tourism finance corporation of india ltd Directors report

To the Members:

1. Presentation of the Annual Report

Your Directors have pleasure in presenting the Thirty Fourth Annual Report on the business and operations of the Company and the audited accounts for the financial year 2022-23.

2. Financial Results

The Companys financial performance for the year ended 31^st March, 2023 is summarized below:

(Amount in Crore)

Sl. Particulars	Standalone	Standalone
No.	2022-23	2021-22
A. OPERATIONAL RESULTS:
1 Total Income	231.70	254.31
2 Total Expenses	114.22	146.41
3 Profit before provision and tax	117.48	107.90
4 Provision for doubtful debts/ impairment in investment	8.11
5 Profit before Tax	109.37	107.90
6 Provision for Tax	21.42	22.58
7 Profit after Tax	87.95	85.32
8 Other Comprehensive Income	3.74	3.13
9 Total Comprehensive Income	91.69	88.45
B. RETAINED EARNINGS STATEMENT:
10 Profit after Tax for the year	87.95	85.32
11 Add: Surplus brought forward	114.36	96.65
12 Add: Reclassification of realised gain from OCI to reserve	1.09	0.18
13 Add/(Less): Remeasurement of Actuarial loss(OCI)- directly recognised in surplus	0.65	0.61
14 Less: Payment of Dividend for FY22	10.84	6.46
15 Profit available for appropriation	193.21	176.30
16 Less: Appropriation (i) Transfer to Special Reserve under:
- Section 36(1) (viii) of the Income Tax Act, 1961	20.07	20.87
- Section 45 IC of the RBI Act	17.59	17.07
(ii) Transfer to General Reserve	25.00	24.00
17 Balance carried to Balance Sheet	130.55	114.36

3. Operational Performance

During the financial year 2022-23, there was a notable resurgence in the demand for travel and tourism, primarily driven by the Government of Indias strong vaccination programme, reopening of borders, removal of travel restrictions and sustained economic growth. The year witnessed growing air traffic and robust recovery in the foreign tourist arrivals. The performance of hotels improved due to renewed footfalls and an upswing in demand created a demand-supply gap, leading to higher revenues, margin expansion and better profitability for the hoteliers.

Despite experiencing a surge in demand, tourism & hospitality industry players exercised caution during the first half of FY 2022-23. However, the later half of the year witnessed a gradual increase in investments in the industry. Moreover, the Indian Government acknowledges the significance of the tourism and hospitality sector in generating employment opportunities, attracting investments and contribution to GDP. The Government aims to develop and transform tourist destinations to provide world class visitor experience, making India one of the topmost destinations for sustainable and responsible tourism. The Government has fixed targets for 4000 million domestic tourist and 25 million foreign tourist arrivals by 2030, which is likely to create ample opportunities for growth/investments in the hospitality sector.

With continued growth in the economy and sharp rebound in the tourism sector during 2022-23, the operational and financial performance of your Company has improved over the previous year. Your Company actively pursued lending opportunities for new/existing projects across hospitality and other segments like social infrastructure limited to education & healthcare, manufacturing, residential real-estate and NBFC/HFC for onward secured lending to MSE/housing. During 2022-23, your Company sanctioned term loans of 750.22 crore (PY: 237.21 crore) and made aggregate disbursements of 560.60 crore (PY: 277.47 crore) depicting growth of 3.16 times and 2.02 times respectively. The Company for the year ended 31^st March 2023, recorded total income of 231.70 crore (PY: 254.31 crore), Profit before Tax (PBT) of 109.37 crore (PY: 107.90 crore) and Profit after Tax (PAT) of 87.95 crore (PY: 85.32 crore). As on 31^st March 2023, your Company was having gearing of 0.98 times and capital adequacy of 62.65%.

