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India Tourism Development Corporation Ltd.

BSE: 532189 Sector: Services
NSE: ITDC ISIN Code: INE353K01014
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NSE 00:00 | 20 Sep 264.40 17.35






OPEN 254.95
VOLUME 46659
52-Week high 412.00
52-Week low 152.15
P/E 91.99
Mkt Cap.(Rs cr) 2,280
Buy Price 260.00
Buy Qty 75.00
Sell Price 265.85
Sell Qty 48.00
OPEN 254.95
CLOSE 247.80
VOLUME 46659
52-Week high 412.00
52-Week low 152.15
P/E 91.99
Mkt Cap.(Rs cr) 2,280
Buy Price 260.00
Buy Qty 75.00
Sell Price 265.85
Sell Qty 48.00

India Tourism Development Corporation Ltd. (ITDC) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 53rd Annual Report together with theaudited accounts of the Corporation for the year ended 31st March 2018.

Your Corporation has achieved a total turnover of ` 370.64 crore during the financialyear 2017-18 as against ` 356.11 crore in the previous year 2016-17 (As per Ind AS).During the financial year 2017-18 the Corporation has recorded a Net Profit (after tax)of` 23.62 crore as against Net Profit (after tax) of` 11.43 crore in previous year 2016-17(As per Ind AS).

Performance Highlights

The highlights of the financial results of the Corporation (Standalone) are givenbelow:

(Rs. in crore)
Particulars Audited Audited
2017-18 2016-17
Income from Operations 343.87 330.77
Operating Expenses 348.97 314.29
Operating Profit/Loss -5.10 16.48
Other Income 26.78 25.34
Profit / Loss before Depreciation Finance Cost Exceptional Items and Prior Period Adjustments 21.68 41.82
Depreciation 7.15 6.18
Finance Cost 0.48 0.57
Profit / Loss before Exceptional Items and Prior Period Adjustments 14.05 35.07
Exceptional Items 30.89 -10.86
Profit / Loss before Prior Period Adjustments 44.94 24.21
Provision for Income Tax 15.98 12.72
Deferred Tax -7.28 -4.63
Provision for Income Tax for earlier years written back 0.05 -0.02
Profit/Loss from Continuing Operations after tax 36.19 16.14
Net Profit/ (Loss) from Discontinuing Operation -17.78 -7.20
Tax expense of Discontinued Operation -5.21 -2.49
Net Profit/ (Loss) from Discontinued Operation after tax -12.57 -4.71
Net Profit/ (Loss) for the period 23.62 11.43
Other Comprehensive Income -
(i) Items that will not be reclassified to Profit or Loss -6.28 -1.24
(ii) Income tax relating to items that will not be Reclassified to Profit or Loss 1.79 0.43
Other Comprehensive Income for the Period -4.49 -0.81
Total Comprehensive Income for the Period 19.13 10.62

During the financial year 2017-18 the Corporation has made a provision of ` 22.47crore (excluding impact of Gratuity and Leave Encashment) towards approval ofrecommendation of 3rd Pay Revision Committee (PRC).

Note : The Ministry of Corporate Affairs vide its notification dated 16.02.2015 hasnotified the Companies (Indian Accounting Standards)

Rules 2015 which mandates application of Ind

AS (known as Indian Accounting Standards) by the Companies whose equity or debtsecurities are listed on any stock exchange in India or outside India and having net worthof less than rupees five hundred crore. In compliance of the said notification thefinancial statements for the year ended 31st March 2018 have been prepared in accordancewith Ind AS and figures of Financial Year 2016-17 have been re-cast to make them Ind-AScompliant.

Operating Ratio

The Operating Ratio has increased to 101.48% against 95.02% in the previous financialyear.

