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Tourism Finance Corporation of India Ltd.

BSE: 526650 Sector: Financials
NSE: TFCILTD ISIN Code: INE305A01015
BSE 00:00 | 22 Mar 119.05 0.85
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121.30

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NSE 00:00 | 22 Mar 119.25 1.30
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121.25

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OPEN 120.10
PREVIOUS CLOSE 118.20
VOLUME 18484
52-Week high 169.00
52-Week low 108.10
P/E 13.45
Mkt Cap.(Rs cr) 961
Buy Price 119.05
Buy Qty 23.00
Sell Price 119.05
Sell Qty 277.00
OPEN 120.10
CLOSE 118.20
VOLUME 18484
52-Week high 169.00
52-Week low 108.10
P/E 13.45
Mkt Cap.(Rs cr) 961
Buy Price 119.05
Buy Qty 23.00
Sell Price 119.05
Sell Qty 277.00

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

Company director report

To the Members:

1. Presentation of the Annual Report

Your Directors have pleasure in presenting the Twenty Ninth Annual Report on thebusiness and operations of the Company and the audited accounts for the financial year2017-18.

2 Financial Results

The Company's financial performance for the year ended 31st March 2018 issummarized below:

(Amount in Crore)

Particulars 2017-18 2016-17
A. Operational Results
1 Total Income 227.17 208.54
2 Total Expenditure 118.33 114.88
3 Operational Profit before provision and taxes 108.84 93.66
4 Exceptional Income from the sale of property - 23.36
5 (Provision) for doubtful debts/investment - (20.00)
6 Profit before Tax 108.84 97.02
7 Provision for Tax 33.53 26.59
8 Profit After Tax 75.31 70.43
B. Appropriation of Profit
9 Opening Balance in Profit & Loss Account 10.02 7.23
10 Less: Provision for doubtful debts u/s 36(1)(viia) of the Income Tax Act 1961 4.10
C. Profit Available For Appropriation
11 Special Reserve under Section 36(1)(viii) of the Income Tax Act 1961 16.48 17.51
12 Special Reserve u/s 45 IC of RBI Act 15.06 14.09
13 Transfer to General Reserve 20.00 15.00
14 Proposed Dividend - 16.14
15 Provision for Dividend Tax - 3.28
16 TDS Credit Rejection for earlier years - 1.62
17 Closing Balance in Profit and Loss Account 29.69 10.02
81.23 77.66

3. Operational Performance

TFCI closed another year 2017-18 with good operational results having positive impacton the financials of the company with better future prospects. During 2017-18 TFCIachieved sanctions of Rs.1272.30 crore as against previous year sanctions of Rs.974.80crore. TFCI made disbursement of Rs.692.98 crore as against previous year disbursement ofRs.487.37 crore. TFCI has major exposure in financing of tourism projects particularlyhotels in 5-star and 3-star segments and shall strive to have a mix of portfolio bylending to other sectors for short/medium term without compromising its focus on tourism.TFCI has been selecting tourism projects for financing diligently resulting into lowstress factor on its balance sheet. TFCI recorded total operational income of Rs.227.17crore (PY: Rs.208.54 crore) profit before tax of Rs. 108.84 crore (PY:Rs.97.02 crore)depicting growth of 12.18% and profit after tax of Rs.75.31 crore (PY: Rs.70.43 crore).The balance sheet size has increased to Rs.2007.44 crore for the year under review ascompared to that of Rs. 1700.30 crore depicting growth of about 18%. Your company hasrecorded gross NPAs of Rs.33.30 crore (1.63% of total assets) as on 31st March2018 despite stress recorded all over in the entire banking system.

Your company continues to explore possibilities for new businesses and has been on thelook out for existing customers who might have financial requirements for setting up newprojects renovation modernisation and or expansion. However to ensure increase in itsbalance sheet size your Company decided to concentrate on take-over financing ofpotentially viable projects so as to ensure quick disbursement. Your Company expects ampleopportunities in appraisal advisory services syndication of debts etc. resulting innon-fund based income for the Company. Besides TFCI has been actively pursuingconsultancy assignments for Private Sector and State Governments and their agencies.