The Board of Directors has also contemplated on setting up an Alternate Investment Fund (AIF) to provide complete financial solution for hospitality sector. Considering the business environment and current domestic & global cues, the Board of Directors has approved Business Plan for your Company to ensure sustained growth with optimum utilization of the resources, achieve hospitality product viz. affordable/middle income housing, social infra, manufacturing & NBFC/HFC sectors. Your Company intends to grow loan book in hospitality sector by financing budget/midscale/upscale hotels in Tier-I/II/III cities as also leisure destinations by cautiously pursuing emerging opportunities through leveraging its capital to result in improved return on equity/shareholders value over mid-to-long term.

3.1 Asset Quality:

The paramount importance of your Company is to maintain a high-asset quality portfolio to ensure stability, profitability, and overall success of the business. Your Company understands the significance of implementing robust asset quality control policies to safeguard against potential risks and mitigate the impact of economic uncertainties. Your Company has been following stringent appraisal cum proactive monitoring framework and adheres to the prudential norms for stressed assets

diversification by exploring the lending opportunities for setting-up of green field projects, last-mile funding for under-implementation projects, takeover/refinancing/ upgradation requirements of operational projects, corporate finance to entities engaged in tourism-related activities and structured finance/acquisition finance & ARC exit for cases facing bunching of repayments but having stable future cash-flows. Besides, with a view to gradually diversify the portfolio in other resilient/ strong-performing sectors, TFCI would continue to seek lending opportunities in residential real-estate sector

prescribed by the regulatory authority. During the year, the asset quality was largely contained through an efficient monitoring-cum-collection mechanism and on account of timely financial assistance given to existing borrowers under Government guarantee schemes for MSME/Tourism sectors. As on 31^st March 2023, your company had two borrower accounts in non-performing asset category with principal outstanding of 63.62 crore, against which ECL of 15.78 crore has been provided in the books. Accordingly, as on 31^st March 2023, your Company had Gross NPA and Net NPA at 3.92% and

2.95% of total loans respectively. We are pleased to inform that settlement proposal of one NPA account has already been approved and outstanding principal amount alongwith interest is expected to be received in full by September 30, 2023.

4. Contribution to Tourism and Infrastructure Sector

With over 34 years of dedicated service, your Company stands as a specialized institution committed to funding tourism projects in the country. Throughout its existence, your Company has successfully fulfilled its primary objective of catalyzing investments in the tourism sector. It has also played a vital role in the development of high-quality tourism infrastructure and has contributed significantly to employment generation through the growth of the tourism sector. Since inception, your Company has been instrumental in creating and adding approximately 52,000 star-category hotel rooms to the nations hospitality landscape. This represents an impressive 26% of the total supply of star-category hotel rooms in the country. Your Companys involvement in the expansion of the hotel industry has contributed to the overall enhancement of the tourism sector, enabling it to thrive and attract more visitors. TFCI also provides advisory services in the tourism sector. Besides the primary focus of providing finance and advisory services to tourism sector, your Company through its financial products, in recent times has also acted as catalyst in development and expansion of social infrastructure, residential real estate in affordable & middle income segment, manufacturing sector and ease of availability of credit through NBFCs in India.

5. Dividend

The Board of Directors has recommended dividend of 2.40 per Equity Share of face value 10.00 (i.e. @ 24% on the paid-up Equity Share Capital) for the financial year ended 31^st March, 2023, subject to approval of the shareholders at the ensuing Annual General Meeting.

The dividend will be paid to those members whose names appear in the Register of Members in respect of shares in physical form after giving effect to all valid transfer/ transmission lodged with Registrar & Transfer Agent/ Company on or before August 11, 2023. The dividend will be paid on the basis of beneficial ownership as per details 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 August 11, 2023 in respect of shares held in dematerialized form. The Dividend Distribution Policy of the Company can be accessed on the website of the Company at the link: https://www.tfciltd.com/investors-disclosures#Policies

6. Resource Mobilization

Your Company places great emphasis on constantly monitoring the resource base to optimize the funding strategy. Your Company constantly monitors its resource base and taps appropriate opportunity to raise funds

through diversified sources to improve the weighted average cost of funds. During the year, your Company met its fund requirements for disbursement out of borrowings and out of internal accruals. During the year, your Company raised term loans from scheduled banks/ institutions aggregating 300 crore at WAIR of 9.35% p.a. with tenure upto five years and redeemed bonds/ debentures aggregating 256.50 crore. The total term borrowings stood at 1004.73 crore as on 31^st March 2023 as against 1278.74 crore as on 31^st March 2022. Your company will approach banks/institutions for financial assistance to meet its future requirement of resources. Further, your Company may raise funds through issue of long-term bonds/debentures depending upon the interest rate scenario in the market. Your Company is confident of meeting the funds requirements by raising resources at competitive rates.

