tourism finance corporation of india … addressee only private & confidential for private...

FOR ADDRESSEE ONLY PRIVATE & CONFIDENTIALFor Private Circulation Only

TOURISM FINANCE CORPORATION OF INDIA LIMITED

Corporate and Regd. Office: 13thFloor, IFCI Tower, 61, Nehru Place, New Delhi-110019Tel: 011 26291151; Fax: 011 26291152;

Website:www.tfciltd.comCompliance/Nodal Officer: Mr. Sanjay Ahuja (Company Secretary); Tel.: 011-26291151

E-mail: [email protected]; Fax: 011-26291152

(This Private Placement Offer Letter issued in conformity with Companies Act 2013, Form PAS-4 prescribed undersection 42 and Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies(Share Capital And Debenture Rules) 2014, Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations, 2008 as amended, Circular No. RBI/2014-15/475DNBR (PD) CC No. 021/03.10.001/2014-15 dated February 20, 2015 issued by the Reserve Bank of India on “Raising Money through Private Placement byNBFCs-Non-Convertible Debentures (NCDs) by NBFCs

PRIVATE PLACEMENT OFFER LETTER DATED 16thOctober, 2015

PRIVATE PLACEMENT OFFER LETTERFOR PRIVATE PLACEMENT OF SECURED, REDEEMABLE,NON-CONVERTIBLE, TAXABLE BONDS IN THE NATURE OF PROMISSORY NOTES (SERIES [MB2015-01] OF Rs. 100 CRORES WITH AN OPTION TO RETAIN OVERSUBSCRIPTION BY TOURISMFINANCE CORPORATION OF INDIA LIMITED (“TFCI” OR “THE ISSUER” OR “THE COMPANY”.

ARRANGER TO THE ISSUE TRUSTEE FOR THEBONDHOLDERS

REGISTRAR TO THE ISSUE

Real Growth Securities Private Limited112-A, Jyoti Shikhar, District Centre, JanakPuri, New Delhi- 110058Tel.: 011-25513114-15Fax: 011-25532212Email: [email protected] Registration Number: INM000011492

IDBI Trusteeship Services LimitedAsian Building, Ground Floor.Block, 17,R Kamani Marg,Mumbai – 400001.

Tel: 022 – 40807003Fax: 022– 66311776Email: [email protected] RegistrationNumber:IND000000460

MCS Share Transfer AgentLimitedF-65, 1st floorOkhla Industrial Area, Phase I, NewDelhi -110020Tel No. (011) 4140 6149Fax No. (011)4170 9881E-mail: [email protected] RegistrationNumber:INR000004108

Listing: The Bonds are proposed to be listed on Wholesale Debt Market segment of the BSE.































Private Placement Offer Letter Tourism Finance Corporation Of India Limited(Private And Confidential)

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TABLE OF CONTENTS

Sl. No. Title

I. DEFINITIONS/ ABBREVIATIONS ............................................................................................

II. DISCLAIMER...............................................................................................................................

III. GENERAL INFORMATION........................................................................................................

IV. OUR MANAGEMENT.................................................................................................................

V. MANAGEMENT’S PERCEPTION OF RISK FACTORS ...........................................................

VI. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITSLINE OF BUSINESS ....................................................................................................................

VII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OFACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION ORAMALGAMATION, CHANGES IN CAPITAL STRUCTURE,(AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS...................................

VIII. FINANCIAL INFORMATION.....................................................................................................

IX. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE .................

X. SUMMARY TERM SHEET .........................................................................................................

XI. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BEISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUEPROCEEDS, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TOBE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ONREDEMPTION, DISCOUNT AT WHICH OFFER IS MADE ANDEFFECTIVE YIELD FOR INVESTOR) ......................................................................................

XII. CREDIT RATING & RATIONALE THEREOF .........................................................................

XIII. NAME OF DEBENTURE TRUSTEE ..........................................................................................

XIV. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BELISTED .........................................................................................................................................

XV. DEBT EQUITY RATIO................................................................................................................

XVI. SERVICING BEHAVIOUR ON EXISTING DEBT SECURITIES AND OTHERBORROWINGS ............................................................................................................................

XVII. UNDERTAKING REGARDING COMMON FORM OF TRANSFER.......................................

XVIII. MATERIAL CONTRACTS &AGREEMENTS INVOLVING FINANCIALOBLIGATIONS OF THE ISSUER...............................................................................................

XIX. DECLARATION...........................................................................................................................XX. ANNEXURES...............................................................................................................................

CONSENT LETTER OF TRUSTEE CREDIT RATING LETTER AND RATIONALE RESOLUTIONS APPLICATION FORM ALONGWITH GENERAL INSTRUCTIONS


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I. DEFINITIONS/ ABBREVIATIONS

AY Assessment YearArticles/Articles ofAssociation/AoA

Articles of Association of our Company as amended from time to time.

Allotment/Allot The issue and allotment of the Bonds to the successful Applicants pursuant tothis Issue.

Applicant/ Investor A person who makes an offer to subscribe the Bonds pursuant to the terms ofthis Private Placement Offer Letter and the Application Form.

Auditing Standards Standards of auditing or any addendum thereto for companies or class ofcompanies referred to in sub-section (10) of section 143 of the Companies Act,2013

Associate Company A company in which the Issuer has a significant influence, but which is not asubsidiary company of Issuer having such influence and includes a joint venturecompany. Significant influence means control of at least 20% of total sharecapital, or of business decisions under an agreement

Application Form The form in terms of which the Applicant shall make an offer to subscribe to theBonds and which will be considered as the application for Allotment of Bondsfor Series [MB 2015-01].

Arrangers to the Issue Arrangers to the issue are the entities as listed on covering pageBoard/ Board of Directors The Board of Directors of Tourism Finance Corporation Of India Ltd.or

Committee thereofBonds Secured, Redeemable, Non-Convertible, Taxable Bonds in the nature of

Promissory Notes of face value of ` 1 Lakh each offered through privateplacement route under the terms of this Private Placement Offer Letter

Bondholder(s) Any person holding the Bonds and whose name appears in the list of BeneficialOwners provided by the Depositories or whose name appears in the Register ofBondholders maintained by the Issuer/Registrar.

Beneficial Owner(s) Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of theBond(s) as defined in clause (a) of sub-section of Section 2 of the DepositoriesAct, 1996)

Book Closure / Record Date Record date of interest shall be 15 days prior to each interest payment date and15 days prior to the date of Maturity. Interest shall be paid to the person whosename appears as sole/first in the Register of Bondholders/Beneficial Ownersposition of the Depositories on Record Date or to the Bondholders who haveconverted the Bonds to physical form and their name is registered on theregisters maintained by Company/Registrar. In the event of Tourism FinanceCorporation of India Ltd. not receiving any notice of transfer at least 15daysbefore the respective due date of payment of interest and at least 15 days prior tothe maturity date, the transferees for the Bond shall not have any claim againstTourism Finance Corporation of India Ltd. in respect of interest so paid to theregistered Bondholder.

BSE BSE LimitedBrickworks Brickwork Ratings India Pvt. Ltd.CAG Comptroller and Auditor General of IndiaCAGR Compounded Annual Growth RateCAR Capital Adequacy RatioCDSL Central Depository Services (India) LimitedThe Companies Act The Companies Act, 1956, as amended and/or the Companies Act, 2013, to the

extent notified by the Ministry of Corporate Affairs, Government of India, asapplicable.

Debt Securities Non-Convertible debt securities which create or acknowledge indebtedness andinclude debenture, bonds and such other securities of the Issuer, whether


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constituting a charge on the assets of the Issuer or not, but excludes securityreceipts and securitized debt instruments.

Deemed Date of Allotment The cut-off date on which the duly authorized committee approves theAllotment of the Bonds i.e. the date from which all benefits under the Bondsincluding interest on the Bonds shall be available to the Bondholders. The actualallotment of Bonds (i.e. approval from the Board of Directors or a Committeethereof) may take place on a date other than the Deemed Date of Allotment.

Depository A Depository registered with SEBI under the SEBI (Depositories andParticipant) Regulations, 1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to timeDepository Participant A Depository participant as defined under Depositories Act, 1996

Designated Stock Exchange BSEDER Debt Equity RatioPrivate Placement Offer Letter Private Placement Offer Letter for private placement of Bonds for Series MB

2015-01 envisaging the disclosures in compliance SEBI Debt Regulation,Companies Act and the applicable law.

DP Depository ParticipantEPS Earnings Per ShareFIs Financial InstitutionsFIIs Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional

Investors) Regulations, 1995 and registered with the SEBI under applicable lawsin India

FPI Foreign Portfolio Investors as defined under SEBI (Foreign Portfolio Investors)Regulations, 2014 registered with SEBI.

Financial Year/ FY/ Fiscal Period of twelve months period ending on March 31, of that particular yearGoI Government of India/ Central Government

HUF Hindu Undivided FamilyTrustee IDBI Trusteeship Services LimitedIndependent Director An independent director referred to in sub-section (5) of section 149 of the

Companies Act, 2013

Issuer/ TFCI Tourism Finance Corporation of India Limited incorporated on January 27,1989 under the Companies Act, 1956 and having its Registered Office at IFCITower, 61, Nehru Place, New Delhi – 110 019L65910DL1989PLC034812

“our”/”we”/”us” Tourism Finance Corporation of India Limited

Issue/ Offer Private Placement of Secured, Redeemable, Non-Convertible, Taxable bonds inthe nature of Promissory Notes (series MB 2015-01of Rs. 100 crores with anoption to retain oversubscription)

I.T. Act The Income Tax Act, 1961, as amended from time to timeIT Department/IT Dept. Income Tax DepartmentIT Income Tax

Key Managerial Personnel Key managerial personnel, in relation to the Company, shall mean:i. Managing Director & Chief Executive Officer or the Manager;ii. Company Secretary;iii. Whole-Time Directors;iv. Chief Financial Officer; and any such other officer as may be prescribed

under the Companies Act.Listing Agreement Listing Agreement for Debt Securities issued by Securities and Exchange Board

of India vide circular no. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009and Amendments to Simplified Debt Listing Agreement for Debt Securities


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issued by Securities and Exchange Board of India vide circular no.SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 andAmendments to Simplified Debt Listing Agreement for Debt Securities issuedby Securities and Exchange Board of India vide circular no. SEBI/IMD/DOF-1/BOND/Cir-1/2010 dated January 07, 2010

Memorandum/ Memorandum ofAssociation

Memorandum of association of the Company as originally framed or as alteredfrom time to time in pursuance of any previous company law or of theCompanies Act, 2013

MD Managing Director of Tourism Finance Corporation of India Ltd.MF Mutual FundNRIs Non Resident IndiansNSDL National Securities Depository Ltd.

PAN Permanent Account NumberPrivate Placement Offer of Bonds or invitation to subscribe to the Bonds of the Issuer(other than

by way of public offer) through issue of this Private Placement Offer LetterPrivate Placement Offer Letter Private Placement Offer Letter shall mean this Private Placement Offer LetterGIR General Index Registration Number

`/INR/Rupee Indian National Rupee

RBI Reserve Bank of IndiaRBI Act, 1934 Reserve Bank of India Act, 1934RTGS Real Time Gross SettlementROC Registrar of Companies, National Capital Territory of Delhi & HaryanaRegistrar MCS Share Transfer Agent Ltd.

RBI Reserve Bank of IndiaRBI Guidelines Any rule, regulation or amendment as may be issued by RBI from time

to time.SEBI Securities and Exchange Board established under Securities and Exchange

Board of India Act, 1992, as amended from time to timeSEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to

timeSEBI Guidelines Securities and Exchange Board of India (Issue and Listing of Debt Securities)

Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878dated June 06, 2008, as amended, Securities and Exchange Board of India (Issueand Listing of Debt Securities) (Amendment) Regulations, 2012 issued videcircular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, asamended and Securities and Exchange Board of India (Issue and Listing of DebtSecurities) (Amendment) Regulations, 2014 issued vide circular no. LAD-NRO/GN/2013-14/43/207 dated January 31, 2014, and any other rule,regulation or amendment as may be issued by SEBI from time to time.

SEBI Debt Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations, 2008 as amended from time to time.

SLR Bonds Statutory Liquidity Ratio Bonds

TDS Tax Deducted at Source


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II. DISCLAIMERS

DISCLAIMER OF THE ISSUER

This Private Placement Offer Letter is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared inconformity with Form PAS-4 prescribed under Section 42 and Rule 14(1) of Companies (Prospectus and Allotmentof Securities) Rules, 2014, SEBI Guidelines and RBI Guidelines. This Private Placement Offer Letter is neither aProspectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Companies Act, 2013 and therelevant rules and regulations therein and SEBI Guidelines, RBI Guidelines. This document does not constitute anoffer to the public generally to subscription for or otherwise acquire the Bonds to be issued by Tourism FinanceCorporation of India Ltd. This document is for the exclusive use of the investors to whom it has been specificallyaddressed and it should not be circulated or distributed to third party (ies). It is not and shall not be deemed toconstitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This Bondissue is made strictly on private placement basis. Apart from this Private Placement Offer Letter, no offer documentor prospectus has been prepared in connection with the offering of this Issue or in relation to Issuer.

This Private Placement Offer Letter is not intended to form the basis of evaluation for the prospective subscribers towhom it is addressed and who are willing and eligible to subscribe to the Bonds issued by Tourism FinanceCorporation of India Ltd. This Private Placement Offer Letter has been prepared to give general informationregarding Tourism Finance Corporation of India Ltd. to parties proposing to invest in this issue of Bonds and it doesnot purport to contain all the information that any such party may require. Tourism Finance Corporation of IndiaLtd. believes that the information contained in this Private Placement Offer Letter is true and correct as of the datehereof. Tourism Finance Corporation of India Ltd. does not undertake to update this Private Placement Offer Letterto reflect subsequent events and thus prospective subscribers must confirm about the accuracy and relevancy of anyinformation contained herein with Tourism Finance Corporation of India Ltd. However, Tourism FinanceCorporation of India Ltd. reserves its right for providing the information at its absolute discretion. Tourism FinanceCorporation of India Ltd. accepts no responsibility for statements made in any advertisement or another material andanyone placing reliance on any other source of information would be doing so at his own risk and responsibility.

Prospective subscribers must make their own independent evaluation and judgment before making the investmentand are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing inBonds. It is the responsibility of the prospective subscribers to have obtained all consents, approvals orauthorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility ofthe prospective subscribers to verify if they have necessary power and competence to apply for the Bonds under therelevant laws and regulations in force. Prospective subscribers should conduct their own investigation, due diligenceand analysis before applying for the Bonds. Nothing in this Private Placement Offer Letter should be construed asadvice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Bonds. Theprospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of carein respect of this private placement offer to subscribe for the Bonds. Prospective subscribers should also consulttheir own advisors on the implications of application, allotment, sale, holding, ownership and redemption of theseBonds and matters incidental thereto.

This Private Placement Offer Letter is not intended for distribution. It is meant for the consideration of the person towhom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are beingissued on private placement basis and this offer does not constitute a public offer/ invitation.

The Issuer reserves the right to withdraw the private placement of the Bond issue prior to the issue closing date(s) inthe event of any unforeseen development adversely affecting the economic and regulatory environment or any otherforce majeure condition including any change in applicable law. In such an event, the Issuer will refund theapplication money, if any, along with interest payable on such application money, if any.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA

This Private Placement Offer Letter issue/offer/invitation has not been approved by Securities & Exchange Board ofIndia (SEBI). The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracyor adequacy of this Private Placement Offer Letter. It is to be distinctly understood that this Private Placement OfferLetter should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does


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not take any responsibility either for the financial soundness of any scheme or the projectfor which the Issue isproposed to be made, or for the correctness of the statements made or opinions expressed in this Private PlacementOffer Letter. Pursuant to rule 14 (3) of The Companies (Prospectus and Allotment of Securities) Rules, 2014, a copyof this Private Placement Offer Letter shall be filed with the Registrar of Companies, National Capital Territory ofDelhi & Haryana along with fee as provided in The Companies (Registration Offices and Fees) Rules, 2014 andwith SEBI within a period of thirty days of circulation of this Private Placement Offer Letter. However SEBIreserves the right to take up at any point of time, with Tourism Finance Corporation of India Ltd., any irregularitiesor lapses in this Private Placement Offer Letter.

