DIRECTORS' REPORT To the Members: 1. Presentation of the Annual Report Your Directors have pleasure in presenting the Twenty Fifth Annual Report on the business and operations of the Company and the audited accounts for the financial year 2013-14. 3. Operational Performance The operational performance of your Company has improved over the previous year, despite difficult business environment. The project related sanctions registered a growth of 85.62% in the year 2013-14 over the previous year. The Company had sanctioned loan assistance aggregating to Rs.680.86 Crore as compared to Rs.366.80 Crore in the corresponding period of the previous financial year. The project related disbursement registered a growth of 23.81% over the previous year. TFCI had disbursed Rs.354.63 Crore as compared to the previous year figure of Rs.286.43 Crore. Your Company has achieved a modest growth of 5.35% in Net Profit After Tax (PAT) over the corresponding previous year figure. Due to slowdown in economic activities, the Company deliberately decided not to extend financial assistance to projects with weak fundamentals which might ultimately result in higher delinquencies. Accordingly, more emphasis was laid on consolidation & strengthening of monitoring mechanism to prevent slippages which helped in improving the bottom line,at a time, when most of the NBFCs were facing severe stress on their financials. However, the company has maintained a healthy growth in income from operations as well as in the profitability due to better recovery rate. 3.1. New Initiatives In view of the prevailing challenging environment, TFCI decided to explore and exploit possibilities for diversification and expansion into adjacent and parallel financial areas to ensure continuous growth in business and financial parameters. TFCI is approaching its erstwhile good customers who may have financial requirements for renovation, modernization or expansion. TFCI is exploring corporates with satisfactory financial background for short-term loans to enable quick disbursements. Your Company, during the last few years has been pursuing to expand its portfolio by not only extending financial assistance to new hospitality projects for renovation, upgradation but also has been actively pursuing consultancy assignments for various state governments by drafting tourism policy, other project advisory services for tourism destination/ circuit development etc. 3.2 Contribution to Tourism and Infrastructure Sector by TFCI The assistance provided by your company since its inception has catalyzed the addition of 44174 rooms and provided direct employment to about 83749 persons in tourism industry. The assistance provided by your Company has also led to catalysing investments to the tune of Rs.24581 Crore in the tourism sector thereby contributing to the creation of required tourism infrastructure, which has direct bearing on the development of industry. 3.3. Non-Performing Assets Your Company adhered to the prudential norms for Non-Performing Assets(NPAs) prescribed by the regulatory authority. During the year 2013-14, your Company has been able to contain slippage in its loan portfolio by taking proactive steps and regular follow up with borrowers. However, despite vigorous follow up, one account has slipped from standard to substandard category and recognized as NPA as on March 31, 2014. Your Company hope to realise the entire overdues alongwith further interest/principal during the year. TFCI has adequate provisions in the books of accounts. During the year, amount aggregating Rs.18.22 Crore was recovered from NPA/written off cases and recognized as income. The Net NPAs of the company were NIL as on March 31, 2014. 4. Dividend Your Directors have recommended a dividend of Rs.1.20 per Equity Share i.e. @ 12% on the paid-up Equity Share Capital for the financial year ended March 31, 2014 which will be paid after approval at the ensuing Annual General Meeting. The aggregate payout due to payment of dividend, if approved, will be Rs.11.33 Crore inclusive of dividend tax of Rs.1.64 Crore. The dividend will be paid to those members holding shares in physical form, whose names appear in the Register of Members as on September 22, 2014 and in respect of shares held in dematerialized form, 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 on September 15, 2014. 5. Resource Mobilization Your Company constantly monitors its resource base and taps the appropriate source in its endeavor to minimize the weighted average cost of funds. During the year, your Company met its fund requirements for disbursement as well as repayment/redemption of loans/ bonds by way of financial assistance from banks and internal accruals. Your Company redeemed high interest bearing bonds aggregating Rs.102.08 crore during 2013-14 and availed term loan of Rs.100 crore from a bank. Public deposit The Company has not invited any deposit from the public under Section 58A of the Companies Act, 1956 during the year under review. There was no public deposit outstanding as at the beginning or end of the year ended on March 31, 2014. 6. RBI Guidelines Your Company has been classified as 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 for your Company stands at a very comfortable level of 39.86% as on the March 31, 2014 as against the prescribed norm of 15%. 7. Management's Discussion and Analysis Report Management's Discussion and Analysis report containing Industry outlook, its environment, outlook for tourism and other details as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report. 