Further, your Company has not invited any deposit from the public under Section 73 and 74 of the Companies Act, 2013 during the year under review. There was no public deposit outstanding as at the beginning or end of the year ended on 31^st March 2023. The paid-up share capital of the Company stood at 90.37 crore consisting of 9,03,72,448 equity shares of face value of 10 each and there was no change in share capital during the FY 2022-23. Your Company remains committed to prudent financial management and will continue to evaluate and pursue opportunities for capital optimization in line with long-term objectives of the Company and market conditions.

7. Regulatory Compliances

Your Company has been classified as Systemically Important Non-Deposit Accepting Non-Banking Financial Company. RBI has been issuing guidelines from time to time with regard to capital adequacy standards, income recognition, asset classification, provisioning and other related matters. The accounting policies of your Company conform to these guidelines. The capital adequacy of your Company stood at 62.65% as on 31^st March 2023 as against regulatory norm of 15%.

8. Managements Discussion and Analysis Report

Managements Discussion and Analysis report containing Industry outlook, its environment, outlook for tourism and other details as stipulated in the SEBI (LODR) Regulations is presented in a separate section forming part of the Directors Report.

9. Directors and Key Managerial Personnel

During the year, the Board of Directors appointed Dr. S. Ravi as Non-Executive Non-Independent Director liable to retire by rotation with effect from April 4, 2022 and Shri Anoop Bali as Whole Time Director with effect from April 18, 2022 for a period of 3 years and the Shareholders approved both the resolutions through postal ballot on June 28, 2022. Shri Anirban Chakraborty retired on April 14, 2022 on completion of his tenure as

MD & CEO.

Additionally, the Board of Directors appointed Shri Ghanshyam Das Mundra as Non-Executive NonIndependent Director liable to retire by rotation with effect from August 10, 2022 and the Shareholders also approved his appointment in Annual General Meeting held on September 19, 2022.

Furthermore, Shri Bapi Munshi was reappointed as Independent Director for second term of three years with effect from February 1, 2023 and Shri Rajesh Kumar Dubey was appointed as Non-Executive Non-Independent Director (representing LIC of India) liable to retire by rotation with effect from February 14, 2023 by the Board of Directors and the Shareholders has subsequently approved both the resolutions through postal ballot on April 28, 2023.

Shri R.K. Sood resigned as Non-Executive Director from the Board of the Company vide his letter dated November 3, 2022 and Shri S.C. Sekhar has retired on February 28, 2023 on completion of his tenure as an Independent Director of the Company. The Board places on record its appreciation for the valuable contributions made by the outgoing directors viz. Shri Anirban Chakraborty, Shri R.K. Sood and Shri S.C. Sekhar during their tenure.

Further, Board of Directors at its meeting held on May 20, 2023 approved the appointment of Shri Ashok Kumar Garg as Independent Director of the Company for a period of five years subject to approval of shareholders. Shri Rajesh Kumar Dubey resigned as Non-Executive Director from the Board of the Company vide his letter dated June 23, 2023 and the Board places on record its appreciation for the contributions made by Shri Rajesh Kumar Dubey. Additionally, the Board of Directors at its meeting held on July 7, 2023 approved the reappointment of Mrs. Thankom T. Mathew as Independent Director of the Company for the second term of five years with effect from October 24, 2023 subject to approval of shareholders at the forthcoming Annual General Meeting.

According to the provisions of the Companies Act read with Article 135 of the Articles of Association of the Company, Dr. S.Ravi would retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends appointment/re-appointment of Dr. S.Ravi as Non-Executive Non-Independent Director and Shri Ashok Kumar Garg and Mrs. Thankom T. Mathew as Independent Director(s). The resolutions seeking shareholders approval for their appointment/ reappointment forms part of the notice.