3.1. Asset Quality:

The stressed assets posed continued challenges to the banking sector during the year.The subdued macroeconomic environment and tepid demand scenario in the past 7 years hadalso affected the tourism sector and thus adversely affecting TFCI's sanctions anddisbursements and recovery from assisted concerns. Your Company followed strict appraisalcriteria based on cash flow generating capacity of the project and adhered to theprudential norms for Non-Performing Assets (NPAs) prescribed by the regulatory authority.During the financial year 2017-18 no new account was downgraded and TFCI has been able torecover Rs.27.52 crore from non-performing/ Written-off

accounts (Principal: Rs.3.23 crore Interest:Rs.23.87 crore & other charges:Rs.0.42 crore). Further one NPA account of Rs.36.32 crore was upgraded to standard assetin view of satisfactory credit record post restructuring as per extant RBI norms. As aresult the Gross NPA reduced from Rs.81.12 crore to Rs.33.30 crore as on March 31 2018.As all these accounts are fully secured your Company is confident of realising the entireover dues alongwith further interest/principal during the current year. However TFCI hasmade adequate provisions in the books of accounts. The Net NPAs of the company as on March31 2018 were Rs.1.22 crore (PY: Rs.43.02 crore) representing 0.06% of the total assets.

4 Contribution to Tourism and Infrastructure Sector by TFCI

Your Company is the only institution in the country exclusively funding tourismprojects with more than 29 years of existence. It has effectively played its mainobjective of catalysing investment in tourism sector thereby assisting the nation increation of tourism infrastructure besides generating employment through tourism. Sinceinception TFCI has been instrumental for creation and addition of 50350 hotel rooms inthe country representing almost equal to 30% of the room capacity as on date. With thefinancial assistance provided by TFCI the tourism related projects has provided directemployment to about 93286 persons. The assistance provided to more than 863 projects byTFCI has also led to catalysing investments to the tune of Rs.30182 Crore in the tourismand other sectors.

5. Dividend

The Board of Directors have recommended dividend of Rs.2 per Equity Share i.e. @ 20% onthe paid-up Equity Share Capital for the financial year ended March 31 2018. The totalpayout on account of payment of dividend will be Rs.16.14 Crore besides dividend tax ofRs.3.32 crore subject to approval by the shareholders.

The dividend will be paid to those members whose names appear in the Register ofMembers as on August 10 2018 in respect of shares in physical form. The dividend will bepaid on the basis of beneficial ownership as per details to be furnished by theDepositories i.e National Securities Depository Ltd. (NSDL) and Central DepositoryServices (India) Ltd. (CDSL) as at the end of business on August 3 2018 in respect ofshares held in dematerialized form.

6. Resource Mobilization

Your Company constantly monitors its resource base and taps the appropriate opportunityto minimize the weighted average cost of funds. During the year your Company met its fundrequirements for disbursement as well as repayment/redemption of loans by way of financialassistance from banks on short term basis and

internal accruals. TFCI has tied up with various banks for financial assistance to meetits future requirement of resources. Further your Company proposes to raise funds throughissue of commercial paper or bonds depending upon the interest rate scenario in themarket. Your Company is confident of meeting the funds requirements by raising resourcesat competitive rates. The Company has not invited any deposit from the public underSection 73 and 74 of the Companies Act 2013 during the year under review. There was nopublic deposit outstanding as at the beginning or end of the year ended on March 31 2018.

7. Regulatory Compliances

Your Company has been classified as Systematic Important Non-Deposit AcceptingNon-Banking Financial Company. RBI has been issuing guidelines from time to time withregard to capital adequacy standards income recognition asset classificationprovisioning and other related matters. The accounting policies of your Company conform tothese guidelines. The capital adequacy for your Company stands at a comfortable level of42.28% as on the March 31 2018 as against the prescribed norm of 15%.

