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Tourism Finance Corporation of India Ltd.

BSE: 526650 Sector: Financials
NSE: TFCILTD ISIN Code: INE305A01015
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OPEN 58.40
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VOLUME 17804
52-Week high 77.90
52-Week low 45.50
P/E 5.83
Mkt Cap.(Rs cr) 520
Buy Price 57.35
Buy Qty 101.00
Sell Price 57.45
Sell Qty 7.00
OPEN 58.40
CLOSE 57.40
VOLUME 17804
52-Week high 77.90
52-Week low 45.50
P/E 5.83
Mkt Cap.(Rs cr) 520
Buy Price 57.35
Buy Qty 101.00
Sell Price 57.45
Sell Qty 7.00

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 Thirty Second AnnualReport on the business and operations of the Company and the audited accounts for thefinancial year 2020-21.

2 Financial Results

The Company's financial performance for the year ended 31st March2021 is summarized below:

(Amount in Crore)

Sl.No. Particulars Standalone Consolidated
2020-21 2019-20 2020-21
Operational Results
1 Total Income 258.51 265.66 258.51
2 Total Expenditure 157.55 144.21 157.59
3 Operational Profit before provision and taxes 100.96 121.45 100.92
4 (Provision) for doubtful debts/investment 1.10 24.00 1.10
5 Profit before Tax 99.86 97.45 99.82
6 Provision for Tax 19.11 16.43 19.11
7 Profit After Tax 80.75 81.02 80.71
8 Add: Surplus brought forward 72.18 72.63 72.18
9 Add: Reclassification of realised gain from OCI to reserve 0.15 1.07 0.15
10 Add/(Less): Remeasurement of Actuarial loss (OCI)-directly recognised in surplus 0.05 (0.42) 0.5
11 Less: Provision u/s 36(1) (viia) (c) of Income Tax Act 1961
12 Less: Dividend & Dividend Distribution tax Paid 21.41
PROFIT AVAILABLE FOR APPROPRIATION 153.13 132.89 153.09
13 Less: Appropriation Transfer to Special Reserve under
- Section 36(1)(viii) of the Income Tax Act 1961 18.33 22.50 18.33
- Section 45 IC of the RBI Act 16.15 16.21 16.14
14 Less: Transfer to General Reserve 22.00 22.00 22.00
15 Balance carried to Balance Sheet 96.65 72.18 96.62

3. Operational Performance

During 2020-21 due to the challenging and subdued business environmenton account of COVID 19 pandemic your Company adopted a cautious approach in sanctioningand disbursing loans to avoid slippages and stressed assets. Further in order to maintainliquidity to meet funds requirement fresh disbursements were reviewed and madeselectively. Due to adverse effect of COVID on hospitality sector the focus of yourcompany was on balance-sheet protection and liquidity support for existing clients byfinancial assistance under Govt. guaranteed and/or RBI schemes which constitutedsubstantial disbursements for the year. During 2020-21 TFCI achieved sanctions of Rs468.99 crore as against Rs 477.00 crore during the previous year. The aggregatedisbursements during the year were Rs 457.27 crore as against Rs 483.35 crore during theprevious year. TFCI has major exposure in financing of tourism projects particularlyhotels in 5-star and 3-star segments thereby having extra sectoral risk. In order tocontain the sectoral risk TFCI proposes to have a mix of portfolio by lending to othersectors for short/medium term without compromising its focus on tourism.

TFCI for the year ended 31st March 2021 on a standalone basisrecorded total operational income of Rs 258.51 crore (PY: Rs 265.66 crore). Profit beforetax (PBT) of Rs 99.86 crore (PY: Rs 97.45 crore) and Profit after Tax (PAT) of Rs 80.75crore (PY: Rs 81.02 crore). The balance sheet size was Rs 2184.89 crore as on 31.03.2021as compared to total assets of Rs 2243.78 crore during the previous year. (Consolidatednumbers) Tourism sector has been impacted by COVID-19 pandemic and is expected to witnesssignificant consolidation and to provide huge opportunity for refinancing/aquisitionfunding/structured/special situation solutions etc. In view of the current businessenvironment the Board of Directors has approved Business Plan for your Company with aview to explore the growth opportunities both organic and inorganic across corehospitality segment and wholesale segment (social Infra and other resilient sectors). TheCompany proposes to grow its balance sheet size by cautiously pursuing the emergingopportunities which would enable us to leverage available capital and thereby improvereturn on equity.