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act alongwith Rules framed thereunder, Regulation 16(1)(b) of SEBI (LODR) Regulations and have complied with the Code of Conduct

of the Company as applicable to the directors. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

9.1 Performance Evaluation of the Board

In accordance with the Companies Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, your company has conducted the annual evaluation process of the Directors, including the Chairman, Board, and its Committees. The company has devised a comprehensive process and criteria for assessing the performance of the Directors, which have been recommended by the Nomination & Remuneration Committee and subsequently approved by the Board of Directors.

The Board assessed its performance by soliciting input from all Directors, considering factors such as attendance, participation, contribution, responsibility towards stakeholders, adherence to their duties with care, skill, and diligence and the exercise of independent judgment. The Committee of independent Directors evaluated the performance of Non-Independent Directors, including the Chairman and Whole time Director. Similarly, the Non-Independent Directors evaluated the performance of Independent Directors. Based on the performance evaluation report, decisions were made regarding the extension or continuation of the appointment/ reappointment of Independent and other Directors. The Board has demonstrated strategic leadership skills by actively participating in the development and implementation of the long-term vision of your Company. They have ability to identify new growth opportunities and decision making abilities. They have diligently fulfilled their fiduciary responsibilities, ensuring that the company operates within legal and regulatory frameworks. Their commitment to transparency, integrity, and ethical conduct has been unwavering, setting a strong example for all stakeholders.

9.2 Director Orientation Program

The Directors are regularly provided with information regarding the business models, the dynamic nature of the industry, as well as the roles, responsibilities, and liabilities of Independent directors. Ongoing updates concerning business, legal matters and the industry are made available to the Independent Directors, with a particular focus on the members of the Audit Committee. These updates are sourced from internal teams, external consultants, statutory auditors and internal auditors to ensure that the Independent Directors are well-informed about the latest developments in these areas.

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the

industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link:https://www.tfciltd. com/investors-disclosures#Policies.

9.3 Details of Board meetings

During the year, six (6) Board Meetings were held on April 4, 2022; May 19, 2022; August 10, 2022; October 14, 2022; November 11, 2022; and February 10, 2023. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. The details about the meetings of Audit Committee and other Committees are provided in the report on Corporate Governance which forms part of this Directors Report.

9.4 Appointments/Resignations of the Key Managerial Personnel

Shri Anirban Chakraborty retired as MD & CEO of the Company on April 14, 2022, on completion of his tenure and Shri Anoop Bali was appointed as Whole-Time Director with effect from April 18, 2022 for a period of 3 years. As such, during 2022-23, Shri Anoop Bali, Whole Time Director & Chief Financial Officer and Shri Sanjay Ahuja, Company Secretary were the Key Managerial personnel as per the provisions of the Companies Act, 2013.

9.5 Companys policy on appointment and remuneration

Your Company has constituted Nomination and Remuneration Committee of Directors and the Nomination and Remuneration Policy of your Company has been formulated in compliance of new guidelines and rules. The Nomination and Remuneration Committee undertakes a process of due diligence based on the criteria of qualifications, technical expertise, track 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 an internal supervisory process on a continuing basis and to determine the suitability of the person for appointment / continuing to hold appointment as a Director on the Board of the Company. The Nomination and Remuneration Policy may be accessed on the Companys website at the link: https://www.tfciltd.com/investors-disclosures#Policies and brief details are given below:

Remuneration Policy

Board Level Remuneration Structure

(a) For Managing Director/Whole-Time Director

Remuneration, including performance-linked incentives, is paid in accordance with the approvals obtained, as and when required, from the Board and Shareholders, as applicable. The remuneration is determined considering the provisions of the Companies Act, 2013, and any other relevant Acts, Rules, and Regulations in force at that time.

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

During FY 2022-23 the Non-Executive Directors were paid sitting fee of 75,000 and 50,000 (plus tax) per meeting for attending the meetings of Board and its Committees respectively. However, Mr. Koppara Sajeeve Thomas, Non-Executive director representing promoter group is not drawing any sitting fee from the Company.