8. Management's Discussion and Analysis Report

Management's Discussion and Analysis report containing Industry outlook itsenvironment outlook for tourism and other details as stipulated in the SEBI (LODR)Regulation is presented in a separate section forming part of the Directors' Report.

9. Directors and Key Managerial Personnel

During the year Shri Rudhra Gangadharan I.A.S. (Retd.) was appointed as an additionaldirector(s) in the Independent Category on June 30 2017 by the Board of Directors for aperiod upto 5 (Five) years. His appointment was approved by shareholders in the 28th AnnualGeneral Meeting held on September 25 2017. Members also approved the re-appointment ofShri Niraj Agarwal as Non-Executive Non-Independent Director who is liable to retire byrotation and also reappointed Shri S.Ravi and Shri S.Sridhar as Independent Director(s)for second term of 5 (Five) years. During the year Shri Sanjeev Kaushik Non-ExecutiveChairman resigned as Director which was accepted by the Board of Directors w.e.f.September 22 2017. Ministry of Finance Department of Financial Services Govt. of Indiavide letter dated November 29 2017 advised that consequent upon disinvestment of majoritystake of IFCI Ltd. in TFCI Ltd. the Government of India has decided to withdraw itsnominee director Shri A.K.Dogra and he ceased to be director w.e.f. December 8 2017. ShriB.N.Nayak Director had resigned from the Board of Directors of the Company and hisresignation has been accepted w.e.f. March 26 2018. Shri Bapi Munshi was appointed as anAdditional Director in Independent Category w.e.f. February 1 2018 for a period of 5

years subject to the approval of the shareholders in the forthcoming Annual GeneralMeeting by way of Special Resolution. The tenure of Shri S.C.Sekhar Independent Directorwas upto 17th March 2018. The Board of Directors has approved re-appointmentof Shri S.C.Sekhar as Independent Directors for second term of 5 (five) years w.e.f. March18 2018 upto February 28 2023 subject to approval of shareholders by way of SpecialResolution in the next Annual General Meeting.

Further as per the terms of appointment the tenure of Shri Satpal Kumar Arora formerManaging Director was upto March 31 2018 i.e. till he attained the age of 60 years. TheBoard of Directors at the meeting held on March 26 2018 extended the tenure of ShriSatpal Kumar Arora Managing Director for further period of 3 months i.e. upto June 302018 subject to the approval of the shareholders in the forthcoming Annual GeneralMeeting. However Shri Satpal Kumar Arora submitted his resignation as ManagingDirector/Director of the Company which was accepted by the Board of Directors w.e.f. May15 2018. The Board of Directors appointed Shri B.M.Gupta Executive Director as Managerof the Company w.e.f. May 16 2018 till joining of the new Managing Director.

The Board appreciates the contribution made by the outgoing directors viz. Shri SanjeevKaushik Shri A.K.Dogra Shri B.N.Nayak and Shri Satpal Kumar Arora. In terms of theprovisions of the Companies Act read with Article 135 of the Articles of Association ofthe Company Shri Niraj Agawal would retire by rotation at the forthcoming Annual GeneralMeeting and is eligible for reappointment. The Board recommends the reappointment of ShriNiraj Agawal and Shri S.C.Sekhar in the forthcoming Annual General Meeting. The tenure ofShri K.B.N.Murthy is upto January 21 2019 and the Board of Directors has recommendedre-appointment of Shri K.B.N.Murthy as Independent Director for second term w.e.f. January22 2019 till December 31 2023 subject to approval of shareholders by way of SpecialResolution in the next Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as required under Section 149 ofthe Companies Act 2013 and the SEBI (LODR) Regulation.

9.1 Performance Evaluation of the Board

The Companies Act 2013 and SEBI (LODR) Regulation stipulate the performance evaluationof the Directors including Chairperson Board and its Committees. Accordingly yourCompany has devised the process and the criteria for the performance evaluation which hasbeen recommended by the Nomination & Remuneration Committee and approved by the Board.