3.1. Asset Quality:

The stressed assets posed continued challenges to the banking sectorduring the year. The subdued macroeconomic environment and tepid demand scenario due totravel restrictions also affected the tourism sector and thus adversely affectingTFCI's sanctions and disbursements and recovery from assisted concerns. However yourCompany followed strict appraisal criteria based on cash flow generating capacity of theproject/ resilience in operations post effect of Covid lockdown and adhered to theprudential norms for Non-Performing Assets (NPAs) prescribed by the regulatory authority.

Accordingly asset quality was largely contained on account of timelysupport given to existing borrowers under various RBI/Government measures to support MSME/Stressed Sectors. Your company has recorded gross NPAs of Rs 69.48 crore (3.18% of totalassets) as on 31st March 2021 despite increased stress recorded in the entire bankingsystem. As these accounts are fully secured and resolution plan for these assets have beenreceived in Corporate Insolvency Resolution Process (CIRP) under IBC 2016 your Company isconfident of realising the entire dues alongwith interest upto the admissible date. TFCIhas made adequate provisions to withstand any market eventuality and the Net NPAs of thecompany as on March 31 2021 were Rs 56.13 crore representing 2.57 % of the total assets.

4 Contribution to Tourism and Infrastructure Sector by TFCI

Your Company is the only institution in the country mainly fundingtourism projects with more than 32 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 51687 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 95963 persons. The assistance provided to more than 914 projects byTFCI has also led to catalysing investments to the tune of Rs 31258 Crore in the tourismand other sectors.

5. Dividend

The Board of Directors have recommended dividend of Rs 0.80 per EquityShare i.e. @ 8% on the paid-up Equity Share Capital for the financial year ended March 312021 subject to approval by the shareholders.

The dividend will be paid to those members whose names appear in theRegister of Members in respect of shares in physical form after giving effect to all validtransfer/transmission lodged with Registrar & Transfer Agent/Company on or beforeSeptember 22 2021. The dividend will be paid on the basis of beneficial ownership as perdetails to be furnished by the Depositories i.e National Securities Depository Ltd. (NSDL)and Central Depository Services (India) Ltd. (CDSL) as at the end of business on September22 2021 in respect of shares held in dematerialized form. Your company has formulatedDividend Distribution Policy that may be accessed on the Company's website at thelink: http://www.tfciltd.com/policies.html

6 Resource Mobilization

Your Company constantly monitors its resource base and taps theappropriate opportunity through diversified sources to minimize the weighted average costof funds.

During the year your Company met its fund requirements fordisbursement as well as repayment/redemption of loans out of internal accruals and by wayof additional borrowings from banks on short/medium term basis. TFCI has tied up withvarious banks for financial assistance to meet its future requirement of resources.Further your Company proposes to raise funds through issue of long term bonds/additionalbank borrowing depending upon the interest rate scenario in the market. Your Company isconfident of meeting the funds requirements by raising resources at competitive rates.

The Board of Directors at their meeting held on August 10 2021approved the raising of resources by way of (i) long/medium/short termborrowings/overdraft loans from Banks/Financial Institutions/others and/or Bonds /Debentures /other instruments for an amount not exceeding Rs 750 crore; and (ii) Raisingof capital through various modes by way of issue of Equity Shares and/or securitiesconvertible into Equity Shares by way of a preferential issue and/or qualifiedinstitutions placement (QIP) and/or Rights Issue or any combination thereof or any otherpermissible mode to any eligible person whether they be holders of Equity Shares of theCompany or not as may be decided by the Board and permitted under applicable laws andregulations of an aggregate amount not exceeding Rs 200 crore subject to approval of theMembers and other statutory authorities as may be required. The objective of raisingresources is to support business growth. The resource raising committee has beenconstituted to decide on the quantum timings and terms of raising additional resources.