DISCLAIMER OF THEARRANGER

It is advised that Tourism Finance Corporation of India Ltd. has exercised self-due-diligence to ensure completecompliance of prescribed disclosure norms in this Private Placement Offer Letter. The role of the Sole Arranger tothe Issue in the assignment is confined to marketing and placement of the Bonds on the basis of this PrivatePlacement Offer Letter as prepared by Tourism Finance Corporation of India Ltd. The Sole Arranger to the Issuehave neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this PrivatePlacement Offer Letter. The Sole Arranger to the Issue shall use this Private Placement Offer Letter for the purposeof soliciting subscription from qualified institutional investors in the Bonds to be issued by Tourism FinanceCorporation of India Ltd. on private placement basis. It is to be distinctly understood that the aforesaid use of thisPrivate Placement Offer Letter by the Sole Arranger to the Issue shall neither in any way be deemed or construedthat this Private Placement Offer Letter has been prepared, cleared, approved or vetted by the sole arranger to theIssue, nor do they in any manner warrant, certify or endorse the correctness or completeness of any of the contentsof this Private Placement Offer Letter; nor do they take responsibility for the financial or other soundness of theIssuer, its promoters, its management or any scheme or project Tourism Finance Corporation of India Ltd. The Solearranger to the Issue or any of its directors, employees, affiliates or representatives do not accept any responsibilityand/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of theinformation contained in this Private Placement Offer Letter.

DISCLAIMER OF THE STOCK EXCHANGE

As required, a copy of this Private Placement Offer Letter has been submitted to BSE (hereinafter referred to as“Exchange”) for hosting the same on its website. It is to be distinctly understood that such submission of thedocument with BSE or hosting the same on its website should not in any way be deemed or construed that thisPrivate Placement Offer Letter has been cleared or approved by the Exchange; nor do they in any manner warrant,certify or endorse the correctness or completeness of any of the contents of this document; nor do they warrant thatthe Issuer’s bonds will be listed or continue to be listed on the Exchange; nor do they take responsibility for thefinancial or other soundness of this Issuer, its promoters, its management or any scheme or project of TourismFinance Corporation of India Ltd. Every person who desires to apply for or otherwise acquire any bonds of theIssuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against theExchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connectionwith such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any otherreason whatsoever.

DISCLAIMER OF THE RESERVE BANK OF INDIA

The Bonds have not been recommended or approved by the RBI nor does RBI guarantee the accuracy or adequacyof this Private Placement Offer Letter. It is to be distinctly understood that this Private Placement Offer Lettershould not, in any way, be deemed or construed that the Bonds have been recommended for investment by the RBI.RBI does not take any responsibility either for the financial soundness of the Issuer, or the Bonds being issued bythe Issuer or for the correctness of the statements made or opinions expressed in this Private Placement Offer Letter.The potential investors may make investment decision in respect of the Bonds offered in terms of this PrivatePlacement Offer Letter solely on the basis of their own analysis and RBI does not accept any responsibility aboutservicing/repayment of such investment.


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III. GENERAL INFORMATION

NAME AND ADDRESS OF REGISTERED/HEAD/CORPORATE OFFICE OF THE ISSUER

Name of the Issuer : Tourism Finance Corporation of India Limited.Registered/ Head Office/ : IFCI Tower, 61, Nehru Place, New Delhi- 110 019Website : www.tfciltd.comE-mail : [email protected] Number : +91-11-26291151Fax Number : +91-11-26291152CIN : L65910DL1989PLC034812

Compliance/Nodal Officer and Chief Financial Officer

Compliance/Nodal Officer:

Mr. Sanjay Ahuja (Company Secretary)IFCI Tower, 61, Nehru Place, New Delhi -110019. Tel:011-26291151; Fax: 011- 26291152Email: [email protected]

Chief Financial Officer

Mr. Anoop BaliIFCI Tower, 61, Nehru Place, New Delhi -110019. Tel: 011- 26291148; Fax: 011-46727200Email: [email protected]

SOLE ARRANGER TO THEISSUE

TRUSTEE FOR THEBONDHOLDERS

REGISTRAR TO THEISSUE

Real Growth Securities Private Limited112-A, Jyoti Shikhar, District Centre,Janak Puri, New Delhi- 110058Tel.: 011-25513114-15Fax: 011-25532212Email: [email protected] Registration Number:INM000011492


Tel: 022 – 40807003Fax: 022– 66311776Email: [email protected] Registration Number:IND000000460

MCS Share Transfer AgentLimitedF-65, 1st floorOkhla Industrial Area, Phase I,New Delhi -110020Tel No. (011) 4140 6149Fax No. (011)4170 9881E-mail: [email protected] RegistrationNumber:INR000004108

Credit Rating AgenciesBrickwork Ratings India Private Limited (BWR Ratings)3rd Floor, Raj Alkaa Park, 29/3 &32/2, Kalena Agrahara,Bannerghatta Road Bangalore-560076.Phone: +918040409940Fax: +9180 40409941

SMERA Ratings Limited102, 1st Floor, Sumer Plaza,Marol Maroshi Road, Marol, Andheri(East),Mumbai-400 059.

Tel: 022-67141111, [email protected]


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STATUTORY AUDITORS OF THE ISSUER

S.No. Name Address Auditors of theCompany Since

1 M/s VC Gautam & CoChartered Accountants,ICAI Firm Registration: 000365N

B-3,Kailash Colony, New Delhi 110048

Tel: 01123314711Email: [email protected] Person: ShriV.C.Gautam

Date: 29/07/2013

Details of change in Auditors of the Company since last three years: NIL

S.No Financial Name Address Date of RemarkYear Appointment (If any)

1 2015-16 M/s VC Gautam & CoChartered Accountants

B-3,Kailash Colony,New Delhi 110048

Date: 15/07/2015 Appointed byComptroller andAuditor General ofIndia



Date:01/08/2014 Appointed byComptroller andAuditor General ofIndia



Date: 29/07/2013 Appointed byComptroller andAuditor General ofIndia

Auditors’ Qualifications

Details with respect to qualifications, reservations and adverse remarks of the auditors of the Company in the lastfive financial years immediately preceding the year of circulation of Private Placement Offer Letter and their impacton the financial statements and financial position of the Company and the corrective steps taken and proposed to betaken by the Company for each of the said qualifications, reservations and adverse remarks are given as under:

Financial Year Auditors’ qualifications, reservations and adverse remarks2014-15 Nil2013-14 Nil2012-13 Nil2011-12 Nil2010-11 Nil


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IV. OUR MANAGEMENT

Our Board

The following table sets forth details regarding our Board as on the date of this Private Placement Offer Letter.

Name, Fathers' Name. Designation,Occupation, DIN, Age and

Nationality

ResidentialAddress

Director ofthe

CompanySince

Other Directorships

Shri Malay MukherjeeFather’s Name: Jagdish ChandraMukherjeeDesignation: Director(Chairman)Occupation: ServiceDIN: 02272425Age: 60 YearsNationality: Indian

Flat No. C-159,Ground Floor,Greater Kailash-I,New Delhi, 110048,Delhi, India

03/01/2014 IFCI Limited IFCI Factors Limited IFCI Infrastructure Development Limited IFCI Venture Capital Funds Limited IFCI Financial Services Limited Stock Holding Corporation Of India

Limited

Shri Surender Kumar SangarFather’s Name: SarwanLalSangarDesignation: Managing DirectorOccupation: ServiceDIN: 06928551Age: 59 YearsNationality: Indian

C-7, Second Floor, ,Near PamposhEnclave, NewDelhi, 110048,Delhi, India

07/08/2014 N.A

Shri Mohammad MahmoodDawlaFather’s Name: Abdul RahmanDesignation: Nominee DirectorOccupation: ServiceDIN: 07010594Age: 52 YearsNationality: Indian

286, Lakshmi BaiNagar, New Delhi,110023, Delhi,India

13/11/2014 N.A

Smt. Usha SharmaFather’s Name: Hari Narayan TiwariDesignation: Nominee DirectorOccupation: ServiceDIN: 00517955Age: 52 YearsNationality: Indian

I/22, Somya Marg,Gandhi Nagar,Jaipur, 302015,Rajasthan, INDIA

08/08/2012 N.A

ShriNiraj AgarwalFather’s Name: Virender KumarAgarwalDesignation: DirectorOccupation: ServiceDIN: 06483526Age: 57 YearsNationality: Indian

2-b,Jeevan Jyot,Napean Sea road,Mumbai, 400036,Maharashtra, India

17/06/2013 N.A

ShriSethurathnam RaviFather’s Name:ThiniamSubramanasamSethuratnamDesignation: DirectorOccupation: Independent DirectorDIN: 00009790Age: 56 YearsNationality: Indian

D-218, Saket,, NewDelhi, New Delhi,110017, Delhi,INDIA

06/11/2013 IDBI Capital Market Services Limited UTI Trustee Company Private Limited S Ravi Financial Management Services

Private Limited Smera Ratings Limited SBI-SG Global Securities Services Private

Limited IDBI Bank Limited STCI Primary Dealer Limited STCI Finance Limited BOI Merchant Bankers Limited


11

Name, Fathers' Name. Designation,Occupation, DIN, Age and

Nationality

ResidentialAddress

Director ofthe

CompanySince

Other Directorships

Shri Vivek Krishnan NairFather’s Name: Krishnan ChittarethPovakat NairDesignation: DirectorOccupation: Independent DirectorDIN: 00005870Age: 63 YearsNationality: Indian

LeelaBaugAndheriKurla Road,Andheri( East), Mumbai,400059,Maharashtra,INDIA

25/08/2006 Leela Lace Holdings Private Limited Hotel Leela venture Limited The Federation Of Hotel And Restaurant

Associations Of India Armcess Engineers Private Limited Leela Capital And Finance Limited Leela Housing Private Limited Elegant Eateries Private Limited Bowling And Billiards Association Of India Mumbai International Convention And

Exhibition Centre Limited Zillion Hotels & Resorts Private Limited Leela Lace Software Solutions Private

Limited Rockfort Estate Developers Private Limited Leela Lace Estates Private Limited L. M. Realtors Private Limited Emmel Realtors And Developers Private

Limited L. M. Realtors Private Limited Leela Palaces And Resorts Limited Leela Realty Ltd

Shri Sridhar SrinivasanFather’s Name: DevenathaSrinivasanDesignation: DirectorOccupation: Independent DirectorDIN: 00004272Age: 64 YearsNationality: Indian

D-905, AshokTowers, Dr S SRoad, Parel,Mumbai, 400012,Maharashtra, India

27/05/2014 JPMorgan Mutual Fund India PrivateLimited

Strides Arcolab Limited Incube Trustee Company Private Limited DCB Bank Limited Sewa Grih Rin Limited Land Interactive Media Limited Jubilant Life Sciences Limited Strategic Research And Information Capital

Services Private Limited India Infoline Housing Finance Limited NABARD Consultancy Services Private

Limited Binani Industries Limited GVFL Trustee Company Private Limited Shriram Transport Finance Company

Limited Indian Housing Federation

Shri Chandrasekhar SubrhamoneyamFather’s Name:NilakantAiyerSubrahmoneyamDesignation: DirectorOccupation: Independent DirectorDIN: 00024780Age: 62 YearsNationality: Indian

B - 63, First Floor,,Greater Kailash Part- I, New Delhi,110049, Delhi,INDIA

18/03/2015 Sinclairs Hotels Limited

Shri Anup Shankar BhattacharyaFather’s Name: Sailendra NathBhattacharyaDesignation: DirectorOccupation: Independent DirectorDIN: 02719232Age: 63 YearsNationality: Indian

Flat No.4, IndianBank OfficersQuarters, M.R.C.Nagar, R.A.Puram,Chennai, 600028,Tamil Nadu, India

08/08/2015 Indian Institute Of Banking And Finance

None of the current Directors of the Issuer appear in the RBI’s defaulter list and/or ECGC default list.


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Relationship with other DirectorsNone of the Directors of the Company are, in any way, related to each other.Details of Changes in Directors in last 3 years:

Details of Change in Directors inlast three years:-Name DIN Designation Date of

AppointmentDate of

CessationReason

Shri SanjeevKumarJindal 02179374 Nominee Director 29/05/2013 13/11/2014 Nomination Withdrawn

Shri SatpalArora00061420

ManagingDirector

09/04/2014 07/08/2014 Resigned

Smt .Shashi Sharma 02904948ManagingDirector

16/05/2011 09/04/2014 Resigned

ShriV.P.Singh 03424009 Director 16/05/2011 08/05/2015 Resigned

Shri S.B.Nayar 02175871Director(Chairman)

31/07/2013 11/12/2013 Resigned

Shri S.K.Ganguli 00058198 Director 16/05/2011 12/09/2013 Retired

Shri Atul Kumar Rai 00134638Director(Chairman) 08/08/2012 31/05/2013 Resigned

Shri Amrik Singh 06475540 Nominee Director 16/01/2013 29/05/2013 Nomination WithdrawnShriR.R.Rai 01625853 Director 28/05/2007 04/06/2013 ResignedShri Rakesh Kapoor 00015358 Director 18/05/2011 23/04/2013 ResignedShri R.P.Singh 00463055 Director 16/05/2011 31/07/2013 ResignedShri S.K.Mandal 00086235 Director 12/09/2008 17/01/2013 ResignedDr. Raju Sharma 03492179 Director 18/05/2011 23/07/2012 ResignedShri D.Chaturvedi 02370384 Nominee Director 25/05/2009 08/08/2012 Nomination Withdrawn

Shri ShivendraTomar 03174406ManagingDirector

16/05/2011 20/09/2012 Resigned

Remuneration of Directors (during the current year and last three financial years)

Managing DirectorThe following table sets forth the details of remuneration paid to the Managing Director during the Current Yearcurrent year from April 1, 2015 to September 30, 2015:Name of the Managing Director Total (`)

Shri S.K Sangar 18,72,188

The following table sets forth the details of remuneration paid to the Managing Director during the FY 2014-15:Name of the Managing Director Total (`)

Shri S.K Sangar 19,69,883/-

The following table sets forth the details of remuneration paid to the Managing Director during the FY 2013-14:Name of the Managing Director Total (`)

Smt Shashi Sharma Nil

The following table sets forth the details of remuneration paid to the Whole Time Directors during the FY 2012-13:Name of the Managing Director Total (`)

Shri ShivendraTomar 38,23,422/-


13

Remuneration of Non Executive Directors

Set forth below are the details of the sitting fees paid to Non Executive Directors for attending the meetings of theBoard/Committees during the current year from April 1, 2015 to September 30, 2015:

S. No Name of the Director Sitting Fees

(in `)1 Shri Niraj Agarwal 90,9812 Shri V. P. Singh 14,9813 Shri Vivek Nair 30,4004 Shri S.Ravi 1,47,8725 Shri S.Sridhar, 52,8726 Shri S.C.Sekhar 1,21,272

Set forth below are the details of the sitting fees paid to Non Executive Directors for attending the meetings of theBoard/Committees during FY 2014-15:


(in `)1 Shri Niraj Agarwal 1,94,7582 Shri VP Singh 2,24,7213 Shri Vivek Nair 1,49,8164 Shri S Ravi 2,09,7405 Shri S Sridhar 97,380

Set forth below are the details of the sitting fees paid to Non Executive Directors for attending the meetings of theBoard/Committees during FY 2013-14


(in `)1 Shri Niraj Agarwal 59,9272 Shri VP Singh 1,27,3433 Shri Vivek Nair 29,9634 Shri S Ravi 22,4725 Shri S.K Ganguli 67,4166 Shri R.R Rai 22,472

Set forth below are the details of the sitting fees paid to Non Executive Directors for attending the meetings of theBoard/Committees during FY 2012-13


(in `)1 Shri S.K Ganguli 1,09,3332 Shri R.R Rai 1,42,0013 Smt. Shashi Sharma 56,0004 ShriVivek Nair 12,0005 Shri V.P Singh 56,6666 ShriSatpal Arora 50,6667 Shri R.P Singh 50,6668 Shri Rakesh Kapoor 50,666


14

9 Dr Raju Sharma 24,000

Interests of our Directors

Except as otherwise stated in “Financial Statements – Related Party Transactions” our Company has not entered intoany contract, agreements and arrangement during the three financial years preceding the date of this PrivatePlacement Offer Letter in which the directors are interested directly or indirectly and no payments have been madeto them in respect of such contracts or agreements.

All our Directors, including our Independent Director, may be deemed to be interested to the extent of fees, if any,payable to them for attending meetings of the Board or a committee thereof, as well as to the extent of otherremuneration and reimbursement of expenses payable to them.