The process of evaluation has been stipulated

for the entire Board for its own performance and that of its committees Independentdirectors and other directors based on parameters such as the attendance; participationand contribution; responsibility towards stakeholders; exercise their duties with due andreasonable care skill and diligence and exercise of independent judgment. The Committeeof independent Directors evaluated the performance of NonIndependent Directors includingChairman Managing Director. Similarly the NonIndependent Directors evaluates theperformance of Independent directors. On the basis of the report of performanceevaluation it is determined whether to extend or continue the term ofappointment/reappointment of the Independent and other Director(s).

9.2 Director Orientation Program

The Directors on regular basis are made aware of the business models nature ofindustry and its dynamism the roles responsibilities and liabilities of Independentdirectors etc. Further business updates legal updates and industry updates are madeavailable to Independent Directors especially to the Audit Committee members on anongoing basis by internal teams external consultants statutory and internal auditors. Aspecial programme for Directors was organised on 28th June 2018 to familiarisethem with the implementation of Ind AS through the outside consultants.

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link:http://www.tfciltd.com/policies.html

9.3 Details of Board meetings

During the year 6 Board Meetings were held on May 29 2017 July 31 2017 November 12017 January 9 2018 February 7 2018 and March 26 2018. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013. The detailsabout the meetings of Audit Committee and other Committees are provided in the report onCorporate Governance which forms part of this Directors' Report.

9.4 Appointments/Resignations of the Key Managerial Personnel

During 2017-18 Shri Satpal Kumar Arora former Managing Director; Shri Anoop Bali

Chief Financial Officer and Shri Sanjay Ahuja Company Secretary were the KeyManagerial Personnel as per the provisions of the Companies Act 2013. Shri Satpal KumarArora submitted his resignation as Managing Director/Director of the Company which wasaccepted by the Board of Directors w.e.f. May 15 2018 and Shri B.M.Gupta ExecutiveDirector was appointed as Manager of the Company w.e.f. May 16 2018 till joining of thenew incumbent. There is no change in other Key Managerial Personnels.

9.5 Company's policy on appointment and remuneration

Your Company has constituted Nomination and Remuneration Committee of Directors and theNomination and Remuneration Policy of your Company has been formulated in compliance ofapplicable guidelines and rules. The Nomination and Remuneration Committee undertakes aprocess of Due Diligence based on the criteria of qualifications technical expertisetrack record integrity etc. for appointment of Independent Directors and other Directors.The basic objective of ascertaining the fit and proper criteria is to put in place aninternal supervisory process on a continuing basis and to determine the suitability of theperson for appointment / continuing to hold appointment as a Director on the Board of theCompany. The Nomination and Remuneration Policy may be accessed on the Company's websiteat the link:http://www.tfciltd.com/policies.htmlRemuneration Policy I. Board Level Remuneration Structure

(a) For Managing Director/Whole-Time Director - The remuneration is paid as approvedfrom time to time subject to the approval of the Board and Shareholders as the case maybe and as per the applicable provisions of Companies Act 2013 and under any other Act/Rules/ Regulations for the time being in force.

(b) In case of Non-Executive / Independent Directors

During FY2017-18 the Non-Executive Directors (except Government Servants) were paidsitting fees Rs.20000 and Rs. 10000 (plus service tax) per meeting upto January 8 2018for attending the meetings of Board and its Committees respectively. The Board revised thesitting fee w.e.f. January 9 2018 to Rs.40000 and Rs.20000 (plus tax) per meeting forattending the meetings of Board and its Committees respectively. The Sitting Fees may berevised by the Board of Directors subject to the overall limits as prescribed under theapplicable provisions.

No Director who is a Government Servant is entitled to receive any remunerationexcept as authorized by the Government.

II. In case of Key Managerial Personnel and other Employees -

1. The pay structure allowances facilities etc. of Key Managerial Personnel and allthe regular employees are as per the pay scale allowances and other facilities etc. asmay be approved by the Board and its committee from time to time in line with the salarystructure prevalent in other similar organization such as RBI/NABARD/ IFCI. ThePerformance Linked Incentives both for the Managing Director/Senior Management / Otheremployees is as per the Board approved scheme.