Further the Board of Directors in its meeting held September 3 2021approved to issue and allot up to 9655700 (Ninety Six Lakh Fifty Five Thousand SevenHundred) fully paid up equity shares of face value of '10/- each at an issue price of'67.50/- (Rupees Sixty Seven and fifty paise only) including a premium of '57.50/- (Rupeesfifty Seven and fifty paise only) each for an allotment size of '65.18 crore by way ofpreferential allotment to the persons mentioned herein below subject to approval ofmembers:

Sl. Name of the Allottee No. Category No. of Equity Shares
1 Pransatree Holdings Pte. Limited Promoter Group (Body Corporate) 3703700
2 GKK Capital Markets Pvt. Ltd. Non-Promoter (Body Corporate) 2000000
3 Max Medisupport LLP Non-Promoter (Limited Liability Partnership) 2962000
4 Kemwell Private Limited Non-Promoter (Body Corporate) 740000
5 Mr. PS Jayakumar joint holder with Ms. Archana Swami Non-Promoter (Individual) 250000

Further the Board of Directors also approved to amend the Memorandumand Articles of Association for the enabling provision for raising convertible preferenceshares subject to approval of enabling resolution by Members in the forthcoming 32ndAnnual General Meeting.

The Company has not invited any deposit from the public under Section73 and 74 of the Companies Act 2013 during the year under review. There was no publicdeposit outstanding as at the beginning or end of the year ended on March 31 2021.

7. Regulatory Compliances

Your Company has been classified as Systemically Important Non-DepositAccepting Non-Banking Financial Company. RBI has been issuing guidelines from time to timewith regard 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 of39.87% as on March 31 2021 as against the prescribed norm of 15%.

8. Management's Discussion and Analysis Report Management'sDiscussion and Analysis report containing Industry outlook its environment outlook fortourism and other details as stipulated in the SEBI (LODR) Regulation is presented in aseparate section forming part of the Directors' Report.

9. Directors and Key Managerial Personnel

Members at the 31st AGM held on August 17 2020 approved there-appointment of (i) Shri Koppara Sajeeve Thomas as Non-Executive Director (ii)appointment of Shri Ravinder Kumar Sood as Non-Executive Director and (iii) re-appointmentof Shri B.M.Gupta as Whole Time Director till December 31 2020.

During the year the Board of Directors on the recommendation of theNomination and Remuneration Committee approved to extend the tenure of Shri B.M.Gupta asWhole-Time Director upto March 31 2022 subject to the approval of the shareholders butShri B.M.Gupta ceased to be director due to his untimely demise on November 26 2020.Further the Ministry of Tourism Govt. of India has withdrawn nomination of Shri SumanBilla which was taken note by the Board of Directors on November 10 2020. The Boardappreciates the valuable contributions made for the company by Late Shri B. M. Gupta andShri Suman Billa during their tenure.

In terms of the provisions of the Companies Act read with Article 135of the Articles of Association of the Company Shri Shyam Maheshwari would retire byrotation at the forthcoming Annual General Meeting and is eligible for reappointment. TheBoard recommends appointment of Shri Shyam Maheshwari as Non-Executive Director. TheCompany 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 theperformance evaluation of the Directors including Chairperson Board and its Committees.Accordingly your Company has devised the process and the criteria for the performanceevaluation which has been recommended by the Nomination & Remuneration Committee andapproved by the Board. The process of evaluation has been stipulated for the entire Boardfor its own performance and that of its committees Independent directors and otherdirectors based on parameters such as the attendance; participation and contribution;responsibility towards stakeholders; exercise their duties with due and reasonable careskill and diligence and exercise of independent judgement. The Committee of IndependentDirectors evaluated the performance of Non-Independent Directors including ChairmanManaging Director. Similarly the Non-Independent Directors evaluates the performance ofIndependent directors. On the basis of the report of performance evaluation it isdetermined whether to extend or continue the term of appointment/reappointment of theIndependent and other Director(s).

9.2 Director Orientation Program

The Directors on regular basis are made aware of the business modelsnature of industry and its dynamism the roles responsibilities and liabilities ofIndependent directors etc. Further business updates legal updates and industry updatesare made available to Independent Directors especially to the Audit Committee members onan ongoing basis by internal teams external consultants statutory and internal auditors.

The details of programmes for familiarisation of Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company and related mattersare put up on 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 June 4 2020; July 162020; August 13 2020; November 10 2020; February 10 2021; and March 30 2021. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013. The details about the meetings of Audit Committee and other Committees areprovided in the report on Corporate Governance which forms part of this Directors'Report.

9.4 Appointments/Resignations of the Key Managerial Personnel

During 2020-21 Shri Anirban Chakraborty Managing Director & CEO;Late Shri B.M.Gupta Whole Time Director (demised on 26.11.2020); Shri Anoop Bali ChiefFinancial Officer and Shri Sanjay Ahuja Company Secretary were the Key Managerialpersonnel as per the provisions of the Companies Act 2013.