Division wise Financial Performance

The Division wise financial performance of the Corporation is summarized as under :

(i) Hotels Division has achieved a turnover of ` 269.33 crore during the year asagainst ` 280.98 crore in the previous year and earned the net profit of ` 1.45 crore asagainst the net profit of` 33.66 crore in the previous year.

ii) The turnover of AIT Division was ` 15.03 crore against ` 18.36 crore in theprevious year. During the year 2017-18 there are 12 duty free shops in operation atseaports i.e. at Goa Haldia Kolkata

Chennai Mangalore Vishakhapatnam

Mumbai Paradip Kakinada Cochin

Krishnapatnam and Tuticorin. The AIT division has earned Net Profit of ` 0.56 crore ascompared to Net Profit of` 3.32 crore in the previous year.

iii) The turnover of ATT Division has increased to ` 24.97 crore (Ind AS) from ` 16.31crore (Ind AS) in the previous year an increase by 53.1 %. The ATT Division has earned aprofit of ` 2.22 crore as against the Net Loss of ` 18.18 crore in the previous year. Theprevious year loss was due to the deposit of demand of ` 14.99 crore in the ‘L' Blockproperty case where the appeal of ITDC before the High Court had been dismissed and thedemand has been paid in full.

iv) The turnover of the Ashok Events Division has been increased to ` 37.12 crore(previous year ` 36.38 crore) and has earned a Profit of` 4.91 crore as against Net Profitof` 6.07 crore in the previous year.

v) The Engineering Division including SEL Projects has achieved a turnover of ` 10.12crore during the year 2017-18 (previous year ` 11.04 crore) with Net Loss of ` 3.92 croreas against Net Loss of ` 3.21 crore in the previous financial year.

vi) The Ashok Institute of Hospitality and Tourism Management (AIH&TM) has achieveda turnover of ` 3.61 crore as against a turnover of ` 2.99 crore in the previous year withNet loss of ` 0.81 crore (previous year Net Loss of ` 0.81 crore).

vii) The Corporate HQ being the administrative office has earned an income of ` 26.68crore (previous year ` 20.81 crore) mainly constituting income from interest on short termdeposits with banks from the surplus funds available with it. During the year 2017-18apart from interest income HQ has also earned profit from disinvestment of hotelunits/subsidiary companies of ` 24.13 crore.

Note : Division-wise Turnover and Profit of Turnover and Profit as DiscontinuedOperations.

Capital Structure

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 2018.


The Board of Directors recommended a dividend of 18.5% for the financial year 2017-18on the equity share capital of the Company.

Transfer to Reserve

No amount has been transferred to the General Reserves.

Rating of ITDC vis--vis MoU targets

Performance of the Company for the year 2016-17 has been notified as ‘Good' withComposite Score 56.35 by Department of Public Enterprises (DPE) in terms of the MoU signedwith the Government of India.


The report on the Management Discussion and Analysis is placed at Annexure-I.

Procurement from MSME

The Corporation has partly complied with guidelines issued by DPE in this regard inview of nature of operations and products/services consumed by the Corporation.

Implementation of Official Language Policy

During the year 2017-18 the Company comprises continued its efforts to giveof bothContinuing as well impetus to the use of Hindi in official work through motivation andtraining. Cash incentives were granted to employees on doing prescribed quantum of work inHindi. Hindi workshops were organized to provide practical training of noting-drafting andother works in Hindi. Various Hindi competitions were also organized during Hindi Parv(Fortnight) celebrations for giving impetus to the use of official language in day to daywork. A cultural programme and Hindi Kavigoshthi were organized at Hotel The Ashok on 18thOctober 2017 to celebrate "Hindi Parv" which included performances by prominentHindi poets as well as various performances like songs drama etc. by ITDC's own employeesbesides Rajbhasha Prize Distribution Function to encourage Official language in theCorporation.

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 endeavors made in this direction.

Since your Company's operations do not involve technology absorption the particularsas per Rule 8(3)(b) of the Companies (Accounts)

Rules 2014 regarding technology absorption are not applicable.

Foreign Exchange Earnings & Outgo

The Direct Foreign Exchange Earnings during the year 2017-18 has increased to ` 15.27crore as against ` 15.20 crore in the previous financial year.