(c) In case of Key Managerial Personnel and other Employees

The remuneration structure, allowances, facilities, and other benefits provided to the Key Managerial Personnel and regular employees are based on the Cost-To-Company salary structure. This structure is approved by the Board and its Nomination and Remuneration Committee and it aligns with the prevailing salary structures in similar organizations. Additionally, the Performance Linked Incentive for Key Managerial Personnel and other regular employees is implemented in accordance with a scheme approved by the Board. The Company has ESOP policy for its middle/senior level employees.

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 of the Companies Act, 2013 and the guidelines issued by SEBI/RBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires 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 had been followed along with proper explanation relating to material departures;

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

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively.

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

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

In compliance with the directives of the Securities and Exchange Board of India (SEBI), it is mandatory for the Companys shares to be transacted in dematerialized form. To facilitate this, your Company has established agreements with National Securities Depository Ltd. and Central Depository Services (India) Ltd. This enables shareholders to hold and trade their shares in electronic form. Shareholders who currently hold shares in physical form are kindly requested to convert their holdings into dematerialized form. Additionally, shareholders are encouraged to make use of the nomination facility available by submitting the duly filled form prescribed to the Registrar and Share Transfer Agent, MCS Share Transfer Agent Limited.

The equity shares of your Company are listed on the BSE Ltd. and the National Stock Exchange of India Ltd. For the financial year 2022-23 and 2023-24, the Company has duly paid the Annual Listing Fees to these Stock Exchanges. The addresses of the respective Stock Exchanges can be found in other sections of the Annual Report.

12. Auditors

Pursuant to the provision of Section 139(1) of the Companies Act 2013 and the rules made thereunder and RBI requirements, the members on the recommendation of the Board/Audit Committee at the 32^nd AGM held on September 29, 2021 had appointed M/s M. Verma & Associates, Chartered Accountants (Firm Registration No. 501433C) as Statutory Auditors of the Company for a period of three years effective from the financial year 2021-22 till the conclusion of Annual General Meeting of financial year 2023-24 at an audit fee of 7.50 lakh plus applicable tax.

12.1 Auditors Report

The Auditors Report, including the accompanying notes to the accounts, is self-explanatory and does not contain any qualifications. The report provides a comprehensive explanation of the financial statements and their disclosures. Additionally, the Company is not obligated to maintain cost records under Section 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 Company. The report of the Secretarial Auditors is enclosed as Annexure 3 to this report. The report is self-explanatory and do not call for any further comments. The certificate regarding non-disqualification of directors in also enclosed as Annexure 3B. Your Company complies with all applicable mandatory Secretarial Standards issued by The Institute of Company Secretaries of India.

13. Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Report as Annexure 2.

The ratio of the remuneration of each director to the median employees remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 2.

13.1 Committee on Sexual Harassment

Your company has zero tolerance for sexual harassment of women at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder and the policy may be accessed on the Companys website at the link: https://www.tfciltd.com/investors- disclosures#Policies. Internal Complaints Committee has been set up to address any complaints received related to sexual harassment. No Complaint has been received in this regard during the FY 2022-23.

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

As your companys operations do not involve manufacturing or processing activities, the disclosure of particulars relating to energy conservation and technology absorption, as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is not applicable. Your Company has adopted an ESG policy and is following the same towards energy conservation and focussing on energy, water and waste management in operations and also in

the assisted companies in hospitality and other sectors. On the social front, our emphasis is on the development of people, especially in skill development, improving diversity, inclusion and supporting communities in healthcare, education and eradication of hunger. It is worth noting that during the process of reviewing proposals for financial assistance, due consideration is given to the aspect of energy and water conservation. This highlights the companys commitment to promoting energy/water efficiency and sustainable practices, even though it may not be directly involved in manufacturing or processing. The ESG policy may be accessed on the Companys website at the link: https://www.tfciltd.com/ investors-disclosures#Policies.