9.5 Company's policy on appointment and remuneration

Your Company has constituted Nomination and Remuneration Committee ofDirectors and the Nomination and Remuneration Policy of your Company has been formulatedin compliance of new guidelines and rules. The Nomination and Remuneration Committeeundertakes a process of due diligence based on the criteria of qualifications technicalexpertise track record integrity etc. for appointment of Independent Directors and otherDirectors. The basic objective of ascertaining the fit and proper criteria is to put inplace an internal supervisory process on a continuing basis and to determine thesuitability of the person for appointment / continuing to hold appointment as a Directoron the Board of the Company. The Nomination and Remuneration Policy may be accessed on theCompany's website at the link: http://www.tfciltd.com/policies.html and brief detailsare given below:

Remuneration Policy

I. Board Level Remuneration Structure

(a) For Managing Director/Whole-Time Director - The remuneration ispaid as approved from time to time subject to the approval of the Board and Shareholdersas the case may be and as per the applicable provisions of Companies Act 2013 and underany other Act/ Rules/ Regulations for the time being in force.

(b) In case of Non-Executive / Independent Directors - During FY2020-21 the NonExecutive Directors (except Government Servants) were paid sitting fee ofRs 40000 and Rs 20000 (plus tax) per meeting for attending the meetings of Board and itsCommittees respectively. The sitting fee was revised to Rs 50000 and Rs 30000 (plus tax)per meeting w.e.f. 10.2.2021 for attending the meetings of Board and its Committeesrespectively. However Mr. Shyam Maheshwari; and Mr. Koppara Sajeeve Thomas Non-Executivedirector(s) representing promoter/ promoter's group are not drawing any sitting feefrom the Company.

II. In case of Key Managerial Personnel and other Employees

The pay structure allowances facilities etc. of Key ManagerialPersonnel and all the regular employees are as per the pay scale allowances and otherfacilities etc. as may be approved by the Board and its committee from time to time inline with the salary structure prevalent in similar organizations. The Performance LinkedIncentives both for the Managing Director/ WTD/Key Managerial Persons/Other employees isas per the Board approved scheme.

10. Directors' Responsibility Statement

The financial statements are prepared in accordance with IndianAccounting Standards (Ind AS) under the historical cost convention on accrual basis as perthe provisions of the Companies Act 2013 and the guidelines issued by SEBI/RBI. The IndAS are prescribed under Section 133 of the Companies Act 2013 read with Rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules. 2016 Accounting policies have been consistently applied exceptwhere a newly-issued accounting standard is initially adopted or a revision to an existingaccounting standard requires a change in the accounting policy hitherto in use.

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

(a) i n the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the directors had selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(d) Ihe directors had prepared the annual accounts on a going concernbasis; and

(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

11. Dematerialization of Shares and nomination facility and listing atStock Exchanges

As per the Securities and Exchange Board of India (SEBI) directivesthe transactions of 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 facilityavailable by sending duly filled form prescribed to our Registrar and Share TransferAgent M/s MCS Share Transfer Agent Limited.

Your Company's equity shares are listed with Bombay Stock Exchange Ltd.(BSE) and National Stock Exchange of India Ltd. (NSE). The Company has paid the AnnualListing Fees to said Stock Exchanges for the financial year 2020-21 and 2021-22. Theaddresses of the said Stock Exchanges are stated elsewhere in the Annual Report.

12. Auditors

In terms of the provision of Section 139(1) of the Companies Act 2013M/s Suresh Chandra & Associates (SCA) Chartered Accountants were appointed by themembers as Statutory Auditors of the company for a period of five years effective from thefinancial year 2017-18 for a fee of Rs 5 lakh plus applicable tax and their fee wasincreased to Rs 6.25 lakh from FY 2020-21. However in compliance of RBI circular datedApril 27 2021 (effective from FY 2021-22) the term of existing Auditors who has alreadycompleted tenure of three years shall end on 30.9.2021 and the Company shall appoint newStatutory Auditors for a period of three years. M/s. Suresh Chandra & Associates havecommunicated vide letter dated 10.8.2021 their intent to resign as statutory auditors ofthe Company since they have completed four years of continuous audit and are ineligible tocontinue as auditors. Accordingly the Board of Directors on the recommendation of theAudit Committee recommended to approve appointment of M/s M. Verma & AssociatesChartered Accountants (Firm Registration No. 501433C) as Statutory Auditors of the companyby the members in the forthcoming Annual General Meeting for a period of three yearseffective from the financial year 2021-22 for a fee of Rs 7.50 lakh plus applicable tax.

