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Tourism Finance Corporation of India Ltd.

BSE: 526650 Sector: Financials
NSE: TFCILTD ISIN Code: INE305A01015
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NSE 13:29 | 26 Oct 34.85 -0.85
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OPEN 36.00
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VOLUME 1503
52-Week high 89.00
52-Week low 27.35
P/E 3.78
Mkt Cap.(Rs cr) 283
Buy Price 34.95
Buy Qty 669.00
Sell Price 35.05
Sell Qty 100.00
OPEN 36.00
CLOSE 35.55
VOLUME 1503
52-Week high 89.00
52-Week low 27.35
P/E 3.78
Mkt Cap.(Rs cr) 283
Buy Price 34.95
Buy Qty 669.00
Sell Price 35.05
Sell Qty 100.00

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 First Annual Report on thebusiness and operations of the Company and the audited accounts for the financial year2019-20.

2 Financial Results

The Company's financial performance for the year ended 31st March 2020 is summarizedbelow:

(Amount in Crore)

SI. No. Particulars 2019-20 2018-19
Operational Results
1 Total Income 265.66 236.30
2 Total Expenditure 144.21 122.66
3 Operational Profit before provision and taxes 121.45 113.64
4 (Provision) for doubtful debts/investment 24.00 -
5 Profit before Tax 97.45 113.64
6 Provision for Tax 16.43 27.39
7 Profit Year Tax 81.02 86.25
8 Add: Surplus brought forward 72.63 70.98
9 Add: Reclassi_cation of realised gain from OCI to reserve 1.07 0.96
10 Add/(Less): Remea- surement of Actuarial loss(OCI)-directly recog- nised in surplus (0.42) 0.45
11 Less: Provision u/s 36(1) (viia) (c) of Income Tax Act1961 - 7.50
12 Less: Dividend & Dividend 21.41 19.46
Distribution tax Paid
PROFIT AVAILABLE FOR APPROPRIATION 132.89 131.68
13 Less: Appropriation
Transfer to Special Reserve under
- Section 36(1)(viii) of the Income Tax Act 1961 22.50 19.80
- Section 45 IC of the RBI Act 16.21 17.25
14 Less: Transfer to General Reserve 22.00 22.00
15 Balance carried to Balance Sheet 72.18 72.63

3. Operational Performance

During 2019-20 your Company adopted a cautious approach in sanctioning and disbursingloans due to the challenging and subdued business environment to avoid slippages andstressed assets. Further in view of general increase in cost of borrowing andnon-availability of funds in order to maintain liquidity to meet funds requirementsfresh disbursements were reviewed and made selectively. During 2019-20 TFCI achievedsanctions of Rs. 477.00 crore as against Rs. 1064.65 crore during the previous year. Theaggregate disbursements during the year were Rs. 483.35 crore as against Rs. 490.41 croreduring the financing previous year. TFCI has major exposure of tourism projectsparticularly hotels in 5-star and 3-star segments thereby having extra sectoral risk. Inorder to contain the sectoral risk TFCI proposes to have a mix of portfolio by lending toother sectors for short/medium term without compromising its focus on tourism. TFCI hasbeen selecting tourism projects for financing diligently resulting into low stress factoron its balance sheet. TFCI recorded total operational income of Rs. 265.66 crore (PY Rs.236.30 crore). TFCI earned Profit before tax of Rs. 97.45 crore for the year ended 31stMarch 2020 as against Rs. 113.64 crore during the previous year and Profit after Tax (PAT)of Rs. 81.02 crore for the year ended 31st March 2020 as against Rs. 86.25 crore duringthe previous year. The balance sheet size has increased to Rs. 2243.78 crore as on31.03.2020 as compared to total assets of Rs. 2090.68 crore as on 31.03.2019 depictinggrowth of 7.32%. Post Covid-19 the Board of Directors has approved a new Business Planfor your Company with a view to diversify into other related sectors without compromisingon its strength as a major lender for tourism sector. TFCI is now looking forward to gobeyond tourism financing and are looking at TFCI 2.0: Diversifying for Growth. TFCI willbe looking at various financing options for the MSME sector acquisition financingstructure financing and also to pursue activities to enhance the fee based income. TheCompany intends to grow its balance sheet size by aggressively pursuing the emergingopportunities which would enable us to leverage its capital and thereby improve return onequity.

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 7-8 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 2019-20 an aggregate amount of Rs. 55.69 crore was recoveredfrom NPAs and Rs. 7.88 crore from written-off loan(s)/investment(s).

Your company has recorded gross NPAs of Rs. 44.82 crore (1.99% of total assets) as on31st March 2020 despite increased stress recorded in the entire banking system. As theseaccounts are fully secured your Company is confident of realising the major portion ofthe outstanding NPAs. TFCI has made adequate provisions to withstand any marketeventuality and the Net NPAs of the company as on March 31 2020 were Rs. 28.90 crorerepresenting 1.29 % of the total assets.