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 complied with the provision of the Companies Act, 2013 by transferring unclaimed/unpaid dividend and shares to Investor Education Protection Fund (IEPF) upto and including Interim Dividend for Financial Year 2015-16.

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 of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e September 19, 2022), 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 for implementation in Compliance with the provision of Section 135 of the Companies Act 2013 and Rules made thereunder.The Corporate Social Responsibility Policy (CSR Policy) may be accessed on the Companys website at the link: https://www.tfciltd.com/investors- disclosures#Policies.

The CSR policy has been approved with a philosophy:-

• To implement CSR initiatives in conformity with the provisions of Companies Act, 2013 and applicable rules made thereunder.

• To support activities which help cleaner, greener and healthier environment and thereby enhancing TFCIs perception as a social responsible entity.

Your Company during the year 2022-23 has spent 203.47 lakh towards CSR initiatives/activities as per detailed report attached as Annexure 1 and brief details on sector wise programme undertaken are as under:

Skill Development Programmes in House Keeping, Food & Beverages preparation, Front Office, Driving Vehicle for 130 marginalised and underprivileged youth were organised in Bhubaneshwar and Chandigarh. These programmes enable them to acquire employable skills and improve their livelihoods and would contribute to the hospitality sector.

• Sports Training Programme for five national level athletes belonging to economically unprivileged background by supporting to NGO founded by eminent international athlete, Dr. Sunita Godara (1992 Asian Marathon Gold medallist).

• Education Programme for about 4,000 destitute and vulnerable children across the Country to help them attain grade level competencies, continue and complete schooling. Recognizing the importance of education, this initiative positively impacted in helping them access quality education and improving their prospects for a better future.

17. Corporate Governance and other disclosures

Your Directors reaffirm their unwavering commitment to upholding good corporate governance practices and endorse the principles of corporate governance as outlined in the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Your company has diligently adhered to all the mandatory requirements specified under these regulations. The report on Corporate Governance provides detailed information on the corporate governance framework and practices followed by your company. It encompasses aspects such as the composition and functioning of the Board of Directors, committees, related-party transactions, risk management, and other relevant governance policies and processes. To further ensure compliance with the conditions of corporate governance as stipulated under the SEBI (LODR) Regulations, a certificate has been obtained from M/s Naveen Narang & Associates, Practicing Company Secretary. This certificate, attached as Annexure 3C, confirms the companys adherence to the prescribed corporate governance norms and provides independent verification of the companys commitment to maintaining high standards of governance.

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 the employees are free to report violations of applicable laws and regulations and the Code of Conduct. The reportable matters may be disclosed to the Audit Committee. Employees may also report directly to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee. The policy on vigil mechanism and Whistle Blower policy may be accessed on the Companys website at the link: https://www. tfciltd.com/investors-disclosures#Policies

17.2 Related party transactions

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis.

There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company during the year. Your Directors draw attention of the members to Note 40 to the financial statement which sets out related party disclosures.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Audit Committee and the Board may be accessed on the Companys

website at the link: https://www.tfciltd.com/ investors-disclosures#Policies

17.3 Annual Return

The Annual Return of the Company as on March 31, 2023 is available on the Companys website and can be accessed at the link: https://www. tfciltd.com/investors-disclosures#Policies.

17.4 Statement containing salient features of financial statements of subsidiaries

During the year under review, TFCI Capital Limited (Subsidiary Company), which did not carry any business filed an application with ROC for striking off/removal of the name, which was approved on 23.3.2023. Since the Company has no other subsidiary/associate company at the end of financial year, the consolidation of accounts & results are not applicable.

17.5 Documents placed on the Website

In compliance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, the Company has established a functional website. The website serves as a platform for the Company to provide various policies, documents, and details as required by the regulations. The Company recognizes the importance of providing relevant and up-to-date information to its stakeholders through its website. This practice aligns with regulatory requirements and promotes effective communication and transparency in line with good corporate governance practices.

