India Tourism Development Corporation Ltd

The Directors have pleasure in presenting the 42nd Annual Report
 together with the audited accounts of the Company for the year ended
 31st March, 2007.
 
 Your Company posted yet another year of impressive results. It
 registered an all time record turnover of Rs 561.75 crore, an increase
 of 50.35% over the previous fiscal year. The profit (before tax) of
 your Company grew by 33.35% thereby exhibiting consistent growth for
 the fourth year in succession to reach to the level of Rs 68.77 crore.
 
 Performance Highlights
 
 The comparative position of the corporate profitability at a glance is
 tabulated below: -
 
                                                        (Rs. in crore)
 
 Particulars                                  2006-07     2005-06
 
 Turnover                                      561.75     373.63
 Operating Profit                               74.33      54.53
 Less: Interest                                  0.01       0.08
 Less: Depreciation                              4.27       3.49
 Add / (Less): Prior period
 Adjustments and
 Extra-ordinary Items                        (-) 1.28       0.61
 Profit / (Loss) before Tax                     68.77      51.57
 Add / (Less): Deferred Tax                      2.89   (-) 6.04
 Less: Provision for
 Income Tax                                     26.50      12.60
 Less: Provision for
 Wealth Tax
 Less: Provision for Fringe
 Benefit Tax                                     0.42       0.32
 Add: Provision for Income
 Tax for earlier year
 written back                                    0.82          -
 Add: Deferred Tax Asset
 Recognised                                         -      13.18
 Profit / (Loss) after Tax                       45.56     45.79
 Proposed Dividend                               13.50         -
 Dividend Tax                                        -      2.30
 Equity Capital                                  67.52     67.52
 Capital Employed                               188.13    158.71
 
 Capital Structure
 
 As on 31st March, 2007, the paid-up Share Capital of the Company
 remained unchanged as in the last year i.e. Rs. 67.52 crore.
 
 Dividend
 
 Keeping in view the guidelines of the Ministry of Finance, Government
 of India for declaration of dividend by profit making PSUs and
 considering profit after tax of Rs 45.56 crore, your Board of Directors
 is pleased to propose dividend of 20% paid-up equity capital for the
 year 2006-07. The total liability for Dividend (Rs 13.50 crore) and
 Dividend Tax (Rs 2.30 crore) will be Rs 15.80 crore.
 
 Rating of 1TDC vis-a-vis MoU Targets
 
 Performance of the Company for the year 2005-06 has been rated as Very
 Good in terms of the MoU signed with the Government of India. The Self
 Performance Evaluation Report for 2006-07 on the basis of audited data
 has been sent to DPE.  Performance rating is awaited.
 
 Management Discussion and Analysis
 
 A report on the Management Discussion and Analysis is placed at
 Annexure-l.
 
 Hotels Division
 
 During 2006-07, The Ashok Group of Hotels in New Delhi undertook the
 major drive to upgrade guest rooms, public areas and other facilities
 to bring about a visible change in the perception of the hotels image
 in the eyes of the clients. It has been.  successfully achieved in the
 Delhi properties and is being carried out in other units too. Some of
 the initiatives taken in the Delhi hotels are aggressive direct
 marketing campaign focused on domestic and international tourists,
 corporate travellers and conferences, banquets business, training,
 organizing/participating in Food & Cultural Festivals, etc.
 
 The Ashok, the flagship hotel of ITDC, aggressively marketed into the
 newer segments to improve the market share. Similarly, Hotel Samrat and
 Hotel Janpath improved their room product to have image makeover. Some
 of the initiatives taken in the Delhi hotels are:-
 
 - Wi-fi Broadband Internet connectivity all over the hotel campus.
 
 - Facility of Lap-top, Mobile, SIM card on rent.
 
 - Plasma TVs & LCD TVs have been introduced in the rooms along with
 Desktop computers in certain suites.
 
 - Wooden flooring in guest rooms have been introduced.
 
 - Electronic locks have been procured for all the guest rooms.
 
 - Electronic Safes are placed in the rooms.
 
