You are here » Home » Companies » Company Overview » Tourism Finance Corporation of India Ltd

Tourism Finance Corporation of India Ltd.

BSE: 526650 Sector: Financials
NSE: TFCILTD ISIN Code: INE305A01015
BSE 00:00 | 10 Aug 58.15 -0.40
(-0.68%)
OPEN

58.00

HIGH

59.10

LOW

56.90

NSE 00:00 | 10 Aug 58.45 0.15
(0.26%)
OPEN

58.70

HIGH

59.80

LOW

57.60

OPEN 58.00
PREVIOUS CLOSE 58.55
VOLUME 8798
52-Week high 77.90
52-Week low 45.50
P/E 6.16
Mkt Cap.(Rs cr) 526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 58.00
CLOSE 58.55
VOLUME 8798
52-Week high 77.90
52-Week low 45.50
P/E 6.16
Mkt Cap.(Rs cr) 526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tourism Finance Corporation of India Ltd. (TFCILTD) - Auditors Report

Company auditors report

To the Members of

Tourism Finance Corporation of India Limited Report on the StandaloneFinancial Statements Opinion

We have audited the accompanying Standalone financial statements ofTourism Finance Corporation of India Limited ("the Company") which comprise thestandalone balance sheet as at 31st March 2021 and the standalone statement of ProfitandLoss (including other comprehensive income) standalone statement of changes in equity andstandalone statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryfinancial statements") In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid standalone financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013

Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of

Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matter

We draw your attention to Note No. 57 to the accompanying standalonefinancial results which describes the uncertainties due to outbreak of Covid-19 pandemicand the management's assessment of its impact on the business operations of the company.

Our opinion on the Standalone financial statements is not modified inrespect of the above .