10. Directors' Responsibility Statement

In compliance of Section 134(5) of the Companies Act 2013 your Directors confirm:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

10.1Your Directors confirm compliance of the applicable Secretarial Standards issued byThe Institute of Company Secretaries of India by the Company.

11. Dematerialization of Shares and nomination facility and listing at Stock Exchanges

As per the Securities and Exchange Board of India (SEBI) directives the transactionsof the Company's shares must be compulsorily in dematerialized form.

Your Company had entered into agreements with National Securities Depository Ltd. andCentral Depository Services (India) Ltd. to facilitate holding and trading of shares inelectronic form. Shareholders holding shares in physical form are requested to converttheir holding into dematerialized form.

Shareholders may utilize the nomination facility available by sending duly filled formprescribed to our Registrar and Share Transfer Agent M/s MCS Share Transfer AgentLimited.

Your Company's equity shares are listed with Bombay Stock Exchange Ltd. (BSE) andNational Stock Exchange of India Ltd. (NSE). The Company has paid the Annual Listing Feesto said Stock Exchanges for the financial year 2017-18and 2018-19. The addresses of thesaid Stock Exchanges are stated elsewhere in the Annual Report.

11.1 Change in Shareholding

During September 2017 IFCI the original promoter shareholder sold 24% shares andRedkite Capital Pvt. Ltd. alongwith Person Acting in Concert (PAC) namely Koppara SajeeveThomas India Opportunities III Pte. Limited Centrum Capital Ltd. and others had acquiredapprox. 21% shares in TFCI. Your Company has received communication dated May 18 2018from IDFC Bank Ltd. (Manager to open offer) regarding public announcement for making openoffer by Redkite Capital Pvt. Ltd. (Acquirer) alongwith India Opportunities III Pte.Limited (PAC 1) Koppara Sajeeve Thomas (PAC 2) for acquisition of up to 20986355 equityshares of Rs.10 each of TFCI constituting 26% of the voting equity share capital at aprice of Rs.157.20 per Equity Share ("Offer Price"). The Acquirer alongwith PACshave filed the draft letter of offer (DLoF) with SEBI on 1st June 2018. As perthe DLoF the Acquirer alongwith PACs propose to acquire upto 26% of the Voting ShareCapital of the Company under the Open Offer. Accordingly the Acquirer shall become thepromoter of the Company and have management control over the Company subject to approvalfrom SEBI RBI and other regulatory authorities. The Company shall continue to be managedby the Board of Directors which shall have representative of acquirer alongwith PAC. TheBoard of Directors considered and approved the proposal for submitting an application withRBI regarding intention to change control/ management as per the recommendation of theNomination and Remuneration Committee and for publishing public notice subject to thenecessary approval of the Reserve Bank of India SEBI or any other necessary approval andalso upon Acquirer/PACs acquiring minimum 26% equity shares of the Company.

12. Auditors

In terms of the provision of Section 139(1) of the Companies Act 2013 the Board ofDirectors on

the recommendation of the Audit Committee of the Board subject to its confirmation bythe members/ shareholders in the Annual General Meeting approved appointment of M/s SureshChandra & Associates Chartered Accountants as Statutory Auditors of TFCI for a periodof five years effective from the financial year 2017-18 for a fee of Rs.5 lakh plusapplicable tax subject to review every year by the Board of Directors and ratification bythe members/shareholders at every Annual General Meeting of the Company. HoweverCompanies Amendment Act 2017 read with notification dated 7.5.2018 deleted provision ofannual ratification of appointment of Auditors. As such no resolution for approving theratification of appointment of Statutory Auditors has been proposed in the notice.

12.1 Auditors' Report

The Auditors Report alongwith notes to accounts referred to in the Auditors Report isself-explanatory and there are no qualifications in the report.