Subsidiary Companies

As on 31.03.2018 the Corporation has five subsidiary companies viz. (i) Donyi Polo

Ashok Hotel Corporation Ltd (ii) Pondicherry Ashok Hotel Corporation Ltd (iii) RanchiAshok Bihar Hotel Corporation Ltd. (iv) Utkal Ashok

Hotel Corporation Ltd. (v) Punjab Ashok Hotel

Company Ltd. The Hotel Units were set up under the aforesaid subsidiary companies atItanagar Puducherry and Ranchi respectively. The operation of Hotel unit at Puri isclosed since

March 2004 and the Hotel has been planned to be leased out. The Hotel project atAnandpur

Sahib is incomplete. Due to continuous losses the operations of Hotel Ranchi Ashokhave also been closed w.e.f. 29.03.2018. Further ITDC signed Share Transfer Agreement on17.05.2018 for transferring its 51% equity stake in Donyi

Polo Ashok Hotel Corporation Ltd. to the Govt. of Arunachal Pradesh. Thus presentlyITDC has following four subsidiary companies :

(i) Pondicherry Ashok Hotel Corporation Ltd

(ii) Ranchi Ashok Bihar Hotel Corporation Ltd. (Operation is closed).

(iii) Utkal Ashok Hotel Corporation Ltd (Operation is closed)

(iv) Punjab Ashok Hotel Company Ltd. (Incomplete Project)

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 formatforms part of the Consolidated Annual Accounts 2017-18.

Vigil Mechanism and Whistle Blower Policy

The Corporation has a Whistle Blower

Policy which is posted on the website http:// Beinga

Central Public Sector Enterprise the Corporation has a Vigilance Department. ChiefVigilance

Officer the Head of the Vigilance Division is under the direct control of the CentralVigilance Commission (CVC) an independent Govt. Agency.

Board of Directors

During the year nine Board meetings were held to transact the business of the Company.

The Board presently comprises of ten Directors i.e. Chairperson & ManagingDirector Director (C&M) Director (Finance) two Government Nominee Directors andfive Independent Directors as under:

A) Executive Directors

1. Smt. Ravneet Kaur (IAS) has been appointed as Chairperson &

Managing Director w.e.f. 24.07.2017

2. Shri Piyush Tiwari Director (C&M) w.e.f. 28.05.2015

3. Shri Pradip Kumar Das Director (Finance) w.e.f. 25.02.2016

B) Non-Executive Directors

(a) Part-time Government Nominee Directors:

1. Shri Shambhu Singh IAS from 10.08.2018

2. Smt Meenakshi Sharma (IA&AS) from 11.07.2016

(b) Independent Part time Directors:

1. Shri Ajay Swarup from 08.08.2016

2. Shri Patel Karshanbhai Bhikhabhai from 08.08.2016

3. Dr. Paragbhai M. Sheth from 30.07.2018

4. Shri K. Padmakumar from 30.07.2018

5. Dr. Kamla Singh from 30.07.2018

As per disclosure received from the Directors the Directors are not related to oneanother.

Pursuant to Article 61 of the Article of

Association Shri Piyush Tiwari and Shri Pradip

Kumar Das retire by rotation at the ensuing

Annual General Meeting and being eligible offer themselves for re-appointment.Further approval of the shareholders is being sought to the appointment of Dr. ParagbhaiM.Sheth

Shri K. Padmakumar and Dr. Kamla Singh as

Independent Directors in the Company as required under Section IV of Schedule IV to theCompanies Act 2013 read with Section 149(7) of the Companies Act 2013. Details ofprofile etc. as required under Regulation 36(3) of SEBI (LODR) Regulations 2015 inrespect of Directors the approval of the appointment of whom are being sought in this AGMand the profile of

Directors liable to retire by rotation and seeking re-appointment have been given atthe end of the Notice of 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 ICMAIIIM SCOPE etc.

During the financial year 2017-18 Non-official Directors did not participate in anytraining programme organized by DPE.

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 Regulation 16(1)(b) of SEBI(LODR) Regulations 2015.

Board Evaluation

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 evaluation of the Independent

Directors is measured also in six areas based on questionnaire designed on a scale of 1to 5.

Particulars of loans guarantee or investments

During the year under review ITDC released loan of total ` 900000/- on 27.04.2017 ata rate of interest of 12.5% per annum to M/s

Utkal Ashok Hotel Corporation Ltd. a subsidiary of ITDC for meeting out paymenttowards ESI Security Services Advocates Fees and others and a loan of ` 9639000/- at arate of interest of 12.5% per annum to M/s Ranchi Ashok Bihar

Hotel Corporation Ltd. towards working capital and payment of unpaid salaries of staff.

