Your Directors have pleasure in presenting the 51st Annual Report together with theaudited accounts of the Corporation for the year ended 31st March 2016.
Your Corporation has achieved a total turnover of Rs 465.69 crore during the financialyear 2015-16 as against Rs 504.19 crore in the previous year 2014-15. During the financialyear 2015-16 the Corporation has recorded a Net Profit (before tax) of Rs 32.42 crore asagainst Net Profit (before tax) of` 38.95 crore in previous year 2014-15.
The highlights of the financial the Corporation (Standalone) are given below:
(Rs in crore)
|Particulars ||2015-16 ||2014-15 |
|Turnover ||465.69 ||504.19 |
|Operating Profit/(Loss) ||42.51 ||51.68 |
|Less: Depreciation ||8.03 ||10.26 |
|Less: Prior period adjustments & Extra ordinary items and Finance Cost ||2.06 ||2.47 |
| || || |
|Profit/(Loss) before Tax ||32.42 ||38.95 |
|Add: Deferred Tax ||2.43 ||4.42 |
|Less: Provision for ||12.30 ||9.50 |
|Income Tax || || |
|Less:- Provision for ||- ||0.01 |
|Wealth Tax || || |
|Add: Provision for ||- ||0.51 |
|Income Tax for earlier years written back || || |
|Profit/(Loss) after Tax ||22.55 ||34.37 |
|Amount available for appropriation ||22.55 ||34.37 |
|Proposed Dividend ||12.87 ||17.15 |
|Dividend Tax ||2.62 ||3.49 |
|Equity Capital ||85.77 ||85.77 |
|Capital Employed ||282.94 ||279.77 |
|Rate of Return on || || |
|Capital: || || |
|Before Tax ||37.80% ||45.41% |
|After Tax ||26.29% ||40.07% |
|Rate of Return on || || |
|Capital Employed: || || |
|Before Tax ||11.46% ||13.92% |
|After Tax ||7.97% ||12.29% |
The Operating Ratio has marginally increased by 1.12% in the current year with theoverall operating ratio of 90.87% as against 89.75% in the previous year 2014-15.
Division wise Financial Performance
The Division wise financial performance of the Corporation is summarized as under :
(i) Hotels Division achieved a turnover of ` 277.55 crore during the year 2015-16 asagainst Rs 283.90 crore in the previous year 2014-15 and earned the net profit of ` 38.90crore as against the net profit of ` 10.81 crore in the previous year.
(ii) The turnover of Ashok International Trade (AIT) Division increased to Rs 16.23crore from Rs 10.96 crore in the previous year.
The AIT Division earned Net Profit of ` 2.37 crore as compared to net profit of ` 0.84crore.
(iii) The turnover of Ashok Travels & Tours
Division is Rs 104.37 crore in the year 2015-16 against Rs 119.69 crore in the previousyear 2014-15. The ATT Division incurred a loss of Rs 10.37 crore as against of net profitRs 0.75 crore in the previous year 2014-15. The loss is due to providing a provision of Rs13.14 crore in the L Block property case in which ITDC deposited a sum of Rs13.14 crore with the Registry of Delhi High Court for filing an appeal before the DivisionBench of the High Court.
(iv) The turnover of the Ashok Events Division including Ashok Creatives has beenrecorded at Rs 23.66 crore during 2015-16 as against Rs 12.33 crore in the previous year2014-15. The Division earned a profit of Rs 4.01 crore during 2015-16 as against netprofit of` 2.11 crore during 2014-15.
(v) The Engineering Division including SEL Projects has achieved a turnover of ` 15.31crore during the year 2015-16 as against Rs 8.09 crore in the previous year 2014-15 withnet loss of Rs 2.84 crore during 2015-16 as against net loss of Rs 5.34 crore in previousyear 2014-15.
(vi) The Ashok Institute of Hospitality and Tourism Management (AIH&TM) achievedturnover of Rs 3.28 crore during 2015-16 as against Rs 18.23 crore in the previous year2014-15 with net loss of Rs 1.54 crore during 2015-16 as against a net profit of ` 2.79crore during 2014-15.
(vii) The Corporate HQ being the administrative office earned an income of Rs 25.30crore (previous year Rs 27.72 crore) mainly consisting of income from interest on shortterm deposits with banks from the surplus funds available with it.