 - New guest supplies - toiletries, bath wares, weighing scales, etc.
 
 - Distinct pathological/lab tests are being offered to guests as an
 initiative towards medical tourism in terms of hotel specifics.
 
 - The existing Executive floor at The Ashok is being upgraded.
 
 - An additional business floor has been introduced as Club Four at The
 Ashok.
 
 - Hotel Samrat has renovated reasonable number of guest rooms.
 
 - Hotel Janpath, too, started with the process of product improvement
 and created certain superior rooms with additional facilities/
 amenities.
 
 - Retaining its popularity and market share, the relaunched food and
 beverage outlets in The Ashok - Frontier, Soho-Ssteel, Orange Room
 Capitol and Boyarin which are the talk of the town.
 
 The Ashok Group of Hotels continued to play host to several prestigious
 international and national level conventions/events, including:
 
 - World Economist Congress, Quality Council of India, Petrotech-2007,
 International Conference on Peace and Non-Violence, 58th International
 Annual Conference of Cardiology, International Conventions by- Ministry
 of Science & Technology, International Coal Congress, 51st Annual
 Conference of Indian Orthopaedics Association, MOP-18, UNICEF
 Conference.
 
 - The Ashok Group also hosted the delegations from Russia, Sri Lanka,
 Mauritius, China, South Korea, Belarus, Italy, Hungary, America, etc.
 
 - The Ashok Group also globally popularized the Indian cuisine by
 participating in the food festivals abroad.
 
 The hotels continue to accord high priority to energy conservation and
 environmental issues.  During the year, the three hotels in Delhi have
 endeavoured to pursue this with efficient engineering installation -
 both high end as well as low and. The hotels have significantly saved
 on the energy consumption by switching over to energy efficient
 lighting and locking systems. Increased employee awareness on energy
 conservation is also a focus area.
 
 The turnover of Hotels Division increased to Rs 197.17 crore in 2006-07
 from Rs 150.48 crore in 2005-06.
 
 Ashok International Trade Division (AITD) Duty Free business scenario
 has been completely changed in the recent past. The airports at Dell ,
 Mumbai, Bangalore and Hyderabad were privatined and the Foreign Direct
 Investment (FDI) in the business was liberalized. 
 
 The private airpct operators demanded international experience for
 participation in the tender. The requirement of a partner of
 international experience and repute with strong financial background
 assumed greater significance vis-a-vis the Mumbai DFS tender, as the
 net worth of ITDC was a fraction of the required net worth of two
 hundred million US dollars specified in the tender.
 
 ITDC alone was, therefore, not qualified to participate in the tender.
 These have caused severe setbacks for the business of the division.
 
 To upgrade the duty free shops to the level of international standard,
 ITDC has executed an MoU for partnership arrangements with the
 international duty free operators, which will help achieve
 international standards in merchandising and display, reducing the cost
 of serving customers, improving the supply chain and business
 productivity, improving staff and employees productivity, etc.
 
 The Ashok International Trade Division (AITD) continued its efforts to
 build customer loyalty by making India Duty Free, a customer centric,
 empowered point of service for shoppers paradise, Duty Free Shopping
 in India an experience by itself.
 
 Like in the past, traditional festivals of India viz. Deepawali,
 Christmas and New Year were celebrated at duty free shops by lighting
 up to give India duty free a unique identity, thereby imbibing Indias
 rich cultural heritage.
 
 To further augment the sale, a massive brand expansion and positioning
 was initiated to include high-end world-class merchandise in all
 product categories and series of attractive promotional efforts
 undertaken in collaboration with suppliers.
 
 In order to expand the services, the Division decided to explore new
 opportunities of sales in the area of in-flight, seaport and other
 areas.
 
 The turnover of AITD was Rs 127.43 crore during the year 2006-07 as
 against Rs 137.70 crore in 2005-06.
 