4 Contribution to Tourism and Infrastructure Sector by TFCI

Your Company is the only institution in the country mainly funding tourism projectswith more than 30 years of existence. It has effectively played its main objective ofcatalysing investment in tourism sector thereby assisting the nation in creation oftourism infrastructure besides generating employment through tourism. Since inceptionTFCI has been instrumental in creation and addition of 51516 hotel rooms in the countryrepresenting almost equal to 30% of the room capacity as on date. With the financialassistance provided by TFCI the tourism related projects have provided direct employmentto about 95733 persons. The assistance provided to more than 910 projects by TFCI has alsoled to catalysing investments to the tune of Rs. 31143 Crore in the tourism and othersectors.

5. Change in Shareholding and Open offer

During March 2019 Redkite Capital Pvt. Ltd. (Redkite) (Promoters) alongwith IndiaOpportunities III Pte. Limited (PAC 1) Koppara Sajeeve Thomas (PAC 2) acquired 26% of thevoting equity share capital under the Open Offer. Thereafter the Board of Directors attheir meeting held on March 15 2019 appointed Shri Naresh T. Jain representing RCPL(Promoter); Shri Shyam Maheshwari representing India Opportunities III Pte. Ltd (PAC-1);and Shri Koppara Sajeeve Thomas (PAC-2) as Additional Non-Executive Non-IndependentDirector(s) in the Promoters Directors category and the same was approved by theshareholders in the 30th AGM held on August 9 2019.

Redkite one of the promoter shareholder during the year ended on March 31 2020 hassold their stake and their shareholding stands reduced below 10% of total voting rights inTFCI. Shri Naresh T. Jain representing (Redkite) (Promoter) resigned from the Board ofTFCI w.e.f. March 9 2020. Your Company received an application alongwith undertaking fromRedkite (Promoter) for reclassification as Public Shareholder in terms of Regulation 31Aof SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015. Theshareholders at the Extra Ordinary General Meeting held on 3rd July 2020 have sinceapproved the resolution for reclassification of Redkite Capital Pvt. Ltd. as Publicshareholder on the recommendation of the Board of Directors.

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 borrowings out ofinternal accruals and by way of additional loans from banks on short term basis. TFCI hastied up with various banks for financial assistance to meet its future requirement ofresources. Further your Company proposes to raise funds through issue of long termbonds/additional bank borrowing depending upon the interest rate scenario in the market.Your Company is confident of meeting the funds requirements by raising resources atcompetitive rates. 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 2020.

7. Regulatory Compliances

Your Company has been classified as Systemically 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 of37.56% as on the March 31 2020 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

Members at the 30th AGM held on August 9 2019 approved appointment of Shri AnirbanChakraborty as MD & CEO w.e.f. April 15 2019 for a period of 3 years and ShriB.M.Gupta as Whole Time Director till September 30 2019. Members also approved there-appointment of

(i) Shri Niraj Agarwal as Non-Executive Non-Independent Director liable to retire byrotation

(ii) Shri Naresh T. Jain Shri Shyam Maheshwari and Shri Koppara Sajeeve Thomas asNon-Executive Non-Independent Director(s) in the Promoters Directors category liable toretire by rotation and

(iii) also approved appointment of Mrs. Thankom T. Mathew as Independent Director forfive consecutive years w.e.f. October 24 2018. The Board of Directors on therecommendation of the Nomination and Remuneration Committee at its meeting held on August9 2019 approved to extend the tenure of Shri B.M.Gupta (DIN: 00065035) as Whole TimeDirector for a further period of 6 months i.e. upto March 31 2020 and members approvedthe same by passing resolution by postal ballot on November 12 2019. Thereafter theBoard of Directors at its meeting held on March 23 2020 on the recommendation of theNomination and Remuneration Committee approved to further extend the tenure of ShriB.M.Gupta as Whole Time Director for a further period upto December 31 2020 subject toapproval of members.