There is no change in authorized and paid up share capital of the Corporation. TheAuthorized Share Capital of the Corporation is ` 150 crore and the paid up Share Capitalis ` 85.77 crore as on 31st March 2016.
The Board of Directors recommended a dividend of 15% for the financial year 2015-16 onthe equity share capital of the company.
Transfer to Reserve
An amount of Rs 7 crore has been transferred to the General Reserves.
Rating of ITDC vis--vis MoU targets
Performance of the Company for the year 2014-15 has been notified as Goodwith Composite Score 2.87 by Department of Public Enterprises (DPE) in terms of the MoUsigned with the Government of India.
Management Discussion and Analysis
The report on the Management Discussion and Analysis is placed at Annexure-I.
The Revised Capital Budget Estimates towards capital expenditure for 2015-16 was `38.57 crore which included Rs 36.67 crore for renovation/improvement on existing hotelsand catering units. The capital expenditure during 2015-16 was Rs 13.82 crore out of whichRs 6.88 crore was capitalized and Rs 6.94 crore was charged to revenue.
The Planned Capital outlay for the year 2016-17 is Rs 57.05 crore out of which Rs 54.58crore relates to renovation/improvement in existing hotels and catering units.
Procurement from MSME
The Corporation has complied with guidelines issued by DPE in this regard.
Implementation of Official Language Policy
During the year 2015-16 the Company continued its efforts to give impetus to the useof Hindi in official work through motivation and training. Cash incentives were granted toemployees on doing prescribed quantum of work in Hindi. Hindi workshops were organized toprovide practical training of noting-drafting and other works in Hindi. Various Hindicompetitions were also organized during Hindi Fortnight celebrations for giving impetus tothe use of official language in day to day work. Hindi Kavigoshthi Hindi Natya Manchanand Hindi Prize Distribution Event were also organized to encourage official language inthe Corporation.
Conservation of Energy & Technology Absorption
Commitment towards energy conservation remains in the units at various stages ofoperations. Commercial considerations energy conservation policies and practices play avital role in the endeavours made in this direction.
Since your Companys operations do not involve technology absorption theparticulars as per Rule 8(3)(B) of the Companies (Accounts) Rules 2014 regardingtechnology absorption are not applicable.
Foreign Exchange Earnings & Outgo
The Direct Foreign Exchange Earnings during the year 2015-16 has increased to Rs 17.95crore from Rs 12.99 crore in the previous year.
The Corporation has seven subsidiary companies viz. (i) Donyi Polo Ashok HotelCorporation Ltd (ii) Assam Ashok Hotel Corporation Ltd (iii) MP Ashok Hotel CorporationLtd (iv) Pondicherry Ashok Hotel Corporation Ltd v) Ranchi Ashok Bihar Hotel CorporationLimited. (vi) Utkal Ashok Hotel Corporation Ltd (vii) Punjab Ashok Hotel Company Ltd. TheHotel Units were set up under the aforesaid subsidiary companies at Itanagar GuwahatiBhopal Puducherry and Ranchi respectively. The operation of Hotel unit at Puri is closedsince March 2004 and the Hotel has been planned to be leased out. The Hotel project atAnandpur Sahib is incomplete. Besides the Corporation has one Associate Company i.e. ITDCAldeasa India Private Limited.
The Annual Accounts of all the subsidiary companies have been audited and finalized andthe Consolidated Annual Accounts have been prepared and presented in this Annual Report. Astatement containing the salient features of the subsidiaries in the prescribed formatAOC-1 forms part of the Consolidated Annual Accounts 2015-16.
Vigil Mechanism and Whistle Blower Policy
The Corporation has a Whistle Blower Policy which is posted on the website http://www.theashokgroup.com/Aboutus/rti . Being a Central Public Sector Enterprise theCorporation has a Vigilance Department. Chief Vigilance Officer the Head of the VigilanceDivision is under the direct control of the Central Vigilance Commission (CVC) anindependent Govt. Agency.
Board of Directors
During the year six Board meetings held to transact the business of the Company.