8. Directors During the year under report, Shri S.K. Ganguli retired by rotation in the last Annual General Meeting. Shri S. Ravi was appointed as an additional director on November 6, 2013. Shri S.B. Nayar, Chairman of the Board resigned vide his letter dated December 11, 2013 and Shri Malay Mukherjee was appointed as an additional director and Chairman of the Board w.e.f January 3, 2014. Smt. Shashi Sharma resigned as Director/Managing Director vide her letter dated April 3, 2014. The Board of Directors in its meeting held on April 9, 2014, accepted her resignation and appointed Shri Satpal Arora as an additional director and Managing Director of the Company consequent to resignation of Smt. Shashi Sharma. Shri S. Sridhar has been appointed as an additional director in the independent director category in their meeting held on May 27, 2014 for a period of 3 years subject to approval in the ensuing Annual General Meeting. Shri Satpal Arora has resigned as Director/Managing Director w.e.f. August 7, 2014 and the Board of Directors has appointed Shri Surender Kumar Sangar as an additional director and Managing Director for a period of 3 years w.e.f. August 7, 2014 or till he attains the age of 60 years whichever is earlier. The Board appreciates the contribution made by the outgoing directors during their tenure. In terms of the provisions of the Companies Act read with Article 135 of the Articles of Association of the Company, Shri Niraj Agarwal would retire at the forthcoming Annual General Meeting. The Board recommends the re-appointment of Shri Niraj Agarwal in the forthcoming Annual General Meeting. Your company proposes to amend Article 123 of the Articles of Association in view of the new Companies Act, 2013 and corporate governance practices. 9. Directors' Responsibility Statement In compliance of Section 217(2AA) of the Companies Act, 1956, your Directors confirm: (i) That in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with the requirements set out under Schedule VI of the Companies Act, 1956 have been followed and there are no material departures from the same; (ii) That they 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 as at March 31, 2014 and of the profit of the Company for the year ended on that date; (iii) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) That they had prepared the annual accounts on a 'going-concern' basis. 10. De-materialization of Shares and nomination facility and listing at Stock Exchanges As per the Securities and Exchange Board of India (SEBI) directives, the transactions of the Company's shares must be compulsorily in dematerialized form. Your Company had entered into agreements with National Securities Depository Ltd. and Central Depository Services (India) Ltd. to facilitate holding and trading of shares in electronic form. Shareholders holding shares in physical form are requested to convert their holding into dematerialized form. Shareholders may utilize the nomination facility available by sending duly filled prescribed Form No. 2B to our Registrar and Share Transfer Agent, 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 Annual Listing Fees to said Stock Exchanges for the financial year 2013-14 and 2014-15. The addresses of the said Stock Exchanges are stated elsewhere in the Annual Report. 11. Auditors M/s V.C.Gautam & Co., Chartered Accountants (Registration No 000365N) has been appointed by the Comptroller & Auditor General of India (C&AG) as Statutory Auditors of Your Company for FY 2014-15. 12. Auditors' Report The Auditors' Report along with the Notes on Accounts referred to in the Auditors' Report is self-explanatory and does not call for any further comments or explanation. 13. Particulars of Employees In terms of the provisions of the Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, we hereby confirm that there is no employee in respect of which information is required to be furnished. 14. Energy Conservation, Technology Absorption and Foreign Exchange Earning and outgo The particulars relating to energy conservation and technology absorption, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is not required as your Company's operations do not involve in manufacturing or processing activities. However, while vetting the proposals received for sanction of financial assistance, the aspect of energy conservation, in case of assisted concerns, is given due consideration. The particulars regarding Foreign Exchange earnings and outgo are as follows: i) Total foreign exchange outgo : Nil ii) Total foreign exchange earnings : Nil 15. Transfer of amount to Investor Education and Protection Fund Pursuant to the provisions of Section 205A of the Companies Act, 1956, your Company has transferred unclaimed/unpaid dividend to the Investor Education and Protection Fund. 16. Segment Reporting Accounting Standard 17 regarding Segment-wise Reporting does not apply to your Company since revenues are primarily derived from only one segment, financing. 17. Corporate Governance Your Directors reaffirm their continued commitment to good corporate governance practices and endorse Corporate Governance practice in accordance with the provisions of Clause 49 of the Listing Agreement. Your company has complied with all the mandatory requirements of the said clause. The Report on the Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this report. 18. Corporate Social Responsibility Ministry of Corporate Affairs has notified Section 135 and Schedule VII of Companies Act 2013 along with the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014 onwards. Your Company has constituted CSR Committee of Directors and the CSR Policy of your Company for the year 2014-15 is being formulated for implementation for compliance of new guidelines and rules. 19. Declaration The Board has formulated a code of conduct for the Board members and senior management of the Company. All Board members and senior management personnel have affirmed their compliance with the code. 20. Acknowledgements The Board expresses and places on record their gratitude for the consistent support and guidance given by the promoter institutions namely IFCI Ltd., LIC, SBI and others Banks. Your Directors wish to place on record their sincere gratitude to valued customers, bankers and members for their continued patronage. The Board also acknowledges and appreciates the guidance and co-operation extended by the Ministry of Finance, Ministry of Tourism, Government of India, and Reserve Bank of India, Securities & Exchange Board of India, Stock Exchanges and Depositories. The Board also appreciates and acknowledges the contribution made by the employees whose concerted efforts and dedicated services contributed to sustained growth and performance of the Company. For and on behalf of the Board of Directors V.P. Singh Surender (Director) Kumar Sangar (Managing Director) Date: August 7, 2014 Place: New Delhi. |