 Ashok Reservation and Marketing Service Division (ARMS)
 
 The Ashok Reservation and Marketing Service Division (ARMS) has
 established itself as a successful Event Management Division of the
 Company. During the year under review, this Division handled 56
 conferences, including prestigious international events like 18th
 Meeting of Parties to the Montreal Protocol, World Meteorological
 Conference, International Seminar on Defence Finance & Economics, 2nd
 Regional Economic Cooperation Conference on Afghanistan, Asia Pacific
 Ministerial Conference, International Conference on Bio Safety,
 Petrotech 2007, Interna- tional Conference to commemorate Satyagraha,
 etc.
 
 The Division also coordinated participation of India as Partner Country
 at ITB 2007.
 
 The exhibition stalls for NHAI and Department of Posts were designed
 and fabricated by the Division at India International Trade Fair at New
 Delhi and various other exhibitions across the country for NHAI. The
 Division has plans to concentrate on Exhibitions in a major way.
 
 The Division continued marketing of HARK solution of NUT and will be
 installing the system in an AP Museum shortly.
 
 Various incentive packages were floated to get incremental business in
 lean period like Family Fun Package, Senior Citizens Package and
 Student Package. The Division offered special rates to (ravel agencies
 for increasing the share of GIT segment.
 
 ARMS has increased its turnover in 2006-07 to Rs 16.84 crore against
 the previous years turnover of Rs 3.37 crore.
 
 Ashok Travels & Tours (ATT)
 
 Ashok Travels & Tours (ATT), an in house IATA approved Travel Agency of
 the India Tourism Development Corporation, provides all Travel related
 services primarily for the Government Sector as, well as general
 public. Services include Airline Ticketing/ Hotel Booking/Tour
 packages/Car & Coach Rentals/ Money Changing/ Money Transfer
 Services/Overseas Insurance and organizing Exhibitions.
 
 During the year, ATT successfully handled ticketing of several
 Ministries and Government Departments using all the International
 Airlines and Domestic Airline;. The Division also bagged the work for
 organizing 3 Handicraft Exhibitions and was selected as Lead Travel
 Agent for Asian Development Bank, 39th AGM recently concluded in
 Hyderabad.
 
 The unprecedented growth in Tourism sector had its deep impact on Ashok
 Travels & Tours. ATT continued to strengthen its core business
 activities and added new services like Overseas Medical Insurance, VISA
 assistance and Exhibitions. ATT handled 10 exhibitions across the
 country.
 
 ATT has increased its turnover in 2006-07 to Rs 60.22 crore against
 previous years turnover of Rs 53.23 crore.
 
 Ashok Consultancy & Engineering Services With a view to improve image
 of ITDC Hotels and to conquer the competitive market the Engineering
 Division has taken up renovation and refurbishment of Delhi based
 hotels to meet the requirement of the Commonwealth Games 2010.
 
 The Division has been assigned additional works for execution in Delhi,
 Mizoram, Manipur, Madhya Pradesh and Puducherry. The works are in
 progress. The Division though through sincere efforts increased its
 turnover from Rs 13.98 crore during the last year to Rs 17.03 crore in
 the current year, yet suffered due to superannuation of engineers and
 their exit from the Corporation due to the market forces. Lack of
 manpower resulted in non-achievement of some targets.
 
 The good consultancy work of Engineering Division has been appreciated
 and the Division has been assigned the work of preparation of detailed
 project report for seven selected tourist destinations/ circuits for
 infrastructure development. ITDC will enter into an MoU with the
 Ministry of Tourism for such assignments.
 
 Ashok Creatives
 
 The Ashok Creatives has designed and produced a number of collaterals
 for the Ministry of Tourism, Assam Tourism, Ministry of Environment and
 Forests, Election Commission of India (ECI), Archaeological Survey of
 India (ASI) and Second Administrative Reforms Commission (ARC).
 Archaeological Survey of Indias Coffee Table Book titled Monuments of
 India is one of the prestigious jobs handled by the Division during
 the year.
 