Related Party TransactionsDisclosure of details pertaining to related party transactions, entered during the last 3 financial years immediatelypreceding the year of circulation of offer letter in terms of Accounting Standard-18 issued by the Institute ofChartered Accountants of India (ICAI) - “Related Party Disclosures” are as under

Nature of Relationship Name of the Related Party

Associate Company IFCI Limited – AssociateNorth East Tourism Development Company Pvt. Ltd.

Key Managerial Personnel Managing DirectorMr. S.K Sangar (w.e.f. 7 August 2014)Mr. S.P Arora (Upto 6 August 2014)Mrs. Shashi Sharma (Upto April 9, 2014)Mr. ShivendraTomar (Upto 11 September 2012)

(i) Related Party transactions and balances

IFCI Limited – Associate (Amount in Rs)

Transaction Description For the yearending 31 March2015

For the yearending 31 March2014


Dividend Paid 7,27,23,733 4,11,65,119 4,11,65,119Dividend Received 1,01,28,828 1,25,96,393 1,56,60,537Rent and Other charges paid 4,34,85,347 4,11,03,814 3,76,36,049Salaries for Deputation staff paid 7,51,668 40,06,817 NilSalaries for Deputation staff received 1,10,459 5,74,821 NilInterest on Bonds Received 4,66,58,630 Nil

Outstanding Balances As at 31 March2015

As at 31 March2014

As at 31 March2013

Investment in Equity Shares of IFCI Ltd 14,80,66,914 36,84,20,087 36,84,20,087Investment in Preference Shares of IFCI Ltd 2,00,00,000 2,00,00,000 2,00,00,000Investment in Tax 8.67 % Free Bonds of IFCI Ltd 50,00,50,000 50,00,50,000 NilInvestment in 9.40% Bonds of IFCI Ltd 15,00,00,000 Nil Nil

North East Tourism Development Company Pvt. Ltd. (NETDCPL) - Associate

Transaction Description For the yearending 31 March2015



Dividend Received Nil 2,71,960 1,30,000


15

Outstanding Balances As at 31 March2015

As at 31 March2014

As at 31 March2013

Investment in Equity Shares NETDCPL 26,000 26,000 26,000

Key Management Personnel

Name For the yearending 31 March2015



Mrs. Shashi Sharma, Managing Director(Upto April 9, 2014)

Nil Nil Nil

Mr.ShivendraTomar (Managing Director)(Upto 11 September 2012)

Nil Nil 38,23,422

Mr S.P Arora, Managing Director(Upto 6 August 2014)

Nil Nil Nil

Mr. S.K Sangar, Managing Director(w.e.f. 7 August 2014)

19,69,883 Nil Nil

Except for the above, there were no materially significant related party transactions i.e. transactions material innature with its Promoters, Directors or the management, their subsidiaries or relatives etc. that may potentiallyconflict with the interests of the Company at large.

(ii)There has been no non-compliance by TFCI nor any penalties imposed on the Company by any authorities.

Interest of Key Managerial Persons/Promoters in the Offer

NIL


16

LitigationStatement of pending legal cases

SlNo.

Name ofBorrower(s)/

Company/Projectdetails

Counsel

SanctionedAmount/Security

Principal /(Claim

Amount )/Details ofSuit filed

Status of Case

1 HIGHWAYUSERS INDIA (P)LTD.(Promoters -1.ShriShaikhMukhtar2. ShriSurenderkhandar3. Shri Vijay Kumar4. Shr iJavedAktarProject - Financialassistance for utilityCabins(50) invarious locations ofthe major highwaysin State ofMaharashtra.

650 Lacs 713.49Lacs Suitfiled beforeDebtRecoveryTribunal,Delhi.

Case Decreed in favour of TFCI. Shr iSurendra Khandar,one of the guarantor/Certificate Debtor, offered a property“Misty Woods” resort belonging to Suman Motels Ltd. (co-guarantor/ CD) situated at Mahableshwar, Maharashtra, to beattached and sold in the recovery proceedings. DRTappointed court receiver and took possession of the same.DRT is in the process of selling the same through publicauction.

2 SUMAN MOTELSLTD. Promoters -Mr.SurendraKandharProject - 3 starresort at Varoshi,Mahabaleshwar.

125 Lacs 39.90 LacsSuit filedbefore DebtRecoveryTribunal,Delhi.

Case Decreed in favour of TFCI. Certificate Debtors (CDs)have filed their affidavit of assets disclosing nil assets intheir ownership & possession. TFCI filed counter to the saidaffidavit. Matter is fixed for arguments on affidavit ofassets.

3 TEJ GAURAVINDUSTRIESLTD.Promoters -Mr.SurendraKandharProject - setting upa car rental servicesalongwith a travelagency at Mumbaiand Delhi.

100 Lacs 42 LacsSuit filedbefore DebtRecoveryTribunal,Delhi.

Case Decreed in favour of TFCI. The arrest warrants wereissued against the CDs, however, the same were notcomplied with by the concerned SHO. For the last 2-3hearings, report of concerned SHO was awaited, because ofwhich matter is being adjourned.


17

4 ROHINI HOTELS(MADRAS) PVT.LTD.Promoters - 1. ShriR. Pannerselvam2. Smt. JayanthiPannerselvamProject- 3-star hotelat Chennai, TamilNadu.

650 Lacsand addl.Term loanof 350Lacs

1572.44Lacs Suitfiled beforeDebtRecoveryTribunal,Delhi.

Consent Decree was passed in the matter. As the CDsdefaulted in payment of dues as per consent terms, TFCIinvoked the consent decree and proceeded for sale ofmortgaged assets. Thereafter, parties agreed for settlementand reported the same before DRAT. However, CDs failedto honor their commitment, accordingly, TFCI revoked thesettlement and is proceeding to revive the recoveryproceeding.

5 ASIAD HOTELS &LEASING Co.PVT. LTD.Promoters - 1.Sh.Lalit Agarwal, 2.Sh.Gaurav Agarwal,3. Sh.MadhurAgarwalProject - setting up athree star categoryhotel with 88 roomsat Agra, in the stateof Uttar Pradesh


Case Decreed in favour of TFCI. During the recoveryproceedings, the CDs filed various frivolous applications toset aside the ex-parte decree against them, but to no avail.Further, the Agra Cantt Board also filed objections againstauction sale of the mortgaged property. Matter is listed forarguments for issuance of sale proclamation.

6 CROSSCOUNTRYHOTELS LTD.Promoters - ShriVijay Kumar JunejaProject - equipmentlease facility

19.50 Lacs 13.87 LacsSuit filedbefore DebtRecoveryTribunal,Delhi.

Case Decreed in favour of TFCI. TFCI has lareadyrecovered a sum of Rs.40 lakh, inclusive of interest, in thematter. Recovery proceedings for balance amonut of Rs.17lakh is progressing before the Recovery Officer, DRT.

7 HOTEL KRISHNAINTERNATIONAL(India) LTD.Promoters - 1. ShriT. Keshavamurthy2. Shri U.N.RamdassBallalProject - setting up3-star hotel atBangalore,Karnataka

51.89Lacs, 216Lacs, 90Lacs,Total -357.89Lacs

573.58Lacs Suitfiled beforeDebtRecoveryTribunal,Delhi.

The case was decreed in favour of TFCI on 3-6-2011. Theassets of the Company were mortgaged on pari-passu basiswith TFCI, IFCI, Canara Bank and KSFC and KSIIDC.KSFC took possession of the secured assets under Sec.29 ofthe SFC Act and sold the same for Rs.1650 lakh out ofwhich TFCI received Rs.618.90 lakhs being its proportionateshare. The present recovery proceedings are pending beforeLd. RO for recovery of balance interest amount.

8 JOYMATHOTELS &RESORTS LTD.Promoters - Sh. JoyMathewProject - 3 StarHotel at Cochin

135 Lacs 17 LacsSuitfiled beforeDebtRecoveryTribunal,Delhi.

During the recovery proceedings, the mortgaged hotelproperty was sold in public auction for Rs.554 lakh andTFCI received its share of Rs. 334.53 lakh. The pendency ofthe case pertains to recovery of residual interest from thecut-off date to auction date (6 months).


18

9 CONTINENTALAVIATION PVT.LTD.Promoters - Sh.Sam VermaProject - Air TaxiOperations


Case Decreed in favour of TFCI. The loan was secured byhypothecation of two aircrafts, whose licences have longlapsed. Further, considering the value of the aircrafts, thedues of Airports Authority of India is also more than theamount that could be realized from sale of aircrafts, theproposed auction sale of the aircrafts was not considered.Recovery poreedings against ShriMr. Sam Verma, one of theguarantor to the loan, is pending before DRT.

10 CROSSCOUNTRYHOTELS LTDPromoters - ShriVijay KumarJunejaProject -Setting up heritagehotel at Mukundgarh,Bikaner & Jodhpur


As the company defaulted in payment of dues, TFCI tookpossession of company’s three mortgaged properties underSARFAESI Act and sold the same for total saleconsideration of Rs.2676 lakh. TFCI has filed revisedstatement of account showing the total amount recoverable,amount received and the expenses and other charge as perdirection of Ld. PO. The matter is listed before DRT for finalarguments.

11 WOODYSHOTELS PVTLTD.Promoters -1. ShriP.R. Dinesh Projetc-3 star hotel atCoachin.

300 Lacs 87.12 LacsSuit filedbefore DebtRecoveryTribunal,Delhi.

The Company prepaid the loan without prepaymentpremium. The case for recovery of prepayment premium wasfiled. However, PO, DRT vide its order dated 21-5-2015,dismissed the OA filed by TFCI against which TFCI haspreferred an appeal before DRAT. The matter came up foradmission on 13-7-2015, wherein after hearing arguments,appeal admitted and notice issued to opposite party.

12 MUKERIANPAPERS LTD.Promoters - Shri N.K. OswalProject - EquipmentLease Facility

200 Lacs 151.69LacsSuitfiled beforeDebtRecoveryTribunal,Chandigarh.

The proceedings before DRT were delayed for a long perioddue to BIFR proceedings. Subsequently, IFCI, one of the co-lender assigned its debts to ARCIL, which issued noticeunder SARFAESI Act and approached BIFR for abatementof proceedings. Thereafter, TFCI’s application before DRT,Chandigarh for revival of proceedings in respect of its claimhas been proceeding.

13 JOY HOTEL &RESORTS LTD.Prompters - 1. ShriSanjay Suri 2.Smt. ShaluSuri 3.Smt.AnjuSuriProject -Five Star DeluxeHotel at Chandigarh

3000 Lacs 2546.88Lacs Suitpendingwith DRT,Chandigarh.

TFCI & PNB issued notices u/sce. 13(2) SARFAESI Act tothe company. Meanwhile, lessor of mortgaged land viz.Estate office, Chandigarh Administration cancelled the leaseas company was reportedly in default in payment of groundrent against which TFCI filed appeal before ChiefAdministrator, Chandigarh. The appeal was disposed of withthe direction to Estate Officer that he shall issue publicationfor sale of the property within 15 days thereof giving 30days’ advance. Out of the proceeds, at the first instance theoutstanding statutory dues towards ground rent, etc. shall beretained by the EO, where after, the claims of TFCI/PNBwould be satisfied. However, the Sale Proclamation / SaleNotice is yet to be issued by the Estate Office. TFCI hasdecided to file writ petition in Chandigarh HC for issuingsuitable direction to EO, Chandigarh UT or initiate contemptproceedings against EO for non issuance of sale notice.


19

Details of Any Inquire/Investigation/Inquiry Conducted under Companies Act, 2013 and previous companylaw during the last three years against the Company or its subsidiaries

NIL

Frauds committed Against Company

NIL

Details of default(s) and/or delay(s) in payments of any kind of statutory dues, debentures/ bonds/ debt securitiesand interest thereon, deposits and interest thereon, loans from any bank or financial institution and interestthereon and other financial indebtedness including corporate guarantee issued by the Company.

NIL

Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or anyprevious company law in the last three years immediately preceding the year of circulation of PrivatePlacement Offer Letter against the Company and its Subsidiaries

There has been no inquiry, inspection or investigation initiated or conducted against the Company under theCompanies Act or any previous company law in the last three years immediately preceding the year of circulation ofPrivate Placement Offer Letter. Further there was no prosecution filed, fines imposed, compounding of offencesagainst the Company or its subsidiaries in the last three years immediately preceding the year of circulation ofPrivate Placement Offer Letter.

Details of acts of material frauds committed against the Company in the last three years, if any, and if so, theaction taken by the Company

There has been no act of material fraud committed against the Company in the last three years immediatelypreceding the year of circulation of Private Placement Offer Letter.

Outstanding borrowings/ debt securities issued for consideration other than cash, whether in whole or part,at a premium or discount, or in pursuance of an option

NIL


20

V. MANAGEMENT’S PERCEPTION OF RISK FACTORS

(A) FORWARD-LOOKING STATEMENTSWhile no forecasts or projections relating to the Company’s financial performance are included in this DisclosureDocument, this document contains certain “forward-looking statements” like intends/believes/expects and othersimilar expressions or variations of such expressions. These statements are primarily meant to give Investors anoverview of the Company’s future plans, as they currently stand. The Company operates in a highly competitive,regulated and ever-changing business environment, and a change in any of these variables may necessitate analteration of the Company’s plans. Further, these plans are not static, but are subject to continuous internal review,and may be altered if the altered plans are perceived to suit the Company’s needs better. Further, many of the plansmay be based on one or more underlying assumptions (all of which may not be contained in this DisclosureDocument) which may not come to fruition. Thus, actual results may differ materially from those suggested by theforward-looking statement. The Company cannot beheld liable by estoppel or otherwise for any forward-lookingstatement contained herein. The Company and all intermediaries associated with this Disclosure Document donot undertake to inform Investors of any changes in any matter in respect of which any forward-looking statementsare made. All statements contained in this Disclosure Document that are not statements of historical fact constitute“forward-looking statements” and are not forecasts or projections relating to the Company’s financial performance.All forward-looking statements are subject to risks, uncertainties and assumptions that may cause actual results todiffer materially from those contemplated by the relevant forward-looking statement. Important factors that maycause actual results to differ materially from the Company’s expectations include, among others: General economic and business conditions in India; The Company’s ability to successfully implement its strategy and growth plans; The Company’s ability to compete effectively and access funds at competitive cost; Changes in Indian or international interest rates; The level of non-performing assets in its portfolio; Rate of growth of its loan assets; Potential mergers, acquisitions or restructurings and increased competition; Changes in tax benefits and incentives and other applicable regulations, including various tax laws; The Company’s ability to retain its management team and skilled personnel; Changes in laws and regulations that apply to NBFCs in India, including laws that impact its lending rates

and its ability to enforce its collateral; and Changes in political conditions in India.

(These are only illustrative and not exhaustive)

By their nature, certain market risk disclosures are only estimates and could be materially different from whatactually occurs in the future. As a result, actual future gains or losses could materially differ from those that havebeen estimated. Neither the Company nor any of its Directors nor any of their respective affiliates have anyobligation, or intent to update or otherwise revise any statements reflecting circumstances arising after the datehereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

(B) PRESENTATION OF FINANCIALS AND USE OF MARKET DATAUnless stated otherwise, the financial information used in this Private Placement Offer Letter is derived from theCompany’s financial statements and prepared in accordance with Indian GAAP and the Companies Act, 1956. TheIssuer’s fiscal year commences on April 01 and ends on March 31 of a particular year. Unless stated otherwise,references herein to a Fiscal Year are to the Fiscal Year ended March 31 of the reference year. “Fiscal 2014” forinstance, refers to the Fiscal year ended March 31, 2014. In this Private Placement Offer Letter, any discrepancies inany table between the total and the sum of the amounts listed are due to rounding-off.

Unless stated otherwise, macroeconomic and industry data used throughout this Disclosure Document hasbeen obtained from publications prepared by providers of industry information, Government sources andmultilateral institutions. Such publications generally state that the information contained therein has been obtainedfrom sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliabilitycannot be assured. Although the Issuer believes that industry data used in this Disclosure Document isreliable, it has not been independently verified.