17.6 Risk Management Policy

The Company has formulated and implemented the Risk Management policy and Asset Liability Management (ALM) Policy and the Risk Management Committee of the Board reviews the same periodically. Your Company has also constituted ALM Committee (ALCO) and Risk Management Committee for reviewing/ implementing ALM policies and for managing the liquidity risk as well as interest-rate and other risks. ALCO meets every month and reviews the cash flows as well as the prevailing interest rate scenario, its likely impact on the profitability and 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 as deciding business strategies of TFCI in line with the overall budget and risk management policy. The Company adopts a proactive approach to manage, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its planned objectives. The Companys management systems, structures, processes, standards, code of conduct and behaviours

together form the System that governs how it conducts the business of the Company and manages associated risks. The Company strives to enhance its resilience and maintain a sound financial position, while effectively addressing potential risks and uncertainties that may impact its operations and objectives.

17.7 Significant and material orders passed by the regulators

During the year under review, no significant and/ or material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys operations. Your Company is registered with RBI as NBFC-ND-SI and not registered with any other financial sector regulators. No adverse order or penalties were levied during FY2022-23 by any of the regulators.

17.8 Internal financial controls

The Company has established a robust framework of standards, processes and structure which enable to implement internal control system and ensure that same are adequate and operating effectively commensurate with the size, scale and operations, of its business operation. To maintain objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

Internal Auditor plays a crucial role in monitoring and evaluating the efficacy and adequacy of internal control systems in the company, its compliance with the operating systems, accounting procedures and policies at all locations of companys operation. Internal Audit Report stimulates other functional departments to improve their systems and procedures to strengthen the controls. All these issues are regularly placed before the Audit Committee meeting for its deliberations and monitoring.

17.9 Particulars of Loans given, Investments made, Guarantees given and Securities provided

Your Company is a specialised financial institution registered as Non-Banking Finance Company (NBFC-ND-SI) with RBI. It provides financial assistance by way of loans/investment for projects in tourism, social infrastructure (educational institutions, hospitals, etc.) manufacturing, residential real-estate, NBFC, HFC for onward lending and other resilient sectors in the ordinary course of business. The detailed particulars may be referred to in the financial statements.

17.10 Segment Reporting

Accounting Standard 17 regarding segment-wise reporting does not apply to your Company since revenues are primarily derived from only one

segment i.e. financing of projects 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 the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2023 and the date of the Directors report i.e. July 7, 2023. Considering the business environment emerging after Covid pandemic and current global cues, the Board of Directors has approved Business Plan for your Company to ensure sustained growth with optimum utilization of the resources, achieve product diversification by exploring the lending opportunities across core hospitality segment, wholesale segment comprising social Infrastructure, manufacturing, real-estate & other resilient sectors and initiate focussed retail lending. The Company intends to grow its balance sheet size by cautiously pursuing emerging opportunities through leveraging its capital to result in improved return on equity/ shareholders value over mid-to-long term.

18. Acknowledgements

The Board expresses and places on record their sincere gratitude for the unwavering support provided by the promoters and shareholders. The Board acknowledges the trust and confidence placed in the Company, which has been instrumental in its success. The Board also extends their heartfelt appreciation to the Companys esteemed customers, as well as its bankers, financial institutions, and investors, for their continued patronage. Their support has been crucial in the Companys growth and achievements. The Board recognizes and values the guidance and cooperation extended by various government entities and regulatory authorities. Ministry of Finance, Ministry of Tourism, Ministry of Corporate Affairs, Reserve Bank of India, Securities & Exchange Board of India, Registrar of Companies, Stock Exchanges, Depositories and other government and regulatory authorities have played a vital role in the Companys operations.

The Board acknowledges the significant contributions made by the dedicated employees of the Company. Their collective efforts and unwavering commitment have been pivotal in driving the sustained growth and performance of the Company. The Board sincerely appreciates the collective efforts of all stakeholders, including shareholders, customers, financial partners, regulatory authorities and employees, whose support and collaboration have been instrumental in the Companys achievements and success.

	For and on behalf of the Board of Directors
Date: July 7, 2023	Dr. S.Ravi	Anoop Bali
Place: New Delhi	(Chairman)	(Whole Time Director & CFO)