 Further, on behalf of the Ministry of Tourism, the Division developed
 high-quality designs for brochures on prominent tourist destinations,
 including Udaipur-Mount Abu, Varanasi-Lucknow, Malabar Coast, Konkan
 Coast, Kumaon Hills, Ahmedabad and Bhopal Indore Ujjain Mandu.
 
 The mounting of Sound & Light Shows undertaken by the Ashok Creatives
 at Udaigiri, Madurai and Sabarmati are in advanced stages of
 completion. The Sound & Light Show at Chandigarh was commissioned in
 March, in English language.
 
 Mounting of Sound & Light Shows at Haridwar Ferozshah Kotla, Delhi;
 Sarnath; Vivekananda Rock Memorial, Kanyakumari and Hampi are in
 various stages of development.  Besides, the Ashok Creatives has taken
 up mounting of a Sound & Light Show at Deogarh for the Jharkhand
 Tourism.
 
 The Ashok Creatives continues to put in aggressive efforts to secure
 more business from the Ministry of Tourism and other government
 organizations. As part of its endeavors, the Division is bidding for
 the Incredible India campaign of the Ministry of Tourism. Besides,
 the plans are afoot to procure additional print-production and design
 jobs from various clients.
 
 The Ashok Creatives witnessed a phenomenal rise in the turnover during
 the year under review.  The figure stood at Rs. 117.86 crore as against
 Rs.  4.35 crore achieved in the previous year. The profit too scaled
 new heights surpassing all earlier gains.  The year yielded a
 commanding profit of Rs. 1.85 crore vis-a-vis a loss of Rs. 0.97 crore
 registered in 2005-06.
 
 Ashok Institute of Hospitality and Tourism Management (AIH&TM)
 
 The Ashok Institute of Hospitality & Tourism Management (A1H&TM) has
 been undertaking Education & Training related activities during the
 year 2006-07 as a Strategic Business Unit of ITDC.  The turnover
 increased from Rs. 154.17 lakh in 2005-06 to Rs. 379.96 lakh in 2006-07
 thereby correspondingly increasing the net profit of Rs. 51.31 lakh
 earned during 2005-06 to Rs. 112.58 lakh in 2006-07.
 
 During 2006-07, AIH&TM was chosen to provide professional consultancy
 to the Rashtrapati Bhawan for enhancing the Food & Beverage service
 skills.
 
 AIH & TM is presently competing with National Council affiliated IHMs
 as well as private sector institutions like Air Hostess Academy and
 Frarklin Air Hostess Training and yielding better results in the
 delivery- of quality education to the students:
 
 During the year 2006-07, 13 Training Programmes have been conducted by
 AIH&TM for outside agencies covering 537 employees; 5 programmes
 covering 268 employees were conducted for the ITDC.
 
 As part of the ongoing activities, 42 Management Trainees and 190
 Apprentices in different trades, 160 industrial trainees, 110 Craft
 Course trainees in Culinary Skills are undergoing training. The
 Institute has also undertaken this year, the Capacity Building Training
 Programme for Himachal Pradesh Tourism, Nagaland Tourism and Jammu &
 Kashmir Tourism on behalf of Ministry of Tourism, Government of India.
 
 The Institute has conducted a unique project Air Hostess, Travel &
 Hospitality Management Career Training for 100 Scheduled Caste
 candidates sponsored by the Social Welfare Department, Government of
 Karnataka in Bangalore. A new batch of 175 candidates is under goining
 training in Bangalore. In Ahmedabad also, a batch of 140 candidates is
 undergoing similar training.
 
 AIH&TM has been conducting 4 years Bachelors Degree Course in
 International Hospitality Business Management since 2004 in affiliation
 with the Kurukshetra University, Haryana. Fourth batch of 62 students
 is in operation.
 
 In addition, AIH&TM has also started Trade Diploma Course in Hotel
 Operations in affiliation with the Board of Technical Education, Delhi
 Government.
 
 Plan Schemes
 
 The Capital Plan for the year 2006-07 envisaging an outlay of Rs. 16.36
 crore, entirely from internal resources, was formulated which included
 Rs 13.82 crore for improvement of essential nature in hotels and
 balance for other activities. The plan expenditure during the year was
 only Rs. 6.04 crore.
 