21

(C) INTERNAL/EXTERNAL RISK FACTORSThe following are the risks envisaged by the management, and Investors should consider the following riskfactors carefully for evaluating the Company and its business before making any investment decision. Unless thecontext requires otherwise, the risk factors described below apply to TFCI only. The risks have been quantifiedwherever possible. If any one of the following stated risks actually occurs, the Company’s business, financialconditions and results of operations could suffer and therefore the value of the Company’s debt securities coulddecline.Note: Unless specified or quantified in the relevant risk factors, the Company is not in a position to quantify thefinancial or other implications of any risk mentioned herein below:

INTERNAL RISK FACTORS

Debenture Redemption ReserveNo Bond Redemption Reserve is being created for issue of Bonds in pursuance of this Private Placement OfferLetter.Management Perception: According to the Companies (Share Capital and Debentures) Rules, 2014 dated31.03.2014:For NBFCs registered with the RBI under Section 45-IA of the RBI (Amendment) Act, 1997, the adequacy of theDRR will be 25% of the value of debentures issued through public issue as per present SEBI (Issue & Listing ofDebt Securities) Regulation 2008, and no DRR is required in case of privately placed debentures. Therefore creationof DRR is not envisaged against the Bonds being issued under the terms of this Private Placement Offer Letter.

Credit RiskCredit risk occurs when borrower(s), as a counter party, fails to meet its contractual obligations. Credit risk appliesnot only to loans, but also to other on and off-balance sheet exposure such as guarantees, acceptances andinvestments in securities. Project lending involves certain inherent risks in a developing economy where long-termmacro-economic adjustments towards stability are still in progress. Projects under implementation are prone to timeand cost over runs, sometimes due to factors beyond the control of the borrower. Project failure may also occur dueto adverse market situations and/or mismanagement

Management Perception: Company is making all efforts to identify such risks and factors by constantly reviewingand improving appraisal techniques, sensitivity analysis as well as other factors i.e. Project’s ability to withstandchanges, expertise and experience of the borrowers to cope with the adverse situations. The Company continues togive utmost priority to its credit appraisal, intense monitoring and supervision of the projects on a continuous basis.

Interest Rate RiskThe Company’s business is largely dependent on interest income from its operations. Interest-rate risks arise out ofmismatches between interest-rate-sensitive assets and liabilitiesManagement Perception: The Company manages such risks by fixing lending interest rates at a level linked to itsaverage cost of borrowings and by constantly monitoring the maturity pattern of its assets and liabilities

Liquidity RiskThe Company’s growth will depend on its continued ability to access funds at competitive rates. Liquidity risk arisesout of lack of adequate funds in its day-to-day operationsManagement Perception: The Company manages the liquidity risk through prudent resource planning to ensure theavailability of adequate funds at all times to meet its obligations on its liabilities as well as disbursements on duedates.

EXTERNAL RISK FACTORS

Material changes in Regulations to which the Company is subjected, could cause the Company’s business tosuffer.Management Perception: NBFCs in India are subject to detailed supervision and regulation by the RBI. NBFCs notaccepting public deposits are exempt from most such provisions. The Company is generally subjected to changes inIndian law, as well as to changes in Government regulations and policies and accounting principles. The RBI alsorequires the Company to make provisions in respect of NPAs. The provision made is equal to or higher than thatprescribed under the prudential norms. Any changes in the regulatory framework affecting NBFCs including the


22

provisioning for NPAs or capital adequacy requirements could adversely affect the profitability of the Company orits future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise.

Risk of competition in lending and resource raising could cause the Company’s business to sufferManagement Perception: Despite increasing competition, the Company has already established a strong presence inthe NBFC business in India. TFCI offers a financial products and services, in the form of Corporate Loans, cateringto varied cross section of corporate customers. The management believes that the Company’s brand equity, reachand strategic alliances along with its resource base would provide the necessary strength to perform well in acompetitive market.

A slowdown in economic growth in India could cause the Company’s business to sufferManagement Perception: The Company’s performance and the quality and growth of its assets are necessarilydependent on the health of the overall Indian economy. A slowdown in the Indian economy could adversely affectits business, including its ability to grow its asset portfolio, the quality of its assets, and its ability to implement itsstrategy. India’s economy could be adversely affected by a general rise in interest rates, or various other factorsaffecting the growth of industrial, manufacturing and services sector or general down trend in the economy.

Increased volatility or inflation of commodity prices in India could adversely affect our Company’s businessIn recent months, consumer and wholesale prices in India have exhibited marked inflationary trends, with particularincreases in the prices of food and crude oil. Any increased volatility or rate of inflation of global commodity prices,in particular oil metals and metal products prices, could adversely affect our Company's borrowers and contractualcounterparties. This may lead to slowdown in the growth of the infrastructure and related sectors could adverselyimpact our Company’s business, results of operations and financial condition.

Any downgrading of India’s debt rating by an international rating agency could have a negative impact on ourbusiness.Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agenciesmay adversely impact our ability to raise additional financing, and the interest rates and other commercial terms atwhich such additional financing may be available. This could have an adverse effect on our business and futurefinancial performance, our ability to obtain financing for capital expenditures and the trading price of the Bonds.

Difficulties faced by other banks, financial institutions or the Indian financial sector generally could cause ourbusiness to be adversely affected.We are exposed to the risks of the Indian financial sector which in turn may be affected by financial difficulties andother problems faced by Indian financial institutions. Certain Indian financial institutions have experienceddifficulties during recent years particularly in managing risks associated with their portfolios and matching theduration of their assets and liabilities, and some co-operative banks have also faced serious financial and liquiditycrises. Any major difficulty or instability experienced by the Indian financial sector could create adverse marketperception, which in turn could adversely affect our business, prospects, results of operations and financialcondition.

RISK RELATING TO INVESTMENT IN BONDS

There has been only limited trading in these Bonds.

Our ability to pay interest and redemption depends on variety of factors including our financial conditions,Indian and global market conditions, event of bankruptcy, winding up and liquidation. We cannot assureyou of payment of principal amount or interest in a timely manner or at all. However, as the rating suggestprobability of timely payment of principal amount and interest is very high.

No Debenture Redemption Reserve is envisaged against the Bonds being issued under the terms of thisPrivate Placement Offer Letter.

Any down grading in rating of bonds might adversely affect the prices of these Bonds


23

Existing Corporate Structure


24

VI. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESSSUMMARY OF BUSINESS

(i) OVERVIEW:

TFCI was incorporated on January 27, 1989 with an objective to function as a specialized All India DevelopmentFinancial Institution to cater to the financial needs of the tourism industry. The Company‟s registered office issituated at IFCI Tower, 61, Nehru Place New Delhi – 110 019. TFCI has been notified as a Public FinancialInstitution under section 4A of the Companies Act, 1956, vide Notification No S.O 7(E) dated the 3rd January 1990issued by the Ministry of Industry, Department of Company Affairs. The Government of India pursuant to therecommendations of the National Committee on Tourism viz Yunus Committee had set up under the aegis of thePlanning Commission as decided in 1988, to promote a separate all India Financial Institution for providingfinancial assistance to activities/projects related to tourism. In accordance with the above decision, All IndiaFinancial/Investment Institutions and nationalized Banks promoted Tourism Finance Corporation Of India Limited.TFCI is the listed player in the Tourism Finance space which mainly provides financial assistance to enterprises, forsetting up and/or development of tourism related activities, facilities and services, which inter alia include hotels,holiday resorts, amusement parks and complexes for entertainment, sports, and cultural events

COMPANY PRESENT BUSINESS ACTIVITIES:

TFCI provides financial assistance to enterprises for setting up and development of tourism related activities,facilities and services, which inter-alia include hotels, restaurants, holiday resorts, amusement parks and complexesfor entertainment and sports, safari parks, rope-ways cultural centers, convention halls, all forms of transport,industry, air taxis, travel and tour operating agencies, tourisms emporia, sports facilities etc. As a developmentalrole, TFCI organises seminars/participates in tourism related activities organised by the Ministry of tourism,government of India and by trade bodies/associations etc.

TFCI with a view to diversify has now decided to provide financial assistance for infrastructure development workor facility which includes roads, highways, railways, airways, port, transport systems, bridges, telecommunication,health, education, food and agriculture infrastructure etc.

Tourism Advisory and Financial Services Corporation of India Limited (“TAFSIL”) engaged in the business ofconsultancy, advisory and financial services for tourism and other activities was merged with TFCI pursuant to theOrder of Hon‟ble High Court of Delhi dated March 27, 2000 with effect from April 01, 1998.

Financial Year Major milestone/ achievement

1994-1995 Came out with public issue of equity shares at a premium of Rs. 20 per share aggregatingRs. 51 crore

1999-2000 Merger of TAFSIL with TFCI

2006-2007 Net NPA level reduced to Nil

2007-2008 Raised additional equity by way of preferential allotment at a price of Rs. 48 per shareaggregating Rs. 63.38 crore

2011-2012 Total loans crossed Rs.1154 crore and disbursement increased by over 48%

2014-2015 Crossed the balance sheet size of Rs.1500 crore.


25

(i) KEY OPERATIONAL AND FINANCIAL PARAMETERS FOR THE LAST 3 AUDITED YEARS(STANDALONE BASIS)

(Amount in RsCrores)Particulars 2014-15 2013-14 2012-13 2011-12

Net Worth 479.10 436.47 414.87 374.17

Total Debt 956.50 861.50 910.92 789.92

Non-Current Maturities of Long TermBorrowing

956.50 861.50 806.50 758.58

Short Term Borrowing --- --- 2.34 ---

Current Maturities of Long TermBorrowing

--- --- 102.08 31.34

Net Fixed Assets 29.53 30.25 31.74 27.53

Non Current Assets 1183.39 1017.84 978.11 919.59

Cash and Cash Equivalents 2.05 8.18 1.06 18.31

Current Investments 73.46 66.20 156.33 76.98

Current Assets 13.99 15.47 9.89 9.80

Current Liabilities 32.77 36.13 157.74 53.54

Off Balance Sheet Assets --- --- --- ---

Interest Income 172.04 175.03 174.10 116.39

Interest Expense (including otherBorrowing Cost)

85.18 80.78 88.52 59.26

Net Interest Income 86.86 94.27 85.58 57.13

Provisioning and write offs 4.00 4.60 6.00 -6.00

PAT 60.18 58.50 55.53 49.47

Gross NPA (%) 3.84 1.72 0.94 0.49

Net NPA (%) 1.50 Nil Nil Nil

Total Loan Assets (net) 1245.18 1150.48 1129.33 1000.19

Tier I - CAR (%) 30.23 32.05 29.57 31.33

Tier II - CAR (%) 7.42 7.81 7.64 9.14

CAR Ratio (%) 37.65 39.86 37.21 40.47

Return on Net worth (average) 13.15 13.66 14.08 13.94

Debt Equity Ratio (times) 2:1 1.97:1 2.20:1 2.11:1

Total Assets 1500.87 1361.80 1392.04 1195.94

Return on Assets (average) 4.20 4.25 4.29 4.75

(ii) Gross Debt : Equity Ratio of the Company

Before the issue of Debt Securities (as On 31 March 2015) 2:1After the issue of Debt Securities 2.21:1

(iii) Project Cost and Means of Financing, In Case Of Funding Of New Projects: NIL


26

VII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIESINCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION,CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) ANDBORROWINGS

ConstitutionTFCI was incorporated on January 27, 1989 with an objective to function as a specialized All India DevelopmentFinancial Institution to cater to the financial needs of the tourism industry. The Company’s registered office issituated at IFCI Tower, 61, Nehru Place New Delhi – 110 019. TFCI has been notified as a Public FinancialInstitution under section 4A of the Companies Act, 1956, vide Notification No S.O 7(E) dated the 3rd January 1990issued by the Ministry of Industry, Department of Company Affairs. TFCI is also registered with RBI as a NBFC-ND-SI

TFCI is a notified Public Financial Institution u/s 2(72) of the Companies Act, 2013 (section 4A of Companies Act,1956). TFCI is indirectly controlled by the Central Government as the majority of its shareholders are GovernmentCompanies/Nationalised Banks and Statutory Auditors of TFCI is being appointed by Comptroller and Auditor-General of India pursuant to Section 139 of the Companies Act, 2013.

Changes in the Registered and Corporate Office in last three years

Date of shareholders’resolution

Change in address of the Registered Office

NIL

Details regarding acquisition of business/undertakings, mergers, amalgamation, revaluation of assets

Our Company has neither acquired any entity, business or undertakings nor undertaken any mergers, amalgamation,or revaluation of assets.

Joint VenturesNIL

CAPITAL STRUCTURE

1. The equity share capital of our Company, as on September 30, 2015, is set forth below:

Aggregate value at nominal value

A) Authorised Share Capital

25,00,00,000 Equity Shares of Rs. 10/- each 250,00,00,000/-

25,00,00,000 Preference Shares of Rs. 10/-each 250,00,00,000/-

B) Issued, Subscribed And Paid Up Share Capital

8,07,16,748 Equity Shares of Rs. 10/-each 80,71,67,480

2. Changes in the Capital Structure for last five years

There is no change in the capital structure of the Company as on September 30, 2015, for the last fiveyears.


27

3. Share Capital History

Date of Issue/allotment

No. of EquityShares of our

Company

FaceValue

(`)

Issueprice(`)

Nature forallotment

Conside-ration in

Cash/ otherthan cash

Equity ShareCapital (`)

CumulativeShare

Premium(Rs.in crores)

Equity ShareCapital

(Rs.in crores)

No. of EquityShares

1989 5,00,00,000 10/- 10/-Initial

SubscriptionCash 50,00,00,000 - 50 5,00,00,000

24-11-1994 1,70,44,100 10/- 30/-Initial Public

OfferCash 17,04,41,000 30.57 67.04 6,70,44,100

28-03- 2000 3,75,000 10/- 20/-PreferentialAllotment

Cash 37,50,000 19.32 67.42 6,74,19,100

25-02- 2008 1,32,97,648 10/- 48/-PreferentialAllotment

Cash 13,29,76,480 65.56 80.72 8,07,16,748

4. Our Shareholding Pattern as on 30 September 2015

Sr. No. CategoryNo. of

ShareholdersTotal No. of

Shares

No. of Sharesin demat

form

TotalShareholdingas a %age ofTotal No. of

Shares

A Shareholding of Promoter & Promoter Group(1) Indian(a) Individuals/ Hindu Undivided Family 0 0 0 0(b) Central Government/ State

Government(s)0 0 0 0

(c) Bodies Corporate 0 0 0(d) Financial Institutions/ Banks 6 50237642 50237642 62.2394

Sub-Total (A)(1) 6 50237642 50237642 62.2394(2) Foreign(a) Individuals (Non- Resident Individuals/

Foreign Individuals)0 0 0 0

(b) Bodies Corporate 0 0 0 0(c) Institutions 0 0 0 0

Sub-Total (A)(2) 0 0 0 0Total Shareholding of Promoter andPromoter Group (A) = (A)(1)+(A)(2)

6 50237642 50237642 62.2394

B Public Shareholding(1) Institutions(a) Mutual Funds/ UTI 25 4609261 4606061 5.7104(b) Financial Institutions/ Banks 5 69490 67590 0.0861(c) Foreign Institutional Investors 6 1007879 1007879 1.2487

Sub-Total (B)(1) 36 5686630 5681530 7.0452(2) Non-Institutions(a) Bodies Corporate 795 4687462 4605961 5.8073(b) Individuals(i) Individual shareholders holding nominal

share capital up to Rs. 1 lakh59706 15621547 13176161 19.3535

(ii) Individual shareholders holding nominalshare capital in excess of Rs. 1 lakh

145 3935970 3913970 4.8763

(c) Qualified Foreign Investor 0 0 0 0

(d) Any OtherTrust & Foundations 2 2956 2956 0.0037Non Resident Individual 276 544541 544541 0.6746Sub-Total(B)(2) 60924 24792476 22243589 30.7154


28

Total Public Shareholding (B)=(B)(1)+(B)(2)

60960 30479106 27925119 37.7606

TOTAL (A)+(B) 60966 80716748 78162761 100C Shares held by Custodians and against

which Depository Receipts have beenissued

0 0 0 0

GRAND TOTAL (A)+(B)+(C) 60966 80716748 78162761 100

5. Promoter Holding as on September 30, 2015

Sr.No.