12.2 Secretarial audit

In terms of Section 204 of the Act and Rules made there under M/s Arun Kumar Gupta& Associates Practicing Company Secretary were appointed Secretarial Auditors of theCompany. The report of the Secretarial Auditors is enclosed as Annexure 3 to this report.The report is selfexplanatory and do not call for any further comments.

13. Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployees is drawing remuneration in excess of the limits set out in the said rules.

The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report as Annexure 1.

13.1Committee on Sexual Harassment

Your company is fully committed to take appropriate measures against Sexual Harassmentof Women at Workplace as per the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. No Complaints has been receivedin this regard during the year.

14. Energy Conservation Technology Absorption and Foreign Exchange Earning and outgo

The particulars relating to energy conservation and technology absorption as requiredto be disclosed under Section 134 of the Companies Act 2013read with the Companies(Accounts) Rules 2014 is not required

as your Company's operations do not involve in manufacturing or processing activities.However while vetting the proposals received for sanction of financial assistance theaspect of energy conservation in case of assisted concerns is given due consideration.The particulars regarding Foreign Exchange earnings and outgo are as follows:

i) Total foreign exchange outgo : Nil

ii) Total foreign exchange earnings : Nil

15. Transfer of amount to Investor Education and Protection Fund

Your Company has transferred unclaimed/unpaid dividend and shares to Investor EducationProtection Fund (IEPF) as required under the provision of the Companies Act 2013 upto andincluding financial year 2009-10.

Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e September 252017) with the Ministry of Corporate Affairs.

16. Corporate Social Responsibility

Your Company has constituted Corporate Social Responsibility (CSR) Committee ofDirectors and the CSR Policy of your Company has been formulated for implementation inCompliance with the provision of Section 135 of the Companies Act 2013 and Rules madethereunder. The Corporate Social Responsibility Policy (CSR Policy) may be accessed on theCompany's website at the link: http://www.tfciltd.com/policies.html The Corporate SocialResponsibility (CSR) policy has been approved with a philosophy:-

• To support activities aimed at development of human skills particularly neededfor tourism sector.

• To support activities/projects which would promote tourism in the countryincluding protection of national heritage of art and culture restoration of building andsites of heritage importance work of art promotion and development of traditional arthandicraft etc.

• To support activities which help cleaner greener and healthier environment andthereby enhancing TFCI's perception as a social responsible entity.

Your Company during the year under review has undertaken CSR activities/projects duringthe year 2017-18 amounting Rs.169.70 lakh (2% of the average net profit of the last threeyears) in compliance with CSR objectives and Policy of the Company and the total CSRapproved amount of Rs. 169.70 lakh was spent. The detail report on the CSR contributionmade during the year 2017-18 is annexed as Annexure 2.

17. Corporate Governance and other disclosures

Your Directors reaffirm their continued commitment to good corporate governancepractices and endorse Corporate Governance practice in accordance with the provisions ofSEBI (Listing Obligation and Disclosure Requirements) Regulations 2015. Your company hascomplied with all the mandatory requirements of the said clause. The Report on theCorporate Governance as stipulated under SEBI (LODR) Regulation forms part of the AnnualReport. The requisite Certificate from the M/s Arun Kumar Gupta & AssociatesPracticing Company Secretary confirming compliance with the conditions of CorporateGovernance as stipulated under the aforesaid SEBI (LODR) Regulation is attached to thisreport as Annexure 4.

17.1 Vigil mechanism

Pursuant to the requirement of the Companies Act 2013 and SEBI (LODR) Regulation theCompany has a Vigil mechanism and Whistle blower policy under which the employees are freeto report violations of applicable laws and regulations and the Code of Conduct. Thereportable matters may be disclosed to the Audit Committee. Employees may also reportdirectly to the Chairman of the Audit Committee. During the year under review no employeewas denied access to the Audit Committee. The policy on vigil mechanism and whistle blowerpolicy may be accessed on the Company's website at the link: http://www.tfciltd.com/policies.html

17.2 Related party transactions

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis.