12.1 Auditors' Report

The Auditors Report alongwith notes to accounts referred to in theAuditors Report is self-explanatory and there are no qualifications in the report. TheCompany is not required to maintain cost record u/s 148 of the Companies Act 2013.

12.2 Secretarial Audit

In terms of Section 204 of the Act and Rules made there under M/sNaveen Narang & Associates Practicing Company Secretary were appointed SecretarialAuditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure 3to this report. The report is self-explanatory and do not call for any further comments.Your Company complies with all applicable mandatory Secretarial Standards issued by TheInstitute of Company Secretaries of India.

13. Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 list of employees drawing remuneration in excess of the limits setout in the said rules is as per details in Annexure 2.

The ratio of the remuneration of each director to the medianemployee's remuneration and other details in terms of sub-section 12 of Section 197of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are forming part of this report asAnnexure 2.

13.1 Committee on Sexual Harassment

Your company is fully committed to take appropriate measures againstSexual Harassment of Women at Workplace as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. Internal Complaints Committee has beenset up to redress complaints received regarding sexual harassment. No Complaints has beenreceived in this regard during the year.

14. Energy Conservation Technology Absorption and Foreign ExchangeEarning and outgo

The particulars relating to energy conservation and technologyabsorption as required to be disclosed under Section 134 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 is not required as your Company'soperations do not involve in manufacturing or processing activities. However whilevetting the proposals received for sanction of financial assistance the aspect of energyconservation is given due consideration. The particulars regarding Foreign Exchangeearnings 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 toInvestor Education Protection Fund (IEPF) as required under the provision of the CompaniesAct 2013 upto and including Financial Year 2012-13.

Pursuant to the provisions of the Investor Education Protection Fund(Uploading of information regarding unpaid and unclaimed amounts lying with companies)Rules 2012 the Company has already filed the necessary form and uploaded the details ofunpaid and unclaimed amounts lying with the Company as on the date of last AGM (i.eAugust 17 2020) with the Ministry of Corporate Affairs.

16. Corporate Social Responsibility

Your Company has constituted Corporate Social Responsibility (CSR)Committee of Directors and the CSR Policy of your Company has been formulated forimplementation in Compliance with the provision of Section 135 of the Companies Act 2013and Rules made thereunder. The Corporate Social Responsibility Policy (CSR Policy) may beaccessed on the Company's website at the link: http://www.tfciltd.com/policies.htmlThe Corporate Social Responsibility (CSR) policy has been approved with a philosophy:-

• To support activities aimed at development of human skillsparticularly needed for tourism sector.

• To support activities/projects which would promote tourism inthe country including protection of national heritage of art and culture restoration ofbuilding and sites of heritage importance work of art promotion and development oftraditional art handicraft etc.

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

Your Company during the year under review has undertaken CSRactivities/projects during the year 2020-21 amounting Rs 213.29 lakh (2% of the averagenet profit of the last three years) in compliance with CSR objectives and Policy of theCompany and the total CSR approved amount of Rs 213.29 lakh was spent. The detailed reporton the CSR contribution made during the year 2020-21 is annexed as Annexure 1.

17. Corporate Governance and other disclosures Your Directorsreaffirm their continued commitment to good corporate governance practices and endorseCorporate Governance practice in accordance with the provisions of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015. Your company has complied withall the mandatory requirements of the said clause. The Report on the Corporate Governanceas stipulated under SEBI (LODR) Regulation forms part of the Annual Report. The requisiteCertificate from M/s Naveen Narang & Associates Practicing Company Secretaryconfirming compliance with the conditions of Corporate Governance as stipulated under theaforesaid SEBI (LODR) Regulation is attached to this report as Annexure A.

17.1 Vigil mechanism

Pursuant to the requirement of the Companies Act 2013 and SEBI (LODR)Regulation the Company has a Vigil mechanism and Whistle blower policy under which theemployees are free to report violations of applicable laws and regulations and the Code ofConduct. The reportable matters may be disclosed to the Audit Committee. Employees mayalso report directly to the Chairman of the Audit Committee. During the year under reviewno employee was denied access to the Audit Committee. The policy on vigil mechanism andWhistle Blower policy 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 Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis.