Name ofShareholder

Total No. ofEquityShares held

No. of EquityShares heldin dematform

Totalshareholdingas a%age ofTotal No. ofEquityShares

No ofEquitySharesPledged

% of EquitySharespledged withrespect tosharesowned

1 IFCI Limited 3,15,58,613 3,15,58,613 39.0980 Nil Nil2 State Bank of India 74,16,296 74,16,296 9.1881 Nil Nil3 Life Insurance

Corporation of India54,13,180 54,13,180 6.7064 Nil Nil

4 Bank Of India 37,90,024 37,90,024 4.6955 Nil Nil5 United India Insurance

Company Limited11,98,002 11,98,002 1.4842 Nil Nil

6 The Oriental InsuranceCompany Limited

8,61,527 8,61,527 1.0673 Nil Nil

Total 5,02,37,642 5,02,37,642 62.2395%

6. Except as set forth below, none of our Directors hold any Equity Shares as on September 30, 2015

Mr S.C Sekhar : 500 Equity shares

7. Our top ten shareholders and the number of Equity Shares held by them, as on September 30, 2015are as follows:

Sl.No.

Particulars Total No.of Equity

Shares

No. ofShares in

dematform

TotalShareholding as% of total no. of

equity shares1 IFCI Limited 3,15,58,613 3,15,58,613 39.0980

2 State Bank of India 74,16,296 74,16,296 9.1881

3 Life Insurance Corporation of India 54,13,180 54,13,180 6.7064

4 Bank Of India 37,90,024 37,90,024 4.6955

5 SBI Magnum Multiplier Fund 20,00,000 20,00,000 2.4778

6 United India Insurance Company Limited 11,98,002 11,98,002 1.4842

7 Indian Syntans Investments Private Limited 11,72,599 11,72,599 1.4527

8 The Oriental Insurance Company Limited 8,61,527 8,61,527 1.0673

9 Birla Sun Life Trustee Company Private Limited 6,47,000 6,47,000 0.8016

10 Jodhan Investment And Finance Corp. Private Limited 5,01,170 5,01,170 0.6029

Total 5,45,58,411 5,45,58,411 67.5745%


29

8. No Equity Shares of the Company as on September30, 2015, are pledged or otherwise encumbered by thePromoters.

9. The Company has not issued any Equity Shares or debt securities for consideration other than cash,whether in whole or part, since its incorporation.

10. Our Company has not undertaken any acquisition or amalgamation in the last one year prior to filing of thisPrivate Placement Offer Letter.

11. Our Company has not undergone any reorganization or reconstruction in the last one year prior to filing ofthis Private Placement Offer Letter.

12. Other than debt securities issued by the Company, as detailed below and outstanding as on 30September,2015, our Company has not issued any debt securities:

(a) for consideration other than cash;(b) at a premium or a discount; and/or(c) in pursuance of an option.

A. Zero Coupon Bonds: NIL

B. Foreign Currency Bonds: NIL

C. Commercial Papers: NIL

D. Bonds issued at premium: NIL

13. Amount of corporate guarantees issued by the Issuer in favour of various counter parties including itsSubsidiaries, Joint Venture entities, Group Companies etc. - NIL

BRIEF NOTE ON PUBLIC OFFERS

A. INITIAL PUBLIC OFFER (IPO)

Our Company had made an IPO of 1,70,44,100 Equity Shares for cash at a price of Rs 30 per EquityShare(including a premium of Rs 20 per Equity Share) aggregating to Rs.51 crores through a prospectus datedSeptember, 1994.

B. FURTHER PUBLIC OFFER (FPO)NIL


30

FINANCIAL INDEBTEDNESS(As on 30 September 2015)

Secured Loan Facilities

Lender’s Name Type ofFacility

AmountSanctioned(Rs. in crore)

Principal AmountOutstanding(Rs. in crore)

Repayment Date/Schedule

Security

Bank of India Term Loan 200.00 125.00 26.12.2017 ( Rs.37.50 Cr)26.12.2018 ( Rs. 37.50 Cr)26.12.2019 ( Rs. 50.00 Cr)

Secured againsthypothecation

of bookdebts/futurereceivables

Federal Bank Ltd Term Loan 50.00 50.00 20.3.2018 ( Rs. 15.00 Cr)20.3.2019 ( Rs. 15.00 Cr)20.3.2020 ( Rs. 20.00 Cr)

Total 175.00

Unsecured Loan Facilities

Lender’s Name Type ofFacility

AmountSanctioned(Rs. in crore)

Principal AmountOutstanding(Rs. in crore)

Repayment Date/Schedule

Security

-----------------------------------------NIL------------------------------------

Details of Commercial Paper

S No Maturity Date Amount Outstanding

-----------------------------------------NIL------------------------------------

Bonds issued by Our Company

Bond/DebentureSeries

Deemed dateOf Allotment

CouponRate(%p.a.)

AmountOutstanding

(Rs.in crore)

RepaymentDate/Schedule

CreditRating

Secured/Unsecured

Security

MB XLVI-C 25-Feb-2013 9.65% 75.00 25-Feb-2033 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLVI-B 25-Feb-2013 9.60% 100.00 25-Feb-2033 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLVI-A 25-Feb-2013 9.50% 50.00 25-Feb-2023 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLV 21-Aug-2012 9.95 75.00 21-Aug-2022 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLIV 30-Jun-2012 9.95 75.00 01-Jul-2022 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLIII 19-Mar-2012 9.65 56.50 19-Apr-2022 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.


31

MB XLII 16-Nov-2011 10.20 100.00 16-Nov-2021 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XLI 01-Sep-2011 10.15 100.00 01-Sep-2021 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XXXX 29-Nov-2010 8.90 50.00 29-Nov-2020 AAbyBRICKWORK&A+ by CARE

Unsecured N.A.

MB XXXVIII 31-Mar-2009 9.50 75.00 30-Apr-2019 AAbyBRICKWORK&A+ by CARE

Unsecured&Subordinated

N.A.

MB XXXIX 08-Apr-2009 9.50 25.00 30-Apr-2019 AAbyBRICKWORK&A+ by CARE

Unsecured&Subordinated

N.A.

Total 781.50

Corporate Guarantees

Our Company has not issued any Corporate Guarantee as on September 30, 2015.

Details of Rest of the Borrowings (if any including hybrid debt like FCCB, Optionally ConvertibleDebentures/Preference Shares) as on September 30, 2015.

Our Company has no outstanding borrowings in form of hybrid debt as on September 30, 2015.

List of Top 10 Bondholders of the Company as on September 30, 2015:

S. NO NAME Amount (Rs)

1 Food Corporation of India CPF Trust 1,12,80,00,000

2 Trustees GEB'S CPF Fund93,90,00,000

3 A P S R T C Employees Provident Fund Trust91,30,00,000

4The Thane District Central Cooperative BankLimited

48,50,00,000

5 HAL Limited EPF Trust35,00,00,000

6Board of Trustees For Bokaro Steel EmployeesProvident Fund

33,10,00,000

7 HDFC Bank Limited EPF Trust20,50,00,000

8 Trustees Hindustan Steel Limited CPF, Rourkela20,00,00,000

9 MTNL, EPF Trust18,00,00,000

10Hindustan Aeronautics Limited Nasik DivisionProvident Fund

17,90,00,000


32

VIII. FINANCIAL INFORMATION

(Rs. Incrores)Particulars 2014-15 2013-14 2012-13 2011-12

Net Worth 479.10 436.47 414.87 374.17

Total Debt 956.50 861.50 910.92 789.92

Non-Current Maturities of Long TermBorrowing

956.50 861.50 806.50 758.58

Short Term Borrowing --- --- 2.34 ---

Current Maturities of Long TermBorrowing

--- --- 102.08 31.34

Net Fixed Assets 29.53 30.25 31.74 27.53

Non Current Assets 1183.39 1017.84 978.11 919.59

Cash and Cash Equivalents 2.05 8.18 1.06 18.31

Current Investments 73.46 66.20 156.33 76.98

Current Assets 13.99 15.47 9.89 9.80

Current Liabilities 32.77 36.13 157.74 53.54

Off Balance Sheet Assets --- --- --- ---

Interest Income 172.04 175.03 174.10 116.39

Interest Expense (including otherBorrowing Cost)

85.18 80.78 88.52 59.26

Net Interest Income 86.86 94.27 85.58 57.13

Provisioning and write offs 4.00 4.60 6.00 -6.00

PAT 60.18 58.50 55.53 49.47

Gross NPA (%) 3.84 1.72 0.94 0.49

Net NPA (%) 1.50 Nil Nil Nil

Total Loan Assets (net) 1245.18 1150.48 1129.33 1000.19

Tier I - CAR (%) 30.23 32.05 29.57 31.33

Tier II - CAR (%) 7.42 7.81 7.64 9.14

CAR Ratio (%) 37.65 39.86 37.21 40.47

Return on Net worth (average) 13.15 13.66 14.08 13.94

Debt Equity Ratio (times) 2:1 1.97:1 2.20:1 2.11:1

Total Assets 1500.87 1361.80 1392.04 1195.94

Return on Assets (average) 4.20 4.25 4.29 4.75


33

STATEMENT OF ASSETS AND LIABILITIES(Amount in Rs)

ParticularsAs at 31

March 2015As at 31

March 2014As at 31

March 2013As at 31

March 2012Audited Audited Audited Audited

I. EQUITY AND LIABILITIES(1) Shareholder's Funds(a) Share Capital 807,167,480 807,167,480 807,167,480 807,167,480(b) Reserves and Surplus 3,983,843,659 3,557,502,550 3,392,887,638 2,966,284,824

(2) Non-Current Liabilities(a) Long Term Borrowings 9,565,000,000 8,615,000,000 8,065,000,000 7,585,800,000

(b) Deferred Tax Liabilities (Net)223,088,127 193,289,346

-(c) Other Long Term Liabilities 5,989,600 5,989,600 5,989,600 10,310,545

(d) Long Term Provisions 96,006,80577,742,345 71,978,056 54,419,382

(3) Current Liabilities

(a) Short-Term Borrowings - -23,428,934

-(b) Other Current Liabilities 233,944,783 231,005,142 1,424,877,198 400,466,716(c) Short-Term Provisions 93,707,419 130,278,013 129,107,706 134,909,405

TOTAL 15,008,747,873 13,617,974,476 13,920,436,612 11,959,358,352

II.ASSETS ` `(1) Non-Current Assets(a) Fixed Assets

(i) Tangible Assets 295,324,010 301,951,383 316,426,962 273,796,652

(ii) Intangible Assets - 506,000 1,012,000 1,518,000

(b) Non Current Investments 1,168,519,279 721,793,279 245,126,003 218,011,874

(c) Deferred Tax Assets (Net) - - 51,435,024 31,823,723(d) Long terms Loans AndAdvances 10,665,400,585 9,456,656,357 9,536,088,225 8,977,868,730

(2) Current Assets

(a) Current Investments 734,627,191 662,004,971 1,563,288,981 769,814,997

(b) Cash and Cash Equivalents 20,525,513 81,839,112 10,508,241 183,139,210

(c) Short-term Loans and Advances 1,984,413,337 2,238,531,305 2,097,654,127 1,405,410,841

(d) Other Current assets 139,937,958 154,692,069 74,518,257 67,603,466

(e) Book Debts - - 24,378,792 30,370,859

TOTAL 15,008,747,873 13,617,974,476 13,920,436,612 11,959,358,352


34

STATEMENT OF PROFIT AND LOSS(Amount in Rs)

Sr. No Particulars Year ended31 March

2015

Year ended31 March

2014

Year ended31 March

2013

Year ended31 March

2012

I Revenue from operations 1,861,571,696 1,840,588,018 1,798,670,362 1,292,709,384II Other Income 18,913,522 32,015,537 25,330,455 10,524,463III III. Total Revenue (I +II) 1,880,485,218 1,872,603,555 1,824,000,817 1,303,233,847IV Expenses:

Employee Benefit Expense 65,022,881 63,814,556 64,525,896 63,989,130Financial Costs 851,760,522 807,760,434 885,163,861 592,577,214Depreciation And Amortization Expense 7,965,156 17,706,875 17,319,095 17,387,227Other Expense 97,146,047 96,662,346 72,645,714 58,458,868Provision for Doubtful Debts/Investments 40,000,000 46,000,000 60,000,000 (60,000,000)

Total Expenses (IV) 1,061,894,606 1,031,944,211 1,099,654,566 672,412,439

VProfit before exceptional and extraordinary items and taxIII - IV

818,590,612 840,659,344 724,346,251 630,821,408

VI Exceptional Items - - - -

VII Profit before extraordinary items and tax (V - VI) 818,590,612 840,659,344 724,346,251 630,821,408

VIII Extraordinary Items - - - -

IX Profit before tax (VII - VIII) 818,590,612 840,659,344 724,346,251 630,821,408

X Tax expense:

(1) Current tax 187,000,000 238,150,000 188,700,000 123,500,000 (2) Deferred tax Liability 29,798,781 17,519,522 19,611,301- 12,625,045

XI Profit(Loss) from the perid from continuing operations 601,791,831 584,989,822 555,257,552 494,696,363

XII Profit/(Loss) from discontinuing operations - - - -

XIII Tax expense of discounting operations - - - -

XIV Profit/(Loss) from Discontinuing operations (XII - XIII) - - - -

XV Profit/(Loss) for the period (XI + XIV) 601,791,831 584,989,822 555,257,552 494,696,363

XVI Excess Income Tax Provision for Various Assessment Years - - - -

XVII Profit/(Loss) Carried over To General Reserve) (XV-XVI) 601,791,831 584,989,822 555,257,552 494,696,363

XVIII Earning per equity share: (1) Basic 7.46 7.25 6.88 6.13 (2) Diluted 7.46 7.25 6.88 6.13


35

STATEMENT OF CASH FLOWS(Amount in Rs)

ParticularsAs at 31

March 2015As at 31

March 2014As at 31

March 2013As at 31

March 2012A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax 818,590,612 840,659,344 724,346,251 630,821,408Adjustment for:Provision / (Write off) for Doubtful Debts/Investments 40,000,000 46,000,000 60,000,000 (60,000,000)Depreciation & Amortization 7,965,156 17,706,875 17,319,095 17,387,227(Profit)/Loss on Sale of Assets (131,876) 29,064 31,169 335,796Operating Cash before working capital changes 866,423,892 904,395,283 801,696,515 588,544,431Adjustment for:(Increase) / Decrease in Long Term Loans & Advances (1,261,737,838) (39,907,288) (596,961,026) (3,245,617,475)(Increase) / Decrease in ShortTerm Loans & Advances 254,117,968 (140,877,178) (692,243,286) 849,310,021(Increase) / Decrease Non Current Investment (446,752,000) (476,667,276) 4,900,000 20,655,999(Increase) / Decrease Current Investment (29,697,577) 900,597,168 (835,711,785) (468,204,245)(Increase) / Decrease in Long Term Borrowings 950,000,000 550,000,000 479,200,000 3,001,400,000(Increase) / Decrease in Short Term Borrowings - (23,428,934) 23,428,934 (223,527,015)(Increase) / Decrease in Other Long Current Liabilities (4,320,945) 4,565,340(Increase) / Decrease in Other Current Liabilities 2,939,641 (1,193,872,056) 1,024,410,482 (99,451,113)(Increase) / Decrease in Long Term Provisions 2,664,460 1,264,289 5,858,674 3,141,471(Increase) / Decrease in Short Term Provisions (733,401) 422,063 (5,801,699) 9,402,240(Increase) / Decrease in Other Current Assets 14,754,111 (55,795,020) (6,914,791) (6,331,642)(Increase) / Decrease in Book Debts 5,992,067 (16,309,776)Cash Generated from Operations 351,979,256 426,131,051 203,533,140 417,578,236Direct Tax Paid (201,305,033) (239,472,592) (188,034,797) (122,233,762)Net Cash Flow from Operating Activities 150,674,223 186,658,459 15,498,343 295,344,474

B. Cash flows from Investing ActivitiesPurchase of Fixed Assets (2,793,088) (2,932,625) (60,019,149) (1,043,916)Sale of fixed Assets 982,087 178,265 544,575 185,172Net cash used in Investing Activities (1,811,001) (2,754,360) (59,474,574) (858,744)

C. Cash flows from Financing ActivitiesShare capital And Reserves - - (16,081,510) (9,637,988)Payment of Dividend And Dividend Distribution Tax (210,176,821) (112,573,228) (112,573,228) (112,573,228)Net cash used in Financing Activities (210,176,821) (112,573,228) (128,654,738) (122,211,216)

Net increase in cash and cash equivalents (A+B+C) (61,313,599) 71,330,871 (172,630,969) 172,274,514Cash and cash equivalents at beginning of the year 81,839,112 10,508,241 183,139,210 10,864,696Cash and cash equivalents at end of the year 20,525,513 81,839,112 10,508,241 183,139,210

COMPONENTS OF CASH AND CASH EQUIVALENTSCash in Hand 1,172 2,144 45,709 26,640Cheque/Draft in Hand 985,185Balances with BanksCurrent Accounts 2,003,891 5,275,102 - 73,593,210Deposit Accounts - 64,000,000 - 100,000,000Unclaimed Dividend Accounts 18,520,450 12,561,866 10,462,532 8,534,175Total Cash And Cash Equivalents 20,525,513 81,839,112 10,508,241 183,139,210


36

OTHER FINANCIAL PARAMETERS

Particulars FY 2014-15 FY 2013-14 FY 2012-13

Dividend declared 18% 12% 12%

CHANGES IN ACCOUNTING POLICIES DURING THE LAST THREE YEARS AND THEIR EFFECTON THE PROFITS AND THE RESERVES OF THE COMPANY

Financial Year Change in accounting policies and their effect

2014-15 No Change

2013-14 No Change

2012-13 No Change

IX. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

NIL


37

X. SUMMARY TERM SHEET FOR BOND SERIES MB–2015-01

Security Name 8.81% Tourism Finance Corporation of India Limited 2025Issuer Tourism Finance Corporation of India LimitedType of Instrument Secured, Redeemable, Non-Convertible, Bonds in the nature of Promissory

Notes. Bullet Redemption (At the end of 10thYear).Nature and status of Instrument Secured, Redeemable, Non-Convertible, Bonds in the nature of Promissory Notes

(“Bonds”)Mode of Issue Private placementEligible Investors 1. Qualified Institutional Buyers (“QIBs”):

a. Mutual Funds,b. Public Financial Institutions specified in Section 2(72) of the Companies

Act 2013;c. Scheduled Commercial Banks;d. State Industrial Development Corporations;e. Insurance Companies registered with the Insurance Regulatory and

Development Authority;f. Provident Funds and Pension Funds with minimum corpus of Rs. 25.00

crore;g. National Investment Funds set up by resolution no. F. No. 2/3/2005-

DDII dated November 23, 2005 of the Government of India published inthe Gazette of India;

h. Insurance funds set up and managed by army, navy or air force of theUnion of India.