During the year Shri Rudhra Gangadharan Dr. K.B.N. Murthy and Shri S.SridharIndependent Director resigned as Independent Director(s) from the Board of the Companyvide their letter June 27 2019 July 14 2019 and July 16 2019 respectively due topersonal reasons and due to no other material cause. Shri Niraj Agarwal resigned from theBoard of TFCI vide his letter dated August 13 2020 as Non-Executive Director. Shri NareshT. Jain representing Redkite Capital Private Ltd. (Promoter) resigned from the Board ofTFCI w.e.f. March 9 2020. Shri Ravinder Kumar Sood was appointed as AdditionalNon-Independent Director (Non-Executive) on the recommendation of LIC (a majorshareholder) with effect from September 30 2019 subject to approval of the shareholdersin the forthcoming AGM. The Board appreciates the contribution made by the outgoingdirector viz. Shri Rudhra Gangadharan Dr. K. B. N. Murthy Shri S.Sridhar Shri NirajAgarwal and Shri Naresh T. Jain. In terms of the provisions of the Companies Act read withArticle 135 of the Articles of Association of the Company Shri Koppara Sajeeve Thomaswould retire by rotation at the forthcoming Annual General Meeting and is eligible forreappointment. The Board recommends appointment of Shri Ravinder Kumar Sood asNon-Independent Director (Non-Executive) and reappointment of Shri Koppara Sajeeve Thomas(liable to retire by rotation) and of Shri B.M. Gupta as Whole Time Director for a furtherperiod upto December 31 2020 in the forthcoming AGM. The Company has receiveddeclarations from all the Independent Directors of the Company confirming that they meetthe criteria of independence as required under Section 149 of the Companies Act 2013 andthe 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 performanceand that of its committees Independent directors and other directors based on parameterssuch as the attendance; participation and contribution; responsibility towardsstakeholders; exercise their duties with due and reasonable care skill and diligence andexercise of independent judgement. The Committee of Independent Directors evaluated theperformance of Non-Independent Directors including Chairman Managing Director. Similarlythe Non-Independent Directors evaluate the performance of Independent Directors. On thebasis of the report of performance evaluation it is determined whether to extend orcontinue the term of appointment/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.The details of programmes for familiarisation of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are put up on thewebsite 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 2019 July 2 2019 August 92019 November 11 2019 January 31 2020 and March 23 2020. 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 2019-20 Shri Anirban Chakraborty Managing Director & CEO (w.e.f. April 152019); Shri B.M.Gupta Whole Time Director; Shri Anoop Bali Chief Financial Officer andShri Sanjay Ahuja Company Secretary were the Key Managerial Personnel as per theprovisions of the Companies Act 2013.

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 ofnew guidelines and rules. The Nomination and Remuneration Committee undertakes a processof Due Diligence based on the criteria of qualifications technical expertise trackrecord integrity etc. for appointment of Independent Directors and other Directors. Thebasic objective of ascertaining the fit and proper criteria is to put in place an internalsupervisory process on a continuing basis and to determine the suitability of the personfor 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.html Remuneration Policy I. Board LevelRemuneration 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 FY2019-20 theNon-Executive Directors (except those in Government Service) were paid sitting fee of Rs.40000 and Rs. 20000 (plus tax) per meeting for attending the meetings of Board and itsCommittees respectively. However the new promoter directors viz. Mr. Shyam Maheshwari andMr. Koppara Sajeeve Thomas are not drawing any sitting fee from the Company.

II. In case of Key Managerial Personnel and other Employees

The pay structure allowances facilities etc. of Key Managerial Personnel and all theregular employees are as per the pay scale allowances and other facilities etc. as may beapproved by the Board and its committee from time to time in line with the salarystructure prevalent in other similar organization such as RBI/NABARD. The PerformanceLinked Incentives both for the Managing Director/WTD/Senior Management/ Other employees isas per the Board approved scheme. However the Company is in the process of transformingemployees remuneration on Cost to Company (CTC) basis and salaries of employees appointedafter April 1 2019 have been fixed on CTC basis.

10. Directors' Responsibility Statement

The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis as per the provisions ofthe Companies Act 2013 and the guidelines issued by SEBI/RBI. The Ind AS are prescribedunder Section 133 of the Companies Act 2013 read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules. 2016 Accounting policies have been consistently applied except where a newly-issuedaccounting standard is initially adopted or a revision to an existing accounting standardrequires a change in the accounting policy hitherto in use.

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 care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;

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

(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; and

(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.

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 hadentered into agreements with National Securities Depository Ltd. and Central DepositoryServices (India) Ltd. to facilitate holding and trading of shares in electronic form.Shareholders holding shares in physical form are requested to convert their holding intodematerialized form. Shareholders may utilize the nomination facility available by sendingduly filled form prescribed to our Registrar and Share Transfer Agent M/s MCS ShareTransfer Agent Limited.

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 2019-20 and 2020-21. The addresses of thesaid Stock Exchanges are stated elsewhere in the Annual Report.

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 approved appointmentof M/s Suresh Chandra & Associates (SCA) Chartered Accountants as Statutory Auditorsof TFCI for a period of five years effective from the financial year 2017-18 for a fee ofRs. 5 lakh plus applicable tax subject to review every year by the Board of Directors andratification by the members/ shareholders at every Annual General Meeting of the Company.However Companies Amendment Act 2017 read with notification dated 7.5.2018 deletedprovision of annual ratification of appointment of

Auditors. As such no resolution for approving the ratification of appointment ofStatutory Auditors has been proposed in the notice.