There were no materially significant related party transactions entered by the Companywith Promoters Directors Key Managerial Personnel or other persons which may have apotential conflict with the interest of the Company during the year. The Company's relatedparty transactions are generally with its Associates. The related party transactions areentered into based on synergy in operations long-term strategy for sectoral investmentsand profitability. All related party transactions are on an arms length basis and areintended to further the Company's interests. Your Directors draw attention of the membersto Note 24 to the financial statement which sets out related party disclosures.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Audit Committee and the Board may be accessed on theCompany's website at the link: http:// www.tfciltd.com/policies.html .

17.3 Extract of Annual Return

Pursuant to section 92(3) of the Companies Act

2013 (‘the Act') and rule 12(1) of the Companies (Management and Administration)Rules 2014 extract of annual return is may be accessed on the Company's website at thelink: http://www.tfciltd.com as per Annexure 3.

17.4 Statement containing salient features of financial statements of subsidiaries

Your Company does not have any subsidiary or Holding Company.

17.5 Documents placed on the Website

Pursuant to the provisions of the Companies Act 2013 SEBI (LODR) Regulations theCompany is required to place various Policies/Documents/ Details on the website of theCompany. The Company has a functional website and all the requisite information is beinguploaded thereat.

17.6 Risk Management Policy

The Company has developed and implemented the Risk Management policy and AssetLiability Management Policy and the Risk Management Committee of the Board reviews thesame periodically. Your Company has also constituted ALM Committee (ALCO) and RiskManagement Committee for reviewing/ implementing ALM policies and for managing theliquidity risk as well as interest-rate and other risks. ALCO meets every month andreviews the cash flows as well as the prevailing interest rate scenario its likely impacton the profitability and the steps to be initiated for effectively meeting the liabilitieson the due dates. ALCO is also responsible for ensuring adherence of limits set by theBoard as well as deciding business strategies of TFCI in line with the overall budget andrisk management policy. The Company manages monitors and reports on the principal risksand uncertainties that can impact its ability to achieve its planned objectives. TheCompany's management systems structures processes standards code of conduct andbehaviours together form the System that governs how it conducts the business of theCompany and manages associated risks.

17.7 Significant and material orders passed by the regulators

During the year under review no significant and/or material orders were passed by theregulators or courts or tribunals impacting the going concern status and company'soperations. Your Company is registered with RBI as NBFC-ND-SI and not registered with anyother financial sector regulators. No penalties were levied during FY2017-18 by anyregulators.

17.8 Internal financial controls

The Company has in place set of standards processes and structure which enable toimplement internal control system and ensure that same are adequate and operatingeffectively.

17.9 Particulars of Loans given Investments made Guarantees given and Securitiesprovided

Your Company is a specialised financial institution registered as Non-Banking FinanceCompany (NBFC- ND-SI) with RBI. It provides financial assistance to tourism related/otherprojects in the ordinary course of business against the mortgaged security. The detailsparticulars may be referred to in the financial statements.

17.10 Segment Reporting

Accounting Standard 17 regarding Segment-wise Reporting does not apply to your Companysince revenues are primarily derived from only one segment i.e.financing of projects byway of loan or investments.

17.11 Material Changes and Commitment Affecting Financial Position of the Company

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. March31 2018 and the date of the Directors' report i.e. June 29 2018.

18. Acknowledgements

The Board expresses and places on record their gratitude for the consistent support andguidance given by the promoter and other shareholders and Banks. Your Directors wish toplace on record their sincere gratitude to valued customers bankers investors andmembers for their continued patronage.

The Board also acknowledges and appreciates the guidance and co-operation extended bythe Ministry of Finance Ministry of Tourism Government of India and Reserve Bank ofIndia Securities & Exchange Board of India Stock Exchanges and Depositories.

The Board also appreciates and acknowledges the contribution made by the employeeswhose concerted efforts and dedicated services contributed to sustained growth andperformance of the Company.

For and on behalf of the Board of Directors

S.Ravi B.M. Gupta

(Non-Executive Chairman) (Executive Director)

Date : 29.6.2018

Place : New Delhi