2. Non QIBs:a) Companies and Bodies Corporate authorized to invest in bonds/

debentures;b) Co-operative Banks and Regional Rural Banks authorized to invest in

bonds/ debentures;c) Gratuity Funds and Superannuation Funds;d) Provident Funds and Pension Funds with corpus of less than Rs. 25.00

crore;e) Societies authorized to invest in bonds/ debentures;f) Trusts authorized to invest in bonds/ debentures;g) Statutory Corporations/ Undertakings established by Central/ State

legislature authorized to invest in bonds/ debentures;

Non-Eligible classes ofInvestors

The following categories of persons, and entities, shall not be eligible toparticipate in the Issue and any Applications from such persons and entities areliable to be rejected:

a) Minors without a guardian name (A guardian may apply on behalf of aminor. However, Applications by minors must be made throughApplication Forms that contain the names of both the minor Applicantand the guardian);

b) Non-resident investors including NRIs, FIIs, QFIs, FPIs and SWFs;c) Venture Capital Fund and Foreign Venture Capital Investor;d) Overseas Corporate Bodies; ande) Person ineligible to contract under applicable statutory/regulatory

requirements.f) Hindu Undivided Families through Karta;g) Partnership firms formed under applicable laws in India in the name of

the partners.h) Resident Individual Investors;


38

Listing (including name ofstock Exchange(s) where it willbe listed and timeline forlisting)

Proposed to be listed on BSE

In case of delay in listing of the debt securities beyond prescribed period from thedeemed date of allotment, the company will pay penal interest at the rate asmentioned in the relevant regulations.

Rating of the Instrument “BWR AA (Outlook Stable)” by BRICKWORK & “SMERA AA (OutlookStable)” by SMERA

Issue Size Rs. 100 crores (with an option to retain oversubscription)Objects of the Issue Augmenting fund requirement for the regular business activities of the IssuerDetails of the utilization of theProceeds

The funds raised through this private placement are not meant for any specificproject as such and therefore the proceeds of this Issue shall be utilized for theregular business activities of Tourism Finance Corporation of India. Therefore,the management shall ensure that the funds raised via this private placement shallbe utilized only towards satisfactory fulfillment of the Objects of the Issue.

Coupon Rate 8.81% p.a. (payable semi annually)Step Up/Step Down CouponRate

None

Coupon Payment Frequency Semi AnnualCoupon Payment Date January 1st , and July 1st every yearCoupon Type FixedCoupon Reset NoneDay Count Basis Actual/ Actual

Interest shall be computed on an “actual/actual basis”. Where the interest period(start date to end date) includes February 29, interest shall be computed on 366days-a-year basis

Interest on Application Money In respect of Investors who get Allotment of Bonds in the Issue, interest onApplication Money shall be paid at the Coupon Rate (subject to deduction ofincome tax under the provisions of the Income Tax Act, 1961, or any otherstatutory modification or re-enactment thereof, as applicable) on the aggregateface value amount of Bonds for the period starting from and including the date ofrealization of Application Money in Issuer’s Bank Account up to but excludingthe Deemed Date of Allotment.

Default Interest Rate 2% p.a. over the coupon rate will be payable by the Company for the defaultingperiod in case of default in payment of interest/redemption amount.

Tenor 10 years from the Deemed Date of AllotmentRedemption Date At the end of 10thyear from deemed date of allotmentRedemption Amount At par (Rs.1 lakh per Bond) at the end of 10 Years from the Deemed Date of

Allotment.Redemption Premium /Discount NILIssue Premium/Discount NILIssue Price At par (Rs. 1 lakh per Bond)Discount at which security isissued and the effective yield asa result of such discount.

Effective yield is 9% p.a

Put option Date N/APut option Price N/ACall Option Date N/ACall Option Price N/APut Notification Time N/ACall Notification Time N/AFace Value Rs. 1 lakh per BondMinimum Application and inmultiples of Debt securitiesthereafter

Application must be for a minimum size of Rs. 1 Crore (100 bonds) and inmultiple of Rs. 1 Lakh (1 bond) thereafter.


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Issue Timing1. Issue Opening Date*2. Issue Closing Date *3. Pay-in Date *4. Deemed Date of Allotment*

Issue Opening: 19thOctober, 2015Issue Closing: 09thNovember, 2015Pay-in Date: 19thOctober, 2015 to 09thNovember, 2015[November 9, 2015]

Issuance mode of theInstrument

In Dematerialized mode

Business Day Convention “Business Day” shall be a day on which commercial banks are open for businessin the city of New Delhi. If any coupon payment date and/or redemption datefalls on a day which is not a business day, payment of interest and/or principalamount shall be made on the next business day without liability for makingpayment of interest for the delayed period.

Trading mode of the Instrument In Dematerialized modeSettlement mode of theInstrument

Payment of interest and repayment of principal shall be made by way ofcheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through directcredit/ RTGS/ Fund Transfer/ NECS/ NEFT or any other electronic mode offeredby the Banks.

Depository National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL).

Record Date 15 days prior to each Coupon Payment Date/ Redemption date.Security The Bonds shall be secured by way of first pari passu charge on the book debts of

the Issuer which are charged to other lender / trustee and as may be agreedbetween the Issuer and the Trustee, pursuant to the terms of the Debenture/BondTrust Deed with a minimum security cover of one time of the aggregate facevalue amount of bonds outstanding at all times.

The Issuer undertakes that it has obtained requisite permission/ consent from theearlier creditor(s)/trustees to create pari passu charge and execute the necessarydocuments for creation of the charge, including the Bond Trust Deed, withinsixty days of Deemed Date of Allotment of the Bonds and submit with BSEwithin five working days of execution of the same for uploading on its website.The creation of such security shall be sufficient compliance of the Issuer’sobligation to create security. In the event of delay in execution of theDebenture/Bond Trust Deed within sixty days of Deemed Date of Allotment ofthe Bonds, the Company shall refund the subscription with the Coupon Rate orpay penal interest at the rate of 2.00% p.a. over the Coupon Rate till theseconditions are complied with, at the option of the Bondholders.

Transaction Documents The Issuer has executed/ shall execute the documents including but not limited tothe following in connection with the Issue:1. Letter appointing Trustees to the Bondholders;2. Debenture Trusteeship Agreement;3. Debenture/Bond Trust;4. Rating Agreement with Brickwork Ratings and SMERA Ratings;5. Tripartite Agreement between the Issuer; Registrar and NSDL for

issue of Bonds in dematerialized form;9. Tripartite Agreement between the Issuer, Registrar and CDSL for

issue of Bonds in dematerialized form;10. Letter appointing Registrar and MoU entered into between the Issuer

and the Registrar;11. Application made to BSE for seeking their in-principle approvalfor listing of Bonds;12. Listing Agreement with BSE;13. Letters appointing Arrangers to the Issue.

Events of Default ADDITIONAL COVENANTS1. Default in Payment:In case of default in payment of Interest and/or principal redemption on the duedates, additional interest of at least @ 2% p.a. over the coupon rate will be


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payable by the Bank for the defaulting period

2. Delay in ListingIn case of delay in listing of the debt securities beyond prescribed period from thedeemed date of allotment, the company will pay penal interest at the rate asmentioned in the relevant regulations.

Trustee IDBI Trusteeship Services LimitedRegistrars MCS Share Transfer Agent LimitedRole and Responsibilities ofDebenture Trustee

As may be specified in the Trusteeship Agreement to be executed by andbetween the Issuer and the Trustees.

Conditions precedent tosubscription of Bonds

The subscription from investors shall be accepted for allocation and allotment bythe Issuer subject to the following:1. Rating letters from Brickworks Ratings and SMERA Ratings not being morethan one month old from the issue opening date;2. Seek a written consent letter from the Trustees conveying their consent to actas Trustees for the Bondholders;3. Making an application to BSE for seeking their in-principle approval for listingof Bonds.

Conditions subsequent tosubscription of Bonds

The Issuer shall ensure that the following documents are executed/ activities arecompleted as per time frame mentioned elsewhere in this Private Placement OfferLetter:1. Ensuring that the payment made for subscription to the Bonds is from the

bank account of the person/ entity subscribing to the Bonds and keep record ofthe bank accounts from where payments for subscriptions have been receivedand in case of subscription to the Bonds to be held by joint holders, moniesare paid from the bank account of the person whose name appears first in theApplication Form;

2. Maintaining a complete record of private placement offers in Form PAS-5 andfiling the such record along with Private Placement Offer Letter in Form PAS-4with the Registrar of Companies, National Capital Territory of Delhi &Haryana with fee as provided in Companies (Registration Offices and Fees)Rules, 2014 and with Securities and Exchange Board of India, within a periodof thirty days of circulation of the Private Placement Offer Letter;

3. Filing a return of allotment of Bonds with complete list of all Bondholders inForm PAS-3under section 42(9) of the Companies Act, 2013, with theRegistrar of Companies, National Capital Territory of Delhi &Haryana withinthirty days of the Deemed Date of Allotment along with fee as provided in theCompanies (Registration Offices and Fees) Rules, 2014;

4. Credit of demat account(s) of the allottee (s) by number of Bonds allottedwithin two working days from the Deemed Date of Allotment*;

5. Making listing application to BSE within 15 days from the Deemed Date ofAllotment of Bonds and seeking listing permission within 20 days from theDeemed Date of Allotment of Bonds;

6. Executing the Debenture/Bond Trust in Form No.SH.12 or as near thereto aspossible, in favour of the Trustee within sixty days of Deemed Date ofAllotment of the Bonds and submit with BSE within five working days ofexecution of the same for uploading on their website.

Besides, the Issuer shall perform all activities, whether mandatory or otherwise,as mentioned elsewhere in this Private Placement Offer Letter.

Governing Law and Jurisdiction The Bonds are governed by and shall be construed in accordance with theexisting laws of India. Any dispute arising thereof shall be subject to thejurisdiction of district courts of New Delhi


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Mode Of Subscription

Applicants may make remittance of application money through either offollowing two modes:(i) Cheque(s)/ demand draft(s)/ bank funds transfer may be drawn in favour of

“Tourism Finance Corporation of India Limited” and marked “A/cPayee Only” payable at par at any of the CBS branches of the CollectingBankers to the Issue as per details given hereunder:Name of the collecting banker HDFC Bank LimitedCredit into Account No 00030350021737

(ii) Electronic transfer of funds through RTGS mechanism for credit as perdetails given hereunderName of the collecting banker HDFC Bank LimitedCredit into Current A/c No. 00030350021737IFSC Code HDFC0000003Address of the Branch K. G. Marg, New Delhi 110 001Narration Application Money for Bond Issue

* The Issuer reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule without giving anyreasons or prior notice. In such a case, investors shall be intimated about the revised time schedule by the Issuer. The Issueralso reserves the right to change and/or keep multiple Deemed Date(s) of Allotment at its sole and absolute discretion withoutany notice. In case if the Issue Closing Date/ Pay in Dates is/are changed (pre-poned/ postponed), the Deemed Date ofAllotment may also be changed (pre-poned/ postponed) by the Issuer at its sole and absolute discretion. Consequent to changein Deemed Date of Allotment, the Coupon Payment Dates and/or Redemption Date may also be changed at the sole andabsolute discretion of the Issuer.


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Illustration of Bond Cash Flows in respect of Series [MB 2015-01]

Company Tourism Finance Corporation Of India Limited

Face Value (per bond) Rs 1,00,000 per bond

Tenor 10 Years

Coupon Rate 8.81% p.a (payable semi annually)

Deemed date of allotment 09/11/2015

Frequency of Interest paymentFirst interest payment on 1 Jan 2016 andsubsequently on 1 Jan and 1 July semi annually tillmaturity

Redemption At the end of 10 years

Day count convention Actual/Actual

Cash Flows DateNo. of days in

Coupon periodAmount

(Rs)

1st Coupon 01-01-2016 53 1,276

2nd Coupon 01-07-2016 182 4,381

3rd Coupon 01-01-2017 184 4,441

4th Coupon 01-07-2017 181 4,369

5th Coupon 01-01-2018 184 4,441

6th Coupon 01-07-2018 181 4,369

7th Coupon 01-01-2019 184 4,441

8th Coupon 01-07-2019 181 4,369

9th Coupon 01-01-2020 184 4,429

10th Coupon 01-07-2020 182 4,381

11th Coupon 01-01-2021 184 4,441

12th Coupon 01-07-2021 181 4,369

13th Coupon 01-01-2022 184 4,441

14th Coupon 01-07-2022 181 4,369

15th Coupon 01-01-2023 184 4,441

16th Coupon 01-07-2023 181 4,369

17th Coupon 01-01-2024 184 4,429

18th Coupon 01-07-2024 182 4,381

19th Coupon 01-01-2025 184 4,441

20th Coupon 01-07-2025 181 4,369

21st Coupon 09-11-2025 131 3,162

Total Interest 3653 88,109

Principal 1,00,000

Total 1,88,109


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NOTES Effect of public holidays has been ignored as these are difficult to ascertain for future period. If the interest payment date is falling on a Sunday, the next day has been considered as the effective interest payment

date. Deemed date of allotment has been assumed to be 9th November 2015. The actual date of allotment may differ at the

sole and absolute discretion of the issuer.

The number of days in a leap year has taken as 366 and all other case it has been taken as 365.

The above cash flow has been made for illustration purpose only.


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XI. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OFISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGESWHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIODOF MATURITY, FACE VALUE, ISSUE PRICE, EFFECTIVE YIELD FOR INVESTORS)

Eligibility ofTFCI to come out with the Issue

Tourism Finance Corporation of India Ltd, its Directors and authorised Officers have not been prohibited fromaccessing the debt market under any order or directions passed by SEBI/any other Government authority.

Issue Size

Tourism Finance Corporation of India Ltd. proposes to raise Rs. 100 crore (with an option to retainoversubscription) through issue of secured, redeemable, non-convertible, taxable bonds in the nature of PromissoryNotes of the face value of Rs. 1 Lakh each by way of private placement.