 The Annual Capital Plan for the year 2007-08 was initially formulated
 with an outlay of Rs 154.72 crore, which includes Rs 145.02 crore for
 renovation of existing ITDC hotels, including major renovation of The
 Ashok. However, the major renovation works of The Ashok Hotel have been
 deferred for 2008-09. The Revised Plan Outlay towards capital
 expenditure for 2007-08 is Rs. 29.45 crore.
 
 Implementation of Official Language Policy
 
 During 2006-07, efforts were continued to promote the use of Hindi in
 official work through motivation and training like awarding cash
 incentives for doing prescribed quantum of work in Hindi. Hindi
 workshops were organised for imparting training in noting-drafting in
 Hindi.  Hindi competitions were also organised during the Hindi month
 celebrations in order to create an environment conducive for promotion
 of Hindi.
 
 Human Resource Management and Industrial Relations
 
 The total number of employees in the Company as on 31.3.2007 stood at
 2754. Out of this, 797 employees belonged to Scheduled Castes, 60 to
 Scheduled Tribes and 101 to Other Backward Classes. During the year, 9
 employees were recruited. Out of this, 1 employee belonged to Scheduled
 Caste and 2 employees belonged to OBCs.
 
 However, 307 employees were promoted, out of which 39 employees
 belonged to Scheduled Castes, 7 employees belonged to Scheduled Tribes
 and 7 employees to Other Backward Classes.
 
 Further, there were 335 women employees constituting 12.16% of the
 total workforce of the Company. Of these, 48 were at the executive
 level and 287 at the non-executive level.
 
 The overall industrial relations situation in the Company continued to
 be cordial and good. There was no loss of mandays during the year.
 
 Particulars Employees
 
 None of the employees of the Company is drawing remuneration in excess
 of the limits prescribed under Section 217(2A) of the Companies Act,
 1956 read with Companies: (Particulars of Employees) Rules, 1975.
 
 Conservation of Energy & Technology Absorption
 
 Your Company is committed to energy conservation it every stage of its
 operation. In order to conserve energy, various measures were taken
 which included preventive maintenance schedule for plant & machinery,
 use of lower energy consuming devices, improvement in power factor and
 economizing the use of gas & fuel. Further, general awareness was
 created amongst the staff and engineers to conserve energy in every
 operation they undertook.
 
 All these measures contributed in effecting economy and saving of
 resources
 
 Since your Companys operations do not involve technology absorption,
 the particulars as per the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988 regarding technology
 absorption, are not applicable.
 
 Foreign Exchange Earnings & Outgo
 
 The Direct Foreign Exchange Earnings during the year 2006-07 were Rs.
 149.10 crore as against Rs. 146.94 crore in the previous year. The
 outgo of foreign exchange during the year was Rs. 56.48 crore as
 against Rs. 76.92 crore in 2005-06.
 
 During the year, 24 officials were sent on foreign tours at the cost of
 Rs. 12.30 lakh approximately in connection with promotion of the
 Companys business.
 
 Subsidiary Companies
 
 The Annual Accounts for the year 2006-07 in respect of the seven
 subsidiary companies viz. (i) Ranchi Ashok Bihar Hotel Corporation Ltd;
 (ii) Utkal Ashok Hotel Corporation Ltd; (iii) Donyi Polo Ashok Hotel
 Corporation Ltd; (iv) Assam Ashok Hotel Corporation Ltd; (v) MP Ashok
 Hotel Corporation Ltd; (vi) Pondicherry Ashok Hotel Corporation Ltd;
 and (vii) Punjab Ashok Hotel Company Ltd. were under
 finalisation/audit.
 
 The Ministry of Company Affairs have granted exemption under Section
 212 (8) of the Companies Act, 1956 from annexing the annual accounts of
 the subsidiary companies. The audited accounts of the subsidiary
 companies for the year 2006-07 will be circulated as soon as these are
 available.
 