12.1 Auditors' Report

The Auditors Report along with notes to accounts referred to in the Auditors Report isself-explanatory and there are no qualifications in the report. The Company is notrequired 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/s Naveen Narang &Associates Practicing Company Secretary were appointed Secretarial Auditors of the Companyfor FY2019-20. The report of the Secretarial Auditors is enclosed as Annexure 4 to thisreport. The report is self-explanatory and do not call for any further comments. YourCompany 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 with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 listof employees drawing remuneration in excess of the limits set out in the said rules is asper details in Annexure 1.

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.

13.1 Committee 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 2013 read with the Companies(Accounts) Rules 2014 is not required as your Company's operations do not involvemanufacturing or processing activities. However while vetting the proposals received forsanction of financial assistance the aspect of energy conservation in case of assistedconcerns is given due consideration. The particulars regarding Foreign Exchange earningsand outgo are as follows: i) Total foreign exchange outgo : Nil ii) Total foreign exchangeearnings : 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 2011-12.

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 August 9 2019)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 socially responsible entity.

Your Company during the year under review has undertaken CSR activities/projects duringthe year 2019-20 amounting Rs. 213 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. 213 lakh was spent. The detailed report on the CSR contributionmade during the year 2019-20 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 as Annexure A. The requisite Certificate from M/s Naveen Narang & AssociatesPracticing Company Secretary confirming compliance with the conditions of CorporateGovernance as stipulated under the aforesaid SEBI (LODR) regulation form part of thisreport.

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 39 to the financial statement which sets out related party disclosures. The Policyon materiality of related party transactions and dealing with related party transactionsas approved by the Audit Committee and the Board may be accessed on the Company's websiteat the link: http:// www.tfciltd.com

17.3 Extract of Annual Return

Pursuant to section 92(3) of the Companies Act 2013 (‘the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return may beaccessed on the Company's website at the link: http://www.tfciltd. com. and attached asAnnexure-3.

17.4 Statement containing salient features of financial statements of subsidiaries

Your Company has promoted a subsidiary company TFCI Capital Ltd. which is yet to startoperations and statement containg salient features of financial statements of subsidiaryin attached as Annexure 3A.

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 and Risk ManagementCommittee for reviewing/implementing ALM policies and for managing the liquidity risk aswell as interest-rate and other risks. ALCO meets every month and reviews the cash flowsas well as the prevailing interest rate scenario its likely impact on the profitabilityand the steps to be initiated for effectively meeting the liabilities on the due dates.ALCO is also responsible for ensuring adherence of limits set by the Board as well asdeciding business strategies of TFCI in line with the overall budget and risk managementpolicy.The Company manages monitors and reports on the principal risks and uncertaintiesthat can impact its ability to achieve its planned objectives. The Company's managementsystems structures processes standards code of conduct and behaviours together formthe system that governs how it conducts the business of the Company and manages associatedrisks.

17.7 orders passed by the Significant 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 adverse order or penalties were levied duringFY2019-20 by any regulators.

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-BankingFinance Company (NBFC- ND-SI) with RBI. It provides financial assistance to tourismrelated/other projects in the ordinary course of business against the mortgaged security.The details particulars may be referred to in the financial statements.

17.10 Segment Reporting

Indian Accounting Standard 108 regarding Segment–wise Reporting does not apply toyour Company since revenues are primarily derived from only one segment i.e. financing ofprojects by way 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 2020 and the date of the Directors' report i.e. July 16 2020. Post Covid-19 theBoard of Directors has approved new Business Plan for your Company with a view todiversify into other related sectors without compromising on its strength as a majorlender for tourism sector. TFCI is now looking forward to go beyond tourism financing andare looking at TFCI 2.0: Diversifying for Growth.

TFCI will be looking at various financing options for the MSME sector acquisitionfinancing structure financing and also to pursue activities to enhance the fee basedincome. The Company intends to grow its balance sheet size by aggressively pursuing theemerging opportunities which would enable us to leverage its capital and thereby improvereturn on equity.

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 theguidance and co-operation extended by the Ministry of Finance Ministry of TourismGovernment of India and Reserve Bank of India Securities & Exchange Board of IndiaStock Exchanges and Depositories. The Board also appreciates and acknowledges thecontribution made by the employees whose concerted efforts and dedicated servicescontributed to sustained growth and performance of the Company.

For and on behalf of the Board of Directors
S. Ravi Anirban Chakraborty
(Chairman) (Managing Director & CEO)
Date : July 16 2020
Place : New Delhi

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