Time Schedule of the Private Placement Offer Letter

Issue Opening Date*: 19thOctober, 2015

Issue Closing Date*: 09thNovember, 2015

Pay-In Dates*: 19thOctober, 2015 to 09th November, 2015

Deemed Date of Allotment*: [November 9, 2015]

* The Issuer reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule without giving anyreasons or prior notice. In such a case, investors shall be intimated about the revised time schedule by the Issuer. The Issueralso reserves the right to change and/or keep multiple Deemed Date(s) of Allotment at its sole and absolute discretion withoutany notice. In case, if the Issue Closing Date/ Pay in Dates is/are changed (pre-poned/ postponed), the Deemed Date ofAllotment may also be changed (pre-poned/ postponed) by the Issuer at its sole and absolute discretion. Consequent to changein Deemed Date of Allotment, the Coupon Payment Dates and/or Redemption Date may also be changed at the sole andabsolute discretion of the Issuer.

Registration and Government Approvals

This present issue of Bonds is being made in accordance with extant guidelines for floatation of PSU Bonds asamended from time to time. The Company can undertake the activities proposed by it in view of the presentapprovals and no further approval from any government authority (ies) is required by the Company to undertake theproposed activities save and except those approvals which may be required to be taken in the normal course ofbusiness from time to time.

Contribution made by Promoters or Directors

NIL

Principle terms of assets charged as security

The Bonds have been secured by way of first pari-passu charge on the book debts of the Issuer which are charged toother lender / trustee and as may be agreed between the Issuer and the Trustee, pursuant to the terms of theDebenture/Bond Trust Deed with a minimum security cover of one time of the aggregate face value amount ofBonds outstanding at all times.

The company hereby confirms that it is entitled to raise money through current issue of Bonds and has obtained theconsent/ permission/ approval from the Trustees/ Lenders of Tourism Finance Corporation of India Ltd in case thesame is required.


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Authority for the Placement

The present issue of Bonds is being made pursuant to:

a. resolution passed by the Board of Directors of the Company on May 8, 2015 and delegation provided thereunder; and

b. special resolution passed by the shareholders of the Company under section 42 of The Companies Act,2013 and sub-rule 2 of rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, onSeptember 21, 2015 and delegation provided there under.

Objects of the Issue

The funds being raised by the Issuer through present issue of Bonds are not meant for financing any particularproject. The Issuer shall utilise the proceeds of the Issue for its regular business activities and other associatedbusiness objectives such as discharging existing debt obligations which were generally undertaken for businessoperations.

The main object clause of the Issuer as contained in its Memorandum of Association and Articles of Associationenables it to undertake the activities for which the funds are being raised through the present Issue of Bonds. Also,the main objects of the Issuer as contained therein, adequately cover its existing and proposed activities.

Utilisation of Issue ProceedsThe funds being raised by the Issuer through present issue of Bonds are not meant for financing any particularproject. The Issuer shall utilise the proceeds of the Issue for its regular business activities and other associatedbusiness objectives such as discharging existing high cost debt obligations which were generally undertaken forbusiness operations. The Issuer is subject to a number of regulatory checks and balances as stipulated in itsregulatory environment. The Issuer is managed by professionals under the supervision of the Board of Directors.The management of the Issuer shall ensure that the funds raised via the present Issue shall be utilized only towardssatisfactory fulfilment of the Objects of the Issue.

The Issuer undertakes that proceeds of the present Issue shall not be used for any purpose which may be incontravention of the regulations/ guidelines/ norms issued by the RBI/ SEBI/ RoC/ Stock Exchange(s).

In accordance with the SEBI Debt Regulations, the Issuer undertakes that it shall not utilise the proceeds of the Issuefor providing loan to or acquisition of shares of any person who is part of the same group or who is under the samemanagement. The Issue proceeds shall not be utilised towards full or part consideration for the purchase or anyacquisition, including by way of a lease, of any property.

Further, the Issuer undertakes that Issue proceeds from the present issue of Bonds allotted to banks shall not be usedfor any purpose which may be in contravention of the RBI guidelines on bank financing to NBFCs including thoserelating to classification as capital market exposure or any other sectors that are prohibited under the RBIregulations.

The main objects clause of the Memorandum of Association of the Issuer permits it to undertake its existingactivities as well as the activities for which the funds are being raised through the present Bond Issue.

Minimum Subscription

As the current issue of Bonds is being made on private placement basis, the requirement of minimum subscriptionshall not be applicable and therefore TFCI shall not be liable to refund the issue subscription(s)/ proceed(s) in theevent of the total issue collection falling short of issue size or certain percentage of issue size.

Nature of Securities

Secured, Redeemable, Non-Convertible, Taxable Bonds in the nature of Promissory Notes. These Bonds shall befully paid-up.


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Put & Call Option

Neither the Bondholder(s) shall have any right to exercise Put option nor shall the Company have right to exerciseCall Option.

Maximum Investors for the Issue

In accordance with the RBI Circular No RBI/2014-15/475/DNBR (PD) CC No. 021/03.10.001/2014-15

Issue Price

Each Bond has a face value of INR1 Lakh each and is issued at par. The Bonds shall be redeemable at par i.e. forINR1 Lakh per Bond. Since the frequency of interest payment is semi annual, the effective yield for the investorsshall be 9% per annum

SecurityThe Bonds shall be secured by way of first pari passu charge on the book debts of the Issuer which are charged toother lender / trustee and as may be agreed between the Issuer and the Trustee, pursuant to the terms of theDebenture/Bond Trust Deed with a minimum security cover of one time of the aggregate face value amount ofbonds outstanding at all times.

The Issuer undertakes that it has obtained requisite permission/ consent from the earlier creditor(s)/trustees to createpari-passu charge and execute the necessary documents for creation of the charge, including the Bond Trust Deed,within sixty days of Deemed Date of Allotment of the Bonds and submit with BSE within five working days ofexecution of the same for uploading on its website. The creation of such security shall be sufficient compliance ofthe Issuer’s obligation to create security. In the event of delay in execution of the Debenture/Bond Trust Deed withinsixty days of Deemed Date of Allotment of the Bonds, the Company shall refund the subscription with the CouponRate or pay penal interest at the rate of 2.00% p.a. over the Coupon Rate till these conditions are complied with, atthe option of the Bondholders.

Terms of Payment

The full Issue price of the Bonds applied for is to be paid along with the Application Form. Investor(s) need to sendin the Application Form and the cheque(s)/ demand draft(s)/ RTGS for the full face value of the Bonds applied for.

Issue Price of the Bond Minimum Application for Amount Payable on Application per BondINR1 Lakh 100 Bond and in multiples

of 1 Bond thereafterFull Issue Price i.e. INR1 Lakh

Deemed Date of Allotment

The cut-off date declared by the Company from which all benefits under the Bonds including interest on the Bondsshall be available to the Bondholders. The actual allotment of Bonds (i.e. approval from the Board of Directors or aCommittee thereof) may take place on a date other than the Deemed Date of Allotment.TFCI reserves the right tochange and / or keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretionwithout any notice.In case, the issue closing date is changed (i.e. pre-pond/ postponed), the Deemed Date of Allotment may also bechanged (pre-pond/ postponed) by TFCI at its sole and absolute discretion.

Letter(s) of Allotment/ Bond Certificate(s)/ Refund Order(s) Issue of Letter(s) of Allotment

The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL)/ Central DepositoryServices (India) Ltd. (CDSL)/ Depository Participant will be given initial CREDIT within 2 working days from theDeemed Date of Allotment. The initial CREDIT in the account will be akin to the Letter of Allotment. Oncompletion of the all-statutory formalities, such CREDIT in the account will be akin to a Bond Certificate.


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Bonds to be issued in demat format only

The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of the DepositoryAct, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notifiedby NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respectthereof. The Bonds shall be allotted in DEMAT form only. However, if any Bondholder wants to covert bonds intophysical form he/she make appropriate application to the Depositories as per relevant rules and regulations ofconcerned Depository.

Depository Arrangements

TFCI has entered into depository arrangements with NSDL and CDSL. The securities shall be issued indematerialized form as per the provisions of Depositories Act, as amended from time to time.

TFCI has signed two tripartite agreements in this connection viz.

1. Tripartite Agreement between TFCI, National Securities Depository Limited (NSDL) and the Registrar.2. Tripartite Agreement between TFCI, Central Depository Services Limited (CDSL)and the Registrar.

The Bonds will be issued in dematerialised form and the same shall be in accordance with the provisions of theSEBI Debt Regulations, Depositories Act, 1996 and the regulations made there under and are to be issued as per theterms and conditions stipulated under the Private Placement Offer Letter. The BOND holder will have the right toconvert the dematerialized Bonds into physical form as per the Applicable Law.

Procedure for applying for Demat Facility

1. Investor(s) should have / open a beneficiary account with any Depository Participant of NSDL or CDSL.

2. For allotment of Bonds in dematerialized form, the beneficiary account number and depository participantsID shall be specified in the relevant columns of the Application Form.

3. If incomplete/incorrect beneficiary account details are given in the Application Form which do not matchwith the details in the Depository system, the Allotment of Bonds shall be held in abeyance till such timesatisfactory Demat account details are provided by the investor.

4. The Bonds allotted to investor in dematerialized form would be directly credited to the beneficiary accountas given in the Application Form after verification. Allotment advice/refund order (if any) would be sentdirectly to the applicant by the Registrar to the Issue but the confirmation of the CREDIT of the Bonds tothe investor’s Depository Account will be provided to the investor by the investor’s Depository Participant.

5. Interest or other benefits with respect to the Bonds held in dematerialized form would be paid to thoseBondholders whose names appear on the list of beneficial owners given by the depositories to TFCI as onthe Record Date or to the Bondholders who have converted the demat securities to physical form and theirnames are registered as Bondholders on the registers maintained by Company/Registrar. In case, thebeneficial owner is not identified by the Depository on the Record Date due to any reason whatsoever,TFCI shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner isidentified by the Depository and intimated to TFCI. On receiving such intimation, TFCI shall pay theinterest or other benefits to the beneficiaries identified, within a period of 15 days from the date ofreceiving such intimation.

6. Investors may please note that the Bonds in dematerialised form can be traded only on the stock exchangeshaving electronic connectivity with NSDL or CDSL.

Fictitious applications

Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of section 38 of theCompanies Act, 2013 which is reproduced below:

“Any person who—


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(a) makes or abets making of an application in a fictitious name to a company foracquiring, or subscribing for, its securities; or

(b) makes or abets making of multiple applications to a company in different names or indifferent combinations of his name or surname for acquiring or subscribing for itssecurities; or

(c) otherwise induces directly or indirectly a company to allot, or register any transferof, securities to him, or to any other person in a fictitious name.

shall be liable for action under section 447.”

Market Lot

The market lot for trading of Bonds will be one Bond (“Market Lot”).

Trading of BondsThe marketable lot for the purpose of trading of Bonds shall be ONE BOND. Trading of Bonds would be permittedin dematerialised mode only in standard denomination of INR1 Lakh and such trades shall be cleared and settled inrecognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has beenmade over the counter, the trades shall be executed and reported on a recognized stock exchange having a nation-wide trading terminal or such other platform as may be specified by SEBI.

Mode of Transfer of Bonds

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respectthereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed fortransfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of thebuyer’s DP account to his Depository Participant.

Transfer of Bonds to and from foreign investors, in case they seek to hold the Bonds and are eligible to do so, willbe governed by the then prevailing guidelines of RBI. The transferee(s) should ensure that the transfer formalitiesare completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made tothe person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s)would need to be settled with the transferor(s) and not with TFCI.

Interest on Application Money

In respect of Investors who get Allotment of Bonds in the Issue, interest on Application Money shall be paid at theCoupon Rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any otherstatutory modification or re-enactment thereof, as applicable) on the aggregate face value amount of Bonds for theperiod starting from and including the date of realization of Application Money in Issuer’s Bank Account upto butexcluding the Deemed Date of Allotment*. Such interest on Application Money shall be paid by the Issuer to therelevant Applicants within 15 days from the Deemed Date of Allotment*.

Interest on the Bonds

The Bonds shall carry interest at the coupon rates as per term sheet (subject to deduction of tax at source at the ratesprevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modificationor re-enactment thereof for which a certificate will be issued by TFCI) on the outstanding principal amount of Bondstill final redemption. Interest will be paid annually on [1st January and 1st July] each year throughout the tenure ofthe Bonds till final redemption. The first interest payment from and including the Deemed Date of Allotment uptobut excluding the date of payment shall be made by TFCI on [1st January, 2016]. Interest on Bonds will cease fromthe date of final redemption in all events.


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If any interest payment date falls on a day which is not a Business Day (‘Business Day’ being a day on whichCommercial Banks are open for business in the city of New Delhi), then payment of interest will be made on thenext day that is a Business Day but without liability for making payment of interest for the intervening period.

Computation of Interest

The Bonds will carry interest rates as per the term sheet from the Deemed Date of Allotment. The interest will bepaid from the Deemed Date of Allotment (subject to deduction of tax at source at the rates prevailing from time totime under the IT Act, or any other statutory modification or re-enactment thereof) as per term sheet. The Interestshall be computed on “Actual / Actual” day count basis.

Record Date

Record date of interest shall be 15 days prior to each interest payment date and 15 days prior to the date of Maturity.Interest shall be paid to the person whose name appears as sole/first in the Register of Bondholders/beneficiariesposition of the Depositories on Record Date or to the Bondholders who have converted the Bonds to physical formand their name is registered on the registers maintained by Company/Registrar. In the event of TFCI not receivingany notice of transfer at least 15 days before the respective due date of payment of interest and at least 15 days priorto the maturity date, the transferees for the Bond shall not have any claim against TFCI in respect of interest so paidto the registered Bondholder.

Deduction of Tax at Source

Tax as applicable under the IT Act, or any other statutory modification or re-enactment thereof will be deducted atsource. The investor(s) desirous of claiming exemption from deduction of income tax at source on the interest onApplication money are required to submit the necessary certificate(s), in duplicate, along with the Application Formin terms of Income Tax rules.

Interest payable subsequent to the Deemed Date of Allotment of Bonds will be treated as “Interest on Securities” asper Income Tax Rules. Bondholders desirous of claiming exemption from deduction of income tax at source on theinterest payable on Bonds should submit tax exemption certificate/ document, under Section 193 of the Income TaxAct, 1961, if any, at the head office of TFCI, at least 45 days before the payment becoming due.

Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors areadvised to consult their own tax consultant(s). FII’s will be subject to withholding tax as applicable under section195 of the Income Tax Act, 1961.

Redemption

The face value of the Bonds will be redeemed at par, on the expiry of the tenor of the Bonds series as per details inthe summary term sheet, from the Deemed Date of Allotment. The Bonds will not carry any obligation, for interestor otherwise, after the date of redemption. The Bonds shall be taken as discharged on payment of the redemptionamount by TFCI on maturity to the registered Bondholders whose names appear in the Register of Bondholders onthe Record Date/ or the beneficial owners as per the list provided by the Depositories. Such payment will be a legaldischarge of the liability of the Company towards the Bondholders.

In case if the redemption date falls on a day which is not a Business Day (“Business Day being a day on whichCommercial Banks are open for Business in the city of Delhi), then the payment due shall be made on the nextBusiness Day but without liability for making payment of interest for the intervening period.

Settlement/ Payment on Redemption

Payment on redemption will be made by way of cheque(s)/ redemption warrants(s)/ demand draft(s)/ CREDITthrough RTGS system in the name of the Bondholders whose name appear on the list of Beneficial Owners given byDepository to TFCI/or the Bond holders (who have converted the Bonds to physical form), whose names areregistered on the register maintained by the TFCI/Registrar as on the Record Date.

The Bonds shall be taken as discharged on payment of the redemption amount by TFCI on maturity to the list of


50

Bondholders as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of theliability of Tourism Finance Corporation of India Ltd towards the Bondholders. On such payment being made, TFCIshall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/CDSL/ Depository Participant shall be adjusted.

TFCI’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and standextinguished from the due date of redemption in all events. Further TFCIwill not be liable to pay any interest orcompensation from the date of redemption. On TFCI dispatching/ crediting the amount to the Beneficiary (ies) asspecified above in respect of the Bonds, the liability of TFCI shall stand extinguished.

Right of Bondholder(s)

Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege ofshareholders other than those available to them under statutory requirements. The Bond(s) shall not confer upon theholders the right to receive notice, or to attend and vote at the General Meeting of the Company. The principalamount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to theone whose name stands first.