 Board of Directors
 
 During the year, eight Board meetings were held to transact the
 business of the Company.
 
 - Pursuant to Article 61 of the Articles of Association of the Company,
 S/Shri Romesh Chopra, Jose Dominic and Ashok Pahwa were appointed as
 non-official Directors and they assumed the charge on the 17th April,
 2007.
 
 - Shri EK Bharat Bhushan, Joint Secretary & Financial Adviser was
 appointed part-time Government Director with effect from the 12th
 April, 2007 vice Shri Raghu Menon.
 
 - S/Shri Jyotindra Jain and Zubin Karkaria were appointed as part-time
 non-official Directors and they assumed the charge on the 19th July,
 2007.
 
 - Smt Leena Nandan, Joint Secretary in the Ministry of Tourism was
 appointed as part- time Government Director with effect from the 3rd
 September, 2007.
 
 - Shri M.S. Manchanda, Sr. Vice President (Hotels) has been appointed
 as Director (C&M) and he assumed charge of the post on the 21st
 September, 2007 (FN). .
 
 - S/Shri Atul Chaturvedi, Director (Tourism) and Manoj Sethi, Financial
 Controller (Tourism) ceased to be Government Directors on ITDC Board
 with effect from the 1st August, 2007.
 
 Pursuant to Article 61 of the Articles of Association of the Company,
 S/Shri Jose Dominic and Romesh Chopra, Directors retire by rotation at
 the ensuing Annual General Meeting and being eligible, offer themselves
 for re-appointment. In compliance with clause 49(F)(i) of the Listing
 Agreement, their brief resume nature of expertise in specific
 functional areas and names of the Committees of the Board in which they
 are members, are given in the Report on Corporate Governance.
 
 Corporate Governance
 
 As per the requirement of clause 49 of the Listing Agreement, a
 detailed report on Corporate Governance together with the following is
 given in Annexure-II which forms part of this Report.
 
 (i) CEO/CFO Certificate [as per clause 49(v)]
 
 (ii) Certificate from the Companys Auditors [as per Clause 49(vii)]
 and the Managements reply thereto.
 
 Directors Responsibility Statement
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, it is hereby confirmed:-
 
 - that in the preparation of the accounts for the financial year ended
 31st March, 2007, the applicable accounting standards have been
 followed read along with proper explanation relating to departures;
 
 - that the Directors have selected such accoun- ting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of state of
 affairs of the Company at the end of the financial year and of the
 profit of the Company for the year under review;
 
 - that the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 - that the Directors have prepared the accounts for the financial year
 ended 31st March, 2007 on a going concern basis.
 
 Auditors and Auditors Report
 
 The Comptroller & Auditor General of India have appointed M/s Khanna &
 Annadanam, Chartered Accountants as Statutory Auditors of the Company
 and also various Branch Auditors for the year 2006-07 under Section 619
 (2) of the Companies Act, 1956. The Managements replies to the
 comments and observations of the Statutory Auditors on the accounts for
 the year 2006-07 are given in Annexures- III & IV.
 
 Comments of the Comptroller and Auditor General of India
 
 The Accounts for the year ended 31st March, 2007 were reviewed by the
 Comptroller and Auditor General (CAG) of India. Their comments and
 reply of the Management thereto are annexed to the report.
 
 Acknowledgement
 
 The Board places on records its sincere appreciation towards the
 Companys customers/ clients for the support and confidence reposed by
 them in the organisation and look,forward to the continuance of this
 relationship in future.
 
 The Board also gratefully acknowledges the support and guidance
 received from various Ministries of the Government of India
 particularly the Ministry of Tourism, in Companys operations and
 developmental plans. The Board also wishes to record its deep gratitude
 to all the members of ITDC family whose enthusiasm, dedication and co-
 operation not only made the radical turnaround possible but also put
 the Company on this path of progress.
 
                                 For and on behalf of Board of Directors
 
                                                          (Parvez Dewan)
 Place : New Delhi                                          Chairman and
 Date  : 28.1.2008                                     Managing Director