Corporate Governance

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 [Clause E to Schedule V to SEBI (LODR) Regulations 2015] along withthe 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 March2018 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 2018 on a ‘going concern' basis;

• that the Directors had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operating theCompany's Auditors 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 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

Internal Audit of all units/verticals of ITDC. A detailed Internal Audit manual dulyapproved by the 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 are reported to the Audit Committee.

Related Party Transactions

There are no materially significant related party transactions reportable under Section188 of the Companies Act 2013. The Audit Committee and the Board have approved a policyon materiality of the related party transactions which is posted on the website of thecompany Aboutus/Investorcorner.

Disclosure as per OM of Ministry of Parliamentary Affairs

In compliance with the OM F.No.

28(1)/2016-Leg.I dated 24.01.2018 of Ministry of Parliamentary Affairs Government ofIndia on the recommendations made by the Committee on Papers Laid on the Table (RajyaSabha) details related to vigilance cases Audit Objections and RTI matters etc. arerequired to be included in the Annual Report of the Company. The relevant details are asunder :

Vigilance Cases

Number of Vigilance cases disposed off during the financial year 2017-18 are eightwhereas the pending Vigilance/Disciplinary cases are six. The gist of the nature of suchcases are that delinquent official failed to ensure the running of private licensees asper the agreement at Hotel irregularities pertaining to installation of Wi-fi system atITDC Hotels irregularities in approving technical sanction while tendering for laying outof the Carpet at Ashok Hotel irregularities in the payment of retention money to theparty etc.

Audit Objectionsobservations if any

There are total outstanding 126 para pending for resolution with CAG.

RTI Matters

The Corporation is a Public Authority under Clause (h) of Section 2 of Right toInformation Act 2005. The Corporation has taken necessary steps for the implementation ofthe Right to Information Act 2005. The Corporation is in compliance with the RTI Act2005.

Report under Section 22 of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

During 2017-18 no case was registered.

Corporate Social Responsibility and Sustainable Development

The CSR activities undertaken during the financial year 2017-18 are as follows:

(i) Red Fort Old Fort and Qutub Minar were adopted under CSR activities to maintaincleanliness and to educate visitors about importance of cleanliness.

(ii) Contribution to Prime Minister's National Relief Fund.

The Annual Report on CSR Activities and the Report on the Sustainable Development

Activities 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.

Company's specific risks (Level of Risks : High/Likely) as was placed in the BoardMeeting held on 08.09.2017:

Economic Risk:

i) More Dependence on one segment of clients i.e. Government

ii) Change in Government strategy to invite participation from private entities byfollowing tendering route

iii) Loss of Chain/Group advantage

Personnel Risk: Non-availability of adequate skill sets and depleting manpower inKey positions.

Legal Risk: i) Repeated assessment by the Statutory Authorities

ii) Result of contractual obligations

iii) Overdependence on contractual manpower due to depleting strength of permanentmanpower

iv) Unavoidable litigation in estate related issues

v) Huge number of cases pending in courts as well as in arbitration

Management & Operational Risk:

i) Very Low IT environment in Corporation

ii) Low Vendor Base

Auditors and Auditor's Report

The Comptroller & Auditor General of

India has appointed M/s Kishore & Kishore

Chartered Accountants as Statutory Auditors of the Company and also various Branch

Auditors for the year 2017-18 under 134(5) of the Companies Act 2013. The Management'sreplies to the comments and observations of the Statutory Auditors on the accounts(Standalone) for the year 2017-18 are given in Annexure IV.

Secretarial Auditor and Secretarial Audit Report

ITDC Board in its meeting held on 27th March 2018 has appointed M/s K J &Associates Company Secretaries as the Secretarial Auditors for conducting the SecretarialAudit as required under Section 204 of the Companies Act 2013. The Secretarial AuditReport is placed at Annexure-V and Management replies to the comments andobservation of the Secretarial Auditors on the Secretarial Audit Report for the year2017-18 are given at Annexure-VI.

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 -VII to the Board'sReport.

Significant and Material Orders

There are no significant orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's 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 (Standalone and Consolidated) of the Company for the financial year ended 31stMarch 2018 are set out elsewhere in the Annual Report.