During the year under review following directors were appointed :
i) Shri Umang Narula appointed as Chairman & the Managing Director w.e.f.24.04.2015
ii) Shri Piyush Tiwari Director (C&M) w.e.f. 28.05.2015
iii) Shri Pradip Kumar Das Director (Finance) w.e.f. 25.02.2016
iv) Shri Sanjeev Ranjan w.e.f. 01.10.2015
v) Shri Suman Billa w.e.f. 01.10.2015
During the year under review following directors ceased to be on the Board :
i) Shri Girish Shankar Director w.e.f 01.10.2015
ii) Shri Trinath Behera Director(Finance) w.e.f 01.07.2015
iii) Dr. (Ms.) T. Kumar Director w.e.f 01.10.2015
The Board appreciated the valuable services rendered by them during their tenure.
The present composition of the Board is as under:
i) Shri Umang Narula Chairman & the Managing Director w.e.f. 24.04.2015
ii) Shri Piyush Tiwari Director (C&M) w.e.f. 28.05.2015
iii) Shri Pradip Kumar Das Director (Finance) w.e.f. 25.02.2016
iv) Shri Sanjeev Ranjan w.e.f 01.10.2015
v) Ms. Meenakshi Sharma w.e.f 11.07.2016
vi) Shri Anugolu Venkata Ratnam w.e.f 07.10.2013 vii) Dr. Usha Kiran Rai w.e.f10.12.2013 viii) Shri Ajay Swarup w.e.f. 08.08.2016
ix) Shri Patel Karsanbhai Bhikhabhai w.e.f. 08.08.2016
Pursuant to Article 61 of the Article of Association Shri Piyush Tiwari and ShriSanjeev Ranjan retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for reappointment. Details of profile etc. as required underRegulation 36(3) of SEBI (LODR) Regulations 2015 in respect of Director liable to retireby rotation and seeking re-appointment and Directors for whose appointment approval ofshareholders is being sought in the ensuing AGM have been given at the end of the Noticeof AGM.
Training Policy and the training imparted to the Directors
The Corporation has formulated a training policy for Board Members. As per the policyITDC offers training programmes organized by SCOPE and DPE to the Board Members. Furtheron induction of non-official Directors ITDC may also arrange training on the role andresponsibilities of Directors from the professional institutes like ICAI ICSI ICMA IIMetc.
During the financial year 2015-16 Non-official Directors did not participate in anytraining programme through ITDC.
Declaration by Independent Directors
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement/Listing Regulations.
The evaluation of the Board as a whole and the Independent Directors is conducted onthe basis of criteria and framework laid down by the Nomination & RemunerationCommittee of the Board. Based on the evaluation criteria laid down by the Committee theperformance evaluation of the Board is measured in six areas. The performance evaluationof the Independent Directors is measured also in six areas based on questionnaire designedon a scale of 1 to 5. Independent Directors evaluate performance of thenon-independent directors in a separate meeting of the Independent Directors.
None of the independent directors are due for re-appointment in the ensuing AnnualGeneral Meeting.
Particulars of loans guarantee or investments
During the year under review ITDC released loan of total Rs 35250000/- at a rate ofinterest of 12.5% per annum to M/s Utkal Ashok Hotel Corporation Ltd. a joint venturesubsidiary of ITDC for meeting out VRS liability of employees payment of outstandingsalaries of staff statutory obligations and day-to-day expenditures.
As per the requirement of Clause C of Schedule V to SEBI (LODR) Regulations 2015 adetailed report on Corporate Governance together with the following is given in Annexure-IIwhich forms part of this Report.
(i) CEO/CFO Certificate [as per Regulation 17(8) of SEBI (LODR) Regulations 2015 ];and
(ii) Certificate from as Corporate Governance [Clause E to Schedule V to SEBI (LODR)Regulations 2015] along with the management reply to observations.
Directors Responsibility Statement
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 it ishereby confirmed:-
that in the preparation of the accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed read along with properexplanation relating to departures;
that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of state of affairs of the Company at the end of the financialyear and of the profit of the Company for the year under review;
that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
that the Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a going concern basis;
Auditors that the Directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively;
that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Internal Financial Controls
The Corporation has an adequate internal control system commensurate to its nature ofbusiness. Board has laid down adequate policies and procedures such as LicensingProcedure Purchase Procedures Engineering & Works Manual Delegation of Powers etc.for ensuring the orderly and efficient conduct of business.
