable assets. However, expert opinion on this issue would be obtained and action taken accordingly. Factual Statement. Note No. 15 Schedule 20 of Forming Part of Accounts refers.
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| 7.4 | For foreign offices not visited by us, we have relied on the explanations/Vouchers/Statements given by ITPO in foreign languages authenticated by the Resident Directors in support. |
The supporting documents of the major portion of the expenditure of 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 language (other than English) , the narration of expenditure 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. Same procedure is being followed in the Indian Missions abroad. |
| 7.5 | 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 significant accounting policies and notes thereon and subject to our observations given in paragraph 7.2 h) regarding provisions of Rs. 17.89 crore shown receivable from Department of Commerce, Govt. of India, paragraph 7.2 b) making provision of Rs. 2.10 crore under PRP Scheme without approval of the scheme by the Company thereby overstating the net income of the Company by Rs. 15.79 crore for the year and overstating the assets by Rs. 17.89 crore and overstating the liabilities by Rs. 2.10 as at 31.03.2011, and indeterminate consequential impact of paras 7.2 a) , 7.2 d), 7.2 f), 7.2 g) & 7.3 and paras 7.2.c) & 7.2 e) due to lack of confirmations on the accounts, and write off of Rs. 8.99 lakh without Board approval (Para 7.2 i), are in conformity with the accounting principles generally accepted in India and give a true and fair view : (i) in the case of Balance-sheet of the State of affairs of the Company as at 31st March 2011 ; (ii) in the case of Income and Expenditure account of the net Income of the Company for the year ended on 31st March 2011; and (iii)in the case of Cash Flow Statement of the cash flow for the year ended on 31st March 2011.
For Kishore & Kishore
Chartered Accountants
| Factual Statement. No comments. |