Besides the above, the Bonds shall be subject to the provisions of the Companies Act, Companies Act, 2013 and therelevant rules and regulations, the Articles of Association of TFCI, the terms of this issue of Bonds and the otherterms and conditions as may be incorporated in the Bond Trustee Agreement and other documents that may beexecuted in respect of these Bonds.

Effect of HolidaysIf any Coupon Payment Date falls on a day which is not a Business Day, payment of interest will be made on nextBusiness Day without liability for making payment of interest for the delayed period.

In case if the Redemption Date falls on a day which is not a Business Day, then the payment due shall be made onthe next Business Day.

In the event the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Daywill be considered as the Record Date.

List of Beneficial Owners

TFCI shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shallbe the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

Succession

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for thetime being, TFCI will recognize the executor or administrator of the deceased Bondholder, or the holder ofsuccession certificate or other legal representative as having title to the Bond(s). TFCIshall not be bound torecognize such executor or administrator, unless such executor or administrator obtains probate, wherever it isnecessary, or letter of administration or such holder is the holder of succession certificate or other legalrepresentation, as the case may be, from a Court in India having jurisdiction over the matter. TFCI.may, in itsabsolute discretion, where it thinks fit, dispense with production of probate or letter of administration or successioncertificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing inthe name of the deceased Bondholder on production of sufficient documentary proof or indemnity.


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Who Can Apply

Eligible Investors 1. Qualified Institutional Buyers (“QIBs”):a. Mutual Funds,b. Public Financial Institutions specified in Section 2(72) of the Companies

Act 2013;c. Scheduled Commercial Banks;d. State Industrial Development Corporations;e. Insurance Companies registered with the Insurance Regulatory and

Development Authority;f. Provident Funds and Pension Funds with minimum corpus of Rs. 25.00

crore;g. National Investment Funds set up by resolution no. F. No. 2/3/2005-

DDII dated November 23, 2005 of the Government of India published inthe Gazette of India;

h. Insurance funds set up and managed by army, navy or air force of theUnion of India.

2. Non QIBs:a) Companies and Bodies Corporate authorized to invest in bonds/

debentures;b) Co-operative Banks and Regional Rural Banks authorized to invest in

bonds/ debentures;c) Gratuity Funds and Superannuation Funds;d) Provident Funds and Pension Funds with corpus of less than Rs. 25.00

crore;e) Societies authorized to invest in bonds/ debentures;f) Trusts authorized to invest in bonds/ debentures;g) Statutory Corporations/ Undertakings established by Central/ State

legislature authorized to invest in bonds/ debentures;

Non-Eligible classes ofInvestors

The following categories of persons, and entities, shall not be eligible toparticipate in the Issue and any Applications from such persons and entities areliable to be rejected:

a) Minors without a guardian name (A guardian may apply on behalf of aminor. However, Applications by minors must be made throughApplication Forms that contain the names of both the minor Applicant andthe guardian);

b) Non-resident investors including NRIs, FIIs, QFIs, FPIs and SWFs;c) Venture Capital Fund and Foreign Venture Capital Investor;d) Overseas Corporate Bodies; ande) Person ineligible to contract under applicable statutory/regulatory

requirements.f) Hindu Undivided Families through Karta;g) Partnership firms formed under applicable laws in India in the name of the

partners.h) Resident Individual Investors


52

Credit Rating(s)“BWR AA (Outlook Stable)” by BRICKWORK &“SMERA AA (Outlook Stable)” by SMERA

Further, it is clarified that the Bonds issued under this Private Placement Offer Letter (PPOL) do not carry any creditrating other than the above mentioned Credit Ratings.

Application under Power of Attorney or by Limited Companies

In case of Applications made under a Power of Attorney or by a Limited Company or a Body Corporate orRegistered Society or Mutual Fund, and scientific and/or industrial research organizations or Trusts etc, the relevantPower of Attorney or the relevant resolution or authority to make the Application, as the case may be, together withthe certified true copy thereof along with the certified copy of the Memorandum and Articles of Association and/orBye-Laws as the case may be must be attached to the Application Form or lodged for scrutiny separately with thephotocopy of the Application Form, quoting the serial number of the Application Form and TFCI’s branch wherethe Application has been submitted, at the office of the Registrars to the Issue after submission of the ApplicationForm to TFCI’s bankers to the Issue or any of their designated branches as mentioned on the reverse of theApplication Form, failing which the applications are liable to be rejected. Such authority received by the Registrarsto the Issue more than 10 days after closure of the subscription list may not be considered.

Mode of Subscription / How to Apply

This being a Private Placement Offer, Investors have been addressed through this Communication directly, only areeligible to apply.

Copies of Private Placement Offer Letter and Application Form may be obtained from the registered office of TFCI.Applications for the Bonds must be in the prescribed form (enclosed) and completed in BLOCK LETTERS inEnglish and as per the instructions contained therein.

Applications complete in all respects must be submitted before the last date indicated in the issue time table or suchextended time as decided by TFCI, at any of the designated collection centres, accompanied by the subscriptionamount by way of cheque(s)/draft(s)/RTGS drawn on any bank including a co-operative bank which is situated atand is a member of the Bankers’ clearing house located at a place where the Application Form is submitted. TheOriginal Applications Forms (along with all necessary documents as detailed in the memorandum of information),pay-in slip and other necessary documents should be sent to corporate office through respective Arrangers at NewDelhi on the same date.

Outstation cheque(s)/Bank draft(s) drawn on Bank(s) not participating in the clearing process at the designatedclearing centres will not be accepted. Money orders/postal orders will also not be accepted. Investors in centres,which do not have any bank, including a Co-operative Bank, which is a member or sub member of the Banker’sclearing house located at the above mentioned centres would be required to make payment only through DemandDraft payable at any one of the above mentioned centres. The Company assumes no responsibility for anyapplications/cheques/ DDs lost in mail. All cheques /drafts should be in favour of “Tourism Finance CorporationOf India Limited” and Crossed “Account Payee only”. The entire amount of `1 Lakh (Rupee One Lakh only) perbond is payable on application subject to minimum application of Rs.1 Crore (for 100 bonds).

Applications should be for the number of Bonds applied for, by the Applicant. Applications not completed in thesaid manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must befilled in the Application Form. This is required for the applicant’s own safety and these details will be printed on therefund orders and interest/ redemption warrants.

The applicant or in the case of an application in joint names, each of the Applicant, should mention his/herPermanent Account Number (PAN) allotted under the Income-Tax Act, 1961 or where the same has not beenallotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A (5A) of theIncome Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the investor should mentionhis PAN/GIR No. In case neither the PAN nor the GIR Number has been allotted, the Applicant shall mention“Applied for” and in case the applicant is not assessed to income tax, the applicant shall mention ‘Not Applicable’


53

(stating reasons for non-applicability) in the appropriate box provided for the purpose. Application Forms withoutthis information will be considered incomplete and are liable to be rejected.

Unless the Issuer Company specifically agrees in writing with or without such terms or conditions it deems fit, aseparate single cheque/ demand draft must accompany each Application Form. Applicants are requested to writetheir names and application serial number on the reverse of the instruments by which the payments are made.

All Applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/Private/ Religious/ Charitable Trusts, Provident Funds and Other Superannuation Trusts and other investorsrequiring “approved security” status for making investments.

It is to be distinctly noted that in pursuance of sub clause (d) of clause (2) of Rule 14 of Companies (Prospectus andAllotment of Securities) Rules, 2014, remittance of Application Money for subscription to the Bonds shall be madeonly from the bank account of the person/ entity subscribing to the Bonds. In case of monies payable on subscriptionto the Bonds to be held by joint holders, the remittance of Application Money shall be made from the bank accountof the person whose name appears first in the Application Form. In pursuance of the said provisions, the Applicantsare required to submit a self-attested copy of their bank account statement reflecting debit for the application money.Such bank account statement must contain the name of Applicant, account number, name and branch of the bank.

For further instructions, please read General Instructions along with the Application Form carefully.

Force Majeure

TFCI reserves the right to withdraw the Issue prior to the closing date in the event of any unforeseen developmentadversely affecting the economic and regulatory environment. TFCI reserves the right to change the Issue schedule.

Acknowledgements

No separate receipts will be issued for the application money. However, the bankers to the Issue receiving the dulycompleted Application Form will acknowledge receipt of the application by stamping and returning to the applicantthe ‘Acknowledgement Slip’at the bottom of each Application Form.

Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names andspecimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must belodged along with the submission of the completed Application Form. Further modifications/ additions in the powerof attorney or authority should be notified to the Company or to its Registrars or to such other person(s) at suchother address(es) as may be specified by the Company from time to time through a suitable communication.

Application by Mutual Funds

In case of Applications by Mutual Funds, a separate Application must be made in respect of each scheme of anIndian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, providedthat the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention asto the scheme for which the Application has been made.

Right to Accept or Reject Applications

TFCI reserves its full, unqualified and absolute right to accept or reject any Application, in part or in full, withoutassigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable,to be sent. The Application forms that are not complete in all respects are liable to be rejected and would not be paidany interest on the Application money. Application would be liable to be rejected on one or more technical grounds,including but not restricted to:


54

a. Number of Bonds applied for is less than the minimum application size;

b. Applications exceeding the issue size;

c. TFCI account details not given;

d. Details for issue of Bonds in electronic/ Dematerialized form not given; PAN/GIR and ITCircle/Ward/District not given;

e. In case of Applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevantdocuments not submitted;

In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds willbe refunded, as may be permitted.

PAN/GIR Number

All Applicants should mention their PAN or the GIR Number allotted under I T Act, and the Income Tax Circle/Ward/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.

Signatures

Signatures should be made in English or in any of the Indian languages. Thumb impressions must be attested by anauthorized official of a TFCI or by a Magistrate/ Notary Public under his/her official seal.

Nomination Facility

As per Section 72 of the Companies Act, 2013, only individuals applying as sole applicant/Joint Applicant cannominate, in the prescribed manner, a person to whom his Bonds shall vest in the event of his death. Non-individuals including holders of Power of Attorney cannot nominate.

Bondholder not a Shareholder

The Bondholders will not be entitled to any of the rights and privileges available to the shareholder. If, however, anyresolution affecting the rights attached to the Bonds is placed before the members of TFCI, such resolution will firstbe placed before the Bondholders for their consideration.

Modification of Rights

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with theconsent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of theBonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided thatnothing in such consent or resolution shall be operative against TFCI where such consent or resolution modifies orvaries the terms and conditions of the Bonds, if the same are not acceptable to TFCI.

Future Borrowings

TFCIshall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change itscapital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, onsuch terms and conditions as TFCI may think appropriate, without the consent of, or intimation to, theBondholder(s) or the Trustees in this connection.

Ranking of Bonds

The Bonds would constitute direct obligation of our Company and shall rank paripassu to the claims of the othersecured creditors of the Company secured against the same assets, subject to applicable laws.


55

Bond/ Debenture Redemption Reserve

As per the Companies (Share Capital and Debentures) Rules,2014, DRR is not required to be created in the case ofprivately placed debentures issued by NBFC’s registered with the RBI under section 45-IA of the RBI ( Amendment) Act, 1997

Notices

All notices required to be given by TFCI or by the Bond Trustees to the Bondholders shall be deemed to have beengiven if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one AllIndia English daily newspaper and one regional language newspaper.

All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and“Payment on Redemption” shall be sent by registered post or by hand delivery to TFCI or to such persons at suchaddress as may be notified by TFCI from time to time.

Tax Benefits to the Bondholders of Tourism Finance Corporation of India Limited

The holder(s) of the Bonds are advised to consider in their own case, the tax implications in respect of subscriptionto the Bonds after consulting their own tax advisor/ counsel.

Disputes & Governing Law

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arisingthereof will be subject to the jurisdiction of courts of New Delhi.

Investor Relations and Grievance Redressal

Arrangements have been made to redress investor grievances expeditiously as far as possible, TFCI endeavours toresolve the investors' grievances within 30 days of its receipt. All grievances related to the issue quoting theApplication Number (including prefix), number of bonds applied for, amount paid on application and Bank andBranch/TFCI collection centre where the Application was submitted, may be addressed to the ResourceMobilization Unit at the Head office. All investors are hereby informed that the Company has appointed aCompliance Officer who may be contracted in case of any problem related to this issue.


56

XII. CREDIT RATING & RATIONALE THEREOF

As Per Annexure


57

XIII. NAME OF BONDTRUSTEE

In accordance with the provisions of Section 71 of the Companies Act, 2013, Companies (Share Capital andDebentures) Rules 2014 and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993,Tourism Finance Corporation of India Ltd has appointed IDBI Trusteeship Services Limited to act as BondTrustee (“Bond Trustee”) for and on behalf of the holder(s) of the Bonds. The address and contact details of theTrustees are as under:

IDBI Trusteeship Services LimitedAsian Building, Ground Floor.Block, 17,RKamani Marg,Mumbai - 400001

Tel: 022 – 40807003Fax: 022– 66311776Email: [email protected] Registration Number: IND000000460

A copy of letter from IDBI Trusteeship Services Limited conveying their consent to act as Bond Trustee for thecurrent issue of Bonds is enclosed elsewhere in this Private Placement Offer Letter.

Tourism Finance Corporation of India Ltd hereby undertakes that the rights of the Bondholders will be protected asper the agreement/deed executed/to be executed between Tourism Finance Corporation of India Ltd and the BondTrustee. The Bond Trustee Agreement/Deed shall contain such clauses as may be prescribed under section 71 of theCompanies Act, 2013,Companies (Share Capital and Debentures) Rules, 2014 and those mentioned in Schedule IVof the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further the Bond TrusteeAgreement/Deed shall not contain any clause which has the effect of (i) limiting or extinguishing the obligations andliabilities of the Bond Trustee or Tourism Finance Corporation of India Ltd in relation to any rights or interests ofthe holder(s) of the Bonds, (ii) limiting or restricting or waiving the provisions of the SEBI Act; SEBI DebtRegulations and circulars or guidelines issued by SEBI, (iii) indemnifying the Trustees or Tourism FinanceCorporation of India Ltd for loss or damage caused by their act of negligence or commission or omission.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the BondTrustee or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of orrelating to the Bonds as the Bond Trustee may in their absolute discretion deem necessary or require to be done inthe interest of the holder(s) of the Bonds. Any payment made by Tourism Finance Corporation of India Ltdto theBond Trustee on behalf of the Bondholder(s) shall discharge Tourism Finance Corporation of India Ltdpro tanto tothe Bondholder(s). The Bond Trustee shall protect the interest of the Bondholders in the event of default by TourismFinance Corporation of India Ltd in regard to timely payment of interest and repayment of principal and shall takenecessary action at the cost of Tourism Finance Corporation of India Ltd. No Bondholder shall be entitled toproceed directly against Tourism Finance Corporation of India Ltd unless the Bond Trustee, having become sobound to proceed, fail to do so. In the event of Tourism Finance Corporation of India Ltddefaulting in payment ofinterest on Bonds or redemption thereof, any distribution of dividend by Tourism Finance Corporation of India Ltdshall require approval of the Bond Trustee.


58

XIV. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED

The Secured, Redeemable, Non-Convertible, Bonds in the nature of Promissory Notes (“Bonds”) (Series[MB 2015-01) are proposed to be listed on the Wholesale Debt Market (WDM) Segment of the BSE.Tourism FinanceCorporation of India Ltd shall make an application to the BSE to list the Bonds to be issued and allotted under thisPrivate Placement Offer Letter and complete all the formalities relating to listing of the Bonds within stipulated time(as per applicable law) from the date of closure of the Issue. If the permission to list and trade the Bonds is notgranted by the stock exchanges, our Company shall forthwith repay, without interest, all such moneys received fromthe Applicant in pursuance of this Private Placement Offer Letter and Section 40 of the Companies Act, 2013. Ifdefault is made, our Company and every officer in default will liable to fine as prescribed in Section 40 of theCompanies Act, 2013.

In connection with listing of Bonds with BSE, Tourism Finance Corporation of India Ltd hereby undertakes that:

(a) It shall comply with conditions of listing of Bonds as may be specified in the Listing Agreement with BSE.

(b) Ratings obtained by Tourism Finance Corporation of India Ltd shall be periodically reviewed by theCREDIT rating agencies and any revision in the rating shall be promptly disclosed byTourism FinanceCorporation of India Ltd. to BSE.

(c) Any change in rating shall be promptly disseminated to the holder(s) of the Bonds in such manner as BSEmay determine from time to time.

(d) Tourism Finance Corporation of India Ltd