Professional services of Chartered Accountant Firms are availed to conduct InternalAudit of all units/verticals of ITDC. A detailed Internal Audit manual duly approved bythe Board of Directors has been circulated to all the units.
Internal Auditors monitor and evaluate the efficacy and adequacy of the internal checks& control systems. Quarterly Internal Audit Reports are submitted by InternalAuditors. Corrective actions wherever required are taken by the units/verticals.Significant observations if any are reported to the Audit Committee.
Related Party Transactions
There are no materially significant party transactions reportable under Section 188 ofthe Companies Act 2013. The Audit Committee and the Board has approved a policy onmateriality of the related party transactions which is posted on the website of thecompany http://www.theashokgroup.com/Aboutus/Investorcorner.
Report under Section 22 of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
During 2015-16 one case was filed against an employee in The Ashok beforethe Internal Complaint Committee. The Internal Complaint Committee investigated the caseand has submitted its report in the matter to the Delhi Women Commission. The case hasbeen closed.
Corporate Social Responsibility and Sustainable Development
The CSR activities undertaken during the financial year 2015-16 were "SwachhBharat" and the construction of Toilet Blocks in the backward area in Churu(Rajasthan).
The Annual Report on CSR Activities and the Report on the Sustainable DevelopmentActivities are annexed as Annexure III.
Risk Management Policy and its Implementation
ITDC Board in its meeting held on 11th May 2010 has laid down the Risk ManagementPolicy laying down a sound process for identification and mitigation of risks. Inaccordance with the policy the unit head of all strategic divisions have been nominatedas Risk Manager and a committee namely Risk Management Compliance Committee (RMCC)presently headed by Director (C&M) has been constituted to oversee and ensurecompliances with the risk management policy of the Corporation.
Companys specific risks as per the reports submitted by different units/divisionsof ITDC during 2015-16 are as under :
|Economic Risk ||More Dependence on one segment of clients i.e. Government |
|Industrial Risk ||Threat to market share due to new players with wider facilities. |
|Personnel Risk ||Non-availability of adequate skill sets and depleting manpower in Key positions. |
|Legal Risk ||Contractual risk & tax risk |
|Operational Risk ||Ageing properties of Hotels |
Auditors and Auditors Report
The Comptroller & Auditor General of India have appointed M/s Kishore &Kishore Chartered Accountants as Statutory Auditors of the Company and also variousBranch Auditors for the year 2015-16 under Section 619(2) of the Companies Act1956/143(5) of the Companies Act 2013. The Managements replies to the comments andobservations of the Statutory Auditors on the accounts ( Standalone and the Consolidated)for the year 2015-16 are given in
Annexures- IV & V.
Secretarial Auditor and Secretarial Audit Report
ITDC Board in its meeting held on 27th January 2016 has appointed M/s ChandradipBharti & Associates Company Secretaries as the Secretarial Auditors for conductingthe Secretarial Audit as required under section 204 of the Companies Act 2013. TheSecretarial Audit Report is placed at Annexure-VI and Management replies to thecomments and observation of the Secretarial Auditors on the Secretarial Audit Report forthe year 2015-16 are given at Annexure-VII.
Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure - VIII to theBoards Report.
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys operation in future.
Comments of the Comptroller and Auditor General of India
The comments of the Comptroller &
Auditor General of India under Section 143(6) of the Companies Act 2013 on theAccounts of the Company for the financial year ended 31st March 2016 are set outelsewhere in the Annual Report.
Material changes and commitments affecting the financial position of the Companybetween the end of the Financial year and the date of the Report
There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of the report.
i. The Board places on records its sincere appreciation towards the Companyscustomers/clients for the support and confidence reposed by them in the organization andlook forward to the continuance of this relationship in future.
ii. The Board also gratefully acknowledges the support and guidance received fromvarious Ministries of the Government of India particularly the Ministry of Tourism inCompanys operations and developmental plans. The Board also wishes to record itsdeep gratitude to all the members of ITDC family whose enthusiasm dedication andco-operation put the Company on the path of progress.
| ||For and on behalf of Board of Directors |
| ||sd/- |
|Date: 12.08.2016 ||(Umang Narula) |
|Place: New Delhi ||Chairman & Managing Director |