There were no materially significant related party transactions enteredby the Company with Promoters Directors Key Managerial Personnel or other persons whichmay have a potential conflict with the interest of the Company during the year. TheCompany's related party transactions are generally with its Associates. The relatedparty transactions are entered into based on synergy in operations long-term strategy forsectoral investments and profitability. All related party transactions are on anarms' length basis and are intended to further the Company's interests. YourDirectors draw attention of the members to Note 38 to the financial statement which setsout related party disclosures.

The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Audit Committee and the Board may beaccessed on the Company's website at the link: http:// www.tfciltd.com

17.3 Annual Return and Business Responsibility Report

The Annual Return of the Company as on March 31 2021 is available onthe Company's website and can be accessed at the link: http://www.tfciltd.com.Further as stipulated under the Listing Regulations the Business Responsibility Report(BRR) describing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as Annexure 4.

17.4 Statement containing salient features of financial statements ofsubsidiaries

Your Company has promoted a subsidiary company TFCI Capital Ltd.(TFCICL) and the consolidated financial statements have been prepared in accordance withInd-AS 110 for the financial year 2020-21 as TFCICL has commenced operations during theyear. A report on the performance and financial position of the subsidiary company as perthe Companies Act 2013 is provided in the prescribed Form AOC-1 as Annexure 2A. Duringthe year under review there were no companies which have become or have ceased to be thesubsidiary or joint venture of your Company.

17.5 Documents placed on the Website

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

17.6 Risk Management Policy

The Company has developed and implemented the Risk Management policyand Asset Liability Management (ALM) Policy and the Risk Management Committee of the Boardreviews the same periodically. Your Company has also constituted ALM Committee 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 orderswere passed by the regulators or courts or tribunals impacting the going concern statusand company's operations. Your Company is registered with RBI as NBFC-ND-SI and notregistered with any other financial sector regulators. No adverse order or penalties werelevied during FY2020-21 by any regulators.

17.8 Internal financial controls

The Company has in place set of standards processes and structurewhich enable to implement internal control system and ensure that same are adequate andoperating effectively commensurate with the size scale and operations of its businessoperation. To maintain objectivity and independence the Internal Audit function reportsto the Chairman of the Audit Committee of the Board.

Internal Auditor of the Company monitors and evaluates the efficacy andadequacy of internal control systems in the company its compliance with the operatingsystems accounting procedures and policies at all locations of company's operation.Internal Audit Report stimulates other functional departments to improve their systems andprocedures to strengthen the controls. All these issues are regularly placed before theAudit Committee meeting for its deliberations and monitoring.

17.9 Particulars of Loans given Investments made Guarantees given andSecurities provided

Your Company is a specialised financial institution registered asNon-Banking Finance Company (NBFC- ND-SI) with RBI. It provides financial assistance totourism related/other projects in the ordinary course of business against the mortgagedsecurity. The details particulars may be referred to in the financial statements.

17.10 Segment Reporting

Accounting Standard 17 regarding segment-wise reporting does not applyto your Company since revenues are primarily derived from only one segment i.e. financingof projects by way of loan or investments.

17.11 Material Changes and Commitment Affecting Financial Position ofthe Company

There are no material changes and commitments affecting the financialposition of the Company which has occurred between the end of the financial year of theCompany i.e. March 31 2021 and the date of the Directors' report i.e. September 32021. In view of the current business environment the Board of Directors has approvedBusiness Plan for your Company with a view to explore the growth opportunities bothorganic and inorganic across core hospitality segment and wholesale segment (social Infraand other resilient sectors). The Company proposes to grow its balance sheet size bycautiously pursuing the emerging opportunities which would enable us to leverage availablecapital and thereby improve return on equity.

18. Acknowledgements

The Board expresses and places on record their gratitude for theconsistent support and guidance given by the promoter and other shareholders and Banks.Your Directors wish to place on record their sincere gratitude to valued customersbankers investors and members for their continued patronage.

The Board also acknowledges and appreciates the guidance andco-operation extended by the Ministry of Finance Ministry of Tourism Government ofIndia and Reserve Bank of India Securities & Exchange Board of India StockExchanges and Depositories. The Board also appreciates and acknowledges the contributionmade by the employees whose concerted efforts and dedicated services contributed tosustained growth and performance of the Company.

For and on behalf of the Board of Directors
S. Ravi Anirban Chakraborty
(Chairman) (Managing Director & CEO)
Date : September 3 2021
Place : New Delhi

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