Material changes and commitments affecting the financial position of the Companybetween and material the end of the Financial year and the date of the Report

Status of Disinvestment of properties of

ITDC and its Subsidiaries:

No. of hotels disinvested during 2017-18

S.No. Date of Disinvestment Name of Property Amount of Revenue
received by ITDC
1 Share Transfer Agreement signed on 29.06.2017 51% Equity stake in MP Ashok Hotel Corporation Ltd. (Hotel Lake View Ashok) ` 12.59 crore
2 Share Transfer Agreement signed on 29.06.2017 51% Equity stake in Assam Ashok Hotel Corporation Ltd. (Hotel Brahmaputra Ashok) ` 2.14 crore
3 MoU signed on 27.04.2017 Hotel Bharatpur Ashok Nil
4 Technical Possession of Land and Building of Hotel Janpath was handed over to Ministry of Urban Development by signing of handing over document on 31.10.2017 Hotel Janpath New Delhi Compensation for loss of business opportunity yet to be finalized
5 Property comprising leasehold land and incomplete hotel building on "as is where is basis" was handed over to Govt. of J & K on 16.11.2017 Incomplete Project of Hotel Gulmarg Ashok Nil
6 Transfer Agreement was signed on 09.12.2017 Hotel Jaipur Ashok ` 14 crore. All liability of Hotel Jaipur Ashok to be borne by ITDC upto the date of transfer of hotel.
7 Share Transfer Agreement was signed on 17.05.2018 51% equity in Hotel Donyi Polo Ashok Itanagar ` 1.98 crore
8 Transfer Agreement was signed on 25.05.2018 Hotel Lalitha Mahal Palace Mysore ` 7.45 crore. All liabilities of hotel Lalitha Mahal Palace upto the date of transfer to be borne by ITDC.

Status of disinvestment of other hotels are as under :

S.No. Name of Property Current Status
1 Hotel Pondicherry Ashok Puducherry • The Subsidiary Company is in the process of appointing Transaction Advisor for Joint Leasing/PPP/ DBFOT etc. of Hotel Pondicherry Ashok.
2 Incomplete Project of Anandpur Sahib • RFP for selection of bidders for Joint Leasing/PPP/ DBFOT etc. of project at Anandpur Sahib has been floated in October 2017 and after some revision in February 2018 but no response received.
• The Subsidiary Company is in the process of floating revised RFP as approved by IMG.
3 Hotel Kalinga Ashok Bhubaneswar (O&M Contract) • RFP for selection of bidder for O & M operations of Hotel Kalinga Ashok was floated in December 2017 but no response received.
• Revised RFP has been floated on 20.07.2018 for selection of bidder for O & M operation of Hotel Kalinga Ashok.
4 Hotel Patliputra Ashok Patna • IMG approved the negotiated consideration of ` 13.005 crore for transfer of Hotel Patliputra Ashok Patna to the Govt. of Bihar with the condition that the Government of Bihar would consider the transfer of BSTDC's equity in Ranchi Ashok Bihar Hotel Corporation Ltd. to the Govt. of Jharkhand.
5 Hotel Ranchi Ashok Ranchi • M/s Delhi Integrated Multi-modal Transit System (DIMTS) has been appointed as TA for valuation of equity stake of ITDC in the Subsidiary Company.
• Due to continuous losses in operating the property operations of the Hotel have been closed w.e.f. 29.03.2018. Employees of the Hotel have been offered VRS twice.
6 Hotel Nilachal Ashok Puri M/s Paulmech the respondent filed an SLP in the Hon'ble Supreme Court challenging an earlier order of the Hon'ble High Court of Odisha.
• There is a stay on cancellation of Letter-of-intent (LOI) issued to M/s Paulmech and no fresh agreement with regard to property in question i.e. Hotel Nilachal Ashok Puri shall be entered into as per court orders.


i. The Board places on record its sincere appreciation towards all the stakeholders ofthe Company including customers/ clients suppliers/vendors/service providers for thesupport and confidence reposed by them in the organization and look forward to thecontinuance of this relationship in future. ii. The Board also gratefully acknowledges thesupport and guidance received from various Ministries of the Government of Indiaparticularly the Ministry ofTourism in Company's operations and developmental plans. TheBoard also wishes to record its deep gratitude to all the members of ITDC family whoseenthusiasm dedication and co-operation put the Company on the path of progress.

For and on behalf of Board of Directors

(Ravneet Kaur)
Date: 11.08.2018 Chairperson &
Place: New Delhi Managing Director