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report

S. No. Key Audit Matter How our audit addressed the key audit matters
1. Impairment of Financial Assets based on Espected Credit loss (ECL) (As de-
scribed in Note 41 of the standalone Financial Statements) The determination of impairment loss against financial assets are based on the expected credit loss model developed by the company based on the guiding principles prescribed under Ind AS 109. Read and assessed the Company's accounting policies for impairment of Financial assets and their Compliance with Ind AS 109 and the "Governance framework" in line with Reserve Bank of India (RBI) guidance.
Recognition and measurement of Impairment loss. allowances involve significant management judgement. These includes: Understood the Company's Expected Credit Loss (ECL) methodology the underlying assumptions and performed sample tests to assess the staging of outstanding exposures;
• Segmentation of the loan portfolio into homogenous pool of borrowers Assessed the Exposure at Default used in the impairment calculations on a test basis;
• Identification of exposures where there is a significant increase in credit risk Obtained an understanding of the basis and methodology adopted by management to determine 12 month and life-time probability of defaults for various homogenous segments and performed test checks.
• Completeness and timing of recognition of default in accordance with the prudential norms on Income Recognition Asset classification and provisioning pertaining to loan assets Assessed the data used in the impairment computation;
• Determination of the 12 months and lifetime probability of default for each of the segments identified and Understanding management revised processes regarding significant judgments and estimates involved in the impairment computation and additional management overlay provision arising from the effects of the ongoing COVID-19 pandemic and evaluated the reasonableness thereof;
• Loss given default for various exposures based on past trends/experience management estimates Assessed analytical reviews of disaggregated data to observe any unusual trends warranting additional audit procedures;
As explained in the notes to the standalone financial statements for the year ended March 31 2021 the management has determined the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The historical loss experience model previously used needed revisions considering the sectoral experiences current and future economic conditions and the effect of ongoing COVID-19 pandemic event on the customer's business operations / ability to pay dues. Reviewed advances including stressed advances on a sample basis with respect to compliance with the RBI Circulars/Guide- lines/Judicial pronouncements.
Based on such analysis the company has recorded an allowance aggregating to Rs 3185.80 Lakhs as at 31st March 2021 as included in the standalone financial statements. Read the standalone financial statement disclosures in respect of impairment losses on financial assets including the specific disclosures made with regard to the impact of ongoing CO- VID-19 in line with RBI Guidelines.
In view of the significance of the amount of loan assets in the standalone financial statements judgement used by the management in estimating the expected credit loss and uncertainties due to the ongoing COVID-19 pandemic we have considered allowance of credit loss as Key Audit Matter.
2 Pending litigations with tax authorities In assessing the exposure of the Company for the tax litigations we have performed the following procedures:
The Company operates in a complex tax environment and is required to discharge direct and indirect tax obligations under various legislations such as Income Tax Act 1961 the Finance Act 1994 Goods & Service Tax Act. The tax authorities under these legislations have raised certain tax demands on the Company in respect of the past periods. The Company has disputed such demands and has appealed against them at appropriate forums. As at March 31 2021 the Company has an amount of '152.12 Lakhs pertaining to various pending tax litigations. Under Ind AS the Company is required to perform an assessment of the probability of economic outflow on account of such disputed tax matters and determine whether any particular obligation needs to be recorded as a provision in the books of account or to be disclosed as a contingent liability. • Obtained an understanding of the process laid down by the management for performing their assessment taking into consideration past legal precedents changes in laws and regulations expert opinions obtained from external tax/legal experts (as applicable);
Considering the significant degree of judgement applied by the management in making such assessments and the resultant impact on the standalone financial statements we have considered it to be a key audit matter. • Assessed the processes and entity level controls established by the Company to ensure completeness of information with respect to tax litigations;
we undertook the following procedures:
• Read communications with relevant authorities including notices demands orders etc. relevant to the pending litigations as made available to us by the management;
• Tested the accuracy of disputed amounts from the underlying communications received from tax authorities and responses filed by the Company;
• Considered the submissions made to appellate authorities and expert opinions obtained by the Company from external tax / legal experts (wherever applicable) which form the basis for management's assessment;
• Assessed the positions taken by the management in the light of the aforesaid information.
• Read the disclosures included in the Standalone Financial Statements in this regard.
3 Modified Audit Procedures carried out in the light of continuing COVID-19 pandemic As the physical access was not possible necessary records/ re- ports/ documents/ certificates were made available to us by the company through digital medium emails and remote access to VPN. To this extent the audit process was carried out on the basis of such documents reports and records made available to us which were relied upon as audit evidence for conducting the audit and reporting for the current period.
Due to the continuing COVID-19 pandemic lockdown declared by some of the State Governments and travel restrictions imposed by State Governments/Local Authorities during the period of our audit audit could not be conducted by visiting the premises. As we could not gather audit evidence in person/ Physically and personal interaction with the officials of the company we have identified such modified audit procedures as Key Audit Matter. Accordingly our audit procedures were modified to carry out remotely. Accordingly we modified our audit procedures as follows.
Conducted verification of necessary records Documents electronically through remote access/ emails wherever physical access was not possible.
Carried out verification of scanned copies of the documents certificates and the related records made available to us through emails and VPN through remote access over secure network of the company.
Making enquiries and gathering necessary audit evidence through Video Conferencing dialogues and discussions over phone calls/conference calls emails and similar communication channels.
Discussions and resolution of audit observations telephonically/through emails instead of face-to-face interaction with the concerned/designated officials.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in thecompany's Annual Report but does not include the standalone financial statements and ourauditor's report thereon. Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information when it becomes available to us andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated.

When we read such other information as and when made available to usand if we conclude that there is a material misstatement therein we are required tocommunicate the matter to those charged with governance. We have nothing to report in thisregard.

