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Chairman Statement

Chairman’s Statement 2017-18

Dear Shareholders,

I am indeed privileged to welcome you all in the 29th AGM of the Company. I hope you have since received the 29th Annual Report on the business and operations of company alongwith Audited Accounts for the financial year ended 31st March, 2018 and with your permission I shall take them as read. Your company has continued to play its role as catalyst for investment in tourism sector and closed another year 2017-18, with good operational results. I have pleasure in sharing with you some of the highlights of your Company’s performance in the backdrop of prevailing economic environment and future outlook for tourism sector as well as your Company.

Operating Environment

India has emerged as one of the fastest growing economy of the world and recorded growth of 6.7% during the financial year 2017-18 despite aggressively pursuing its reform agenda which caused temporary disruption. Travel and Tourism has evolved as one of the key enablers of socio economic growth as it promotes engagement and collaboration of different stake holders including tourists, businesses, service providers, community and Govt. across the tourism value chain. In India travel and tourism contributes about 9% of the total GDP and provides direct and indirect employment to 71% of the total jobs in the country. The year 2017, had been a watershed year in the history of Indian tourism as foreign tourist arrivals for the first time crossed 10 million mark, recording growth of 16.5% over that of year 2016. As per the World Travel & Tourism Council estimates, India is on a high growth trajectory and is expected to grow by estimated CAGR 7.1% in terms of GDP contribution over the next decade.

Performance Highlights

TFCI has been acknowledged as the major contributor for growth of tourism infrastructure particularly accommodation infrastructure in the past 29 years. The assistance provided by TFCI has contributed the creation of 50350 rooms in approved category hotels as against the estimated total supply of approximately 1,60,000 rooms. The assistance provided by TFCI has catalysed investment to the tune of Rs. 30182 Cr. in 863 projects. TFCI has recorded another successful year of its operational performance, despite the adverse market conditions, for the last 4-5 years. Your Company has recorded Gross Operating Profit aggregating Rs. 108.84 Cr as against Rs. 97.02 Cr. during the previous year. The size of the balance sheet has increased from Rs. 1700 Cr. to 2007 Cr. It is heartening to note that the Company has Gross NPA of 1.63% the total assets and negligible Net NPA as on 31st March, 2018, despite stress recorded all over in the entire banking system. TFCI has been truly playing the role of developmental institution in tourism sector by providing finance for Greenfield Projects which gets refinanced by other lenders on completion and stabilisation of operations resulting into high level of portfolio churning for your corporation.


The Board of Directors have recommended dividend of Rs.2.00 per Equity Share i.e. @ 20% on the paid-up Equity Share Capital for the financial year ended March 31, 2018. The total payout on account of payment of dividend will be Rs.16.14 Crore excluding dividend tax of Rs.3.28 Crore subject to approval by the shareholders.

Future Outlook

India with its vast geographical and cultural diversity is emerging hotspots for global tourists as it offers vide range of tourist’s attractions from the Himalayas to Oceans. It is home to 65 world heritage sites besides numerous natural heritages. Its cultural diversity alognwith varied culinary habits provides major attraction to the tourists. The Govt. of India, has taken various initiatives to promote tourism, as it is not only an important source of earning foreign exchange but also has a capacity to generate large scale employment opportunities of diverse kind from the most specialised to unskilled job which can play a significant role in achieving growth with equity.

The Govt. of India has been constantly making efforts in creating tourism infrastructure and particularly relating to the areas of connectivity. A multi fold approach has been adopted for development of integrated tourist circuit under the Swadesh Darshan and PRASAD Schemes besides creation of 5 Special Tourists’ Zone. The Govt. has identified 26 islands to be developed as Tourism Growth Zones through Island Development Agency. A specialised “Hospitality Development and Promotion Board” has been constituted to monitor and facilitate the clearances for hotel projects. The Ministry of Civil Aviation has supported the growth of tourism by developing un-utilised airfields and using them as regional connectivity centres. Under Udan Scheme, subsidised ticketing has been provided to encourage regional airlines to operate on less remunerative routes under hubs and spoke model. In order to connect the inaccessible natural heritage sites; Ministry of Civil Aviation is encouraging Seaplanes operations for tourists with Helicopter Services. The Ministry of Railways plans to introduce dedicated trains for domestic and international tourists besides launching Astha Circuit tourist trains to promote religious tourism in the country. The Govt. is also trying to create various seaports for hassle free entry and exit of cruise passengers through the Sagarmala Project. The National Highways are being developed as expressways with amenities for the tourists. In totality the basic infrastructure for growth of tourism in the country is being augmented at various levels. It is likely to open many new sites for tourism which were earlier difficult to explore due to logistic constraints and provide additional opportunities for enterprises to put up investment in accommodation sector.

It is heartening to note that the excess supply created in major metropolitan cities by years 2012-13 have since been absorbed by way of growth of tourists. All the major markets have recorded uptrend in occupancy levels -Average 68% occupancy level – thereby necessitating the need for additional capacity creation. However, the average revenue realisation has not yet increased to the desired level. It is expected that with the start of busy season in major markets, there would be upward revision of room rates which will create environment for further investment in the sector. Further, there is over cautiousness in the banking system in the last 5-6 months which is likely to create more opportunities for the NBFCs and your company is well poised to avail this opportunity. The interest rate scenario is also moving positively to help your Company in achieving better results. In this background, your company is expected to even perform better as compared to previous years.

Changes in Equity Holdings

As informed earlier, IFCI, the major shareholder and main promoter of TFCI has divested their equity in TFCI on 30th September, 2017. M/s Redkite Capital Pvt. Ltd. alongwith Person Acting in Concert (PAC) namely Shri Koppara Sajeeve Thomas, India Opportunities III Pte. Limited and others had acquired approx. 21% shares in TFCI. The acquirer alongwith PACs have filed the draft letter of offer with SEBI proposing to acquire upto 26% of the voting share capital of the Company under the open offer. Accordingly after acquiring the additional equity and subject to approval by RBI, the acquirer shall become the promoter of the Company and will have management control. The Company shall continue to be managed by the Board of Directors, which shall have representatives of acquirer alongwith PACs. The Board had considered and approved the proposal for submitting application with RBI regarding intention to change control subject to necessary approvals. The Company is presently managed effectively by the Board of Directors in association with the top management.


Your Company constantly monitors its resource base and taps the appropriate opportunity 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, internal accruals and raising of Commercial Papers. TFCI has tied up with various banks for financial assistance to meet its future requirement of resources. Further, your Company proposes to raise funds through issue of commercial paper and bonds depending upon the interest rate scenario in the market. Your Company is confident of meeting the funds requirements by raising resources at competitive rates.


I express my sincere gratitude to Reserve Bank of India, Securities Exchange Board of India, other Financial Institutions and Banks for their support and guidance during the year and look forward to their continued support in future too. I am also grateful to all my colleague on the Board, the Internal and Statutory Auditors for their valuable input and guidance, continued inspiration and wise counsel. Last but not the least, the Board of Directors appreciates the contribution made by the employees who have enabled the company to achieve satisfactory performance till date. Most importantly, on behalf the Board of Directors, I gratefully acknowledge the support, patronage and encouragement given to us by you all and the investors, in all these years.

August 10, 2018
New Delhi