Responsibilities of Management's and those charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance total comprehensive income changes in equityand cash flows of the Company in accordance with the Ind AS accounting principlesgenerally accepted in India. This responsibility also includes maintenance fadequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularitiesselection and application. of appropriate implementation and maintenance of accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concembasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to coase to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Repart) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Companies Act 2013 we give in the Annexure-A a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books

(c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of account

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the

e) On the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended: Inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act

g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure-B". Our report expresses ananmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts to the standalone financial statements; iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company

For Suresh Chandra & Associates
Chartered Accountants
Firm Reg. No: 001359N
(CA Ved Prakash Bansal)
Partner
Place : New Delhi M.No.: 500369
Date : May 31 2021 UDIN: 21500369AAAABQ1872

Annexure- A

The Annexure referred to in our Independent Auditors Report to themembers of Tourism Finance Corporation of India Limited on the standalone financialstatements for the year ended 31 March 2021 we report that:

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular system of physical verification of itsfixed assets every year. Accordingly fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

(c) The title deeds of immovable properties are held in the company'sname.

ii. The nature of the company's business/activities/ transactions doesnot require it to hold inventories. Hence the provisions of Clause 3(ii) of the Order arenot applicable to the company.

iii. The company has not granted any loan secured or unsecured to thecompanies firms and limited liability partnership or other parties covered in theregister maintained under section 189 of the Companies Act 2013 Hence the provisions ofClause 3(iii) (a) (b) & (c) of the Order are not applicable to the Company.

iv. There is no transaction during the year which attracts theprovision of Section 185 & 186 of the companies Act 2013.

v. The Company has not accepted any deposits from the public andconsequently the directives issued by the Reserve Bank of India and the provisions ofSection 73 to 76 or any other relevant provisions of the Companies Act and rules framedthere under are not applicable to the Company.

vi. According to Information and explanation given to us the CentralGovernment has not prescribed the maintenance of cost records under sub section (1) ofSection 148 of the Companies Act 2013 in respect of business carried out by the company.Therefore provisions of Clause 3(vi) of the Order are not applicable to the Company.

vii. a) The Company has been regular in depositing with appropriateauthorities undisputed statutory dues including provident fund Income tax service taxcess and any other statutory dues as applicable to it with appropriate authorities.

(b) According to the Information and explanations given to us dues ofIncome tax which have not been deposited on account of a dispute as at 31" March2021 are as follows:

Name of Statute Assessment Year Amount (in Rs) Forum where the dispute Is pending
Income Tax 2008-09 13851455 DCIT Delhi
Income Tax 2017-18 1360312 CIT (Appeal) Delhi

viii The Company has not defaulted in repayment of loans or borrowingsto any financial institution/bank Government or dues of debenture holders.

ix. The company has not raised any money by way of initial public offeror further public offer (including debt instruments) and term loans were applied for thepurposes for which those are raised.

x. To the best of our knowledge and according to the information andexplanation given to us no fraud by the company or any fraud on the Company by itsofficers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanationgiven to us the company has paid managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

xii. Since the company is not a Nidhi Company therefore provisions ofClause 3(xii) of the Order are not applicable to the Company.

xiii. In our opinion and according to the information and explanationgive to us all the transactions with the related parties entered into by the company arein compliance with Sections 177 and 188 of Companies Act 2013 and the details of whichhave been disclosed in the standalone financial statements etc. as required by theapplicable accounting standards;

xiv. The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview;

xv. The company has not entered into any non-cash transactions withdirectors or persons connected with him;

xvi. The company is registered under section 45-1A of the Reserve Bankof India Act 1934 as NBFC-ND-SI vide Registration No.:B.14.00005 dated 08.05.2009.

"Anncture B" to the Independent Anditor's Report on theStandalone Financial Statements of Tourism Finance Corporation of India Ltd. Report on theInternal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act") as referred to in paragraph (g) of "Reporton Other Legal and Regulatory Requirements' section

We have audited the internal financial controls over financialreporting of Tourism Finance Corporation of India Ltd (the Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2021 basedon the reporting criteria established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting issued by the Institute of Chartered Accountants of India.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note an Audit of Internal Financial Controls Over FinancialReporting and the Standards on Auditing issued by ICAI and deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles A company's internal financial control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

For Suresh Chandra & Associates
Chartered Accountants
Firm Reg. No: 001359N
(CA Ved Prakash Bansal)
Partner
Place : New Delhi M.No.: 500369
Date : May 31 2021 UDIN: 21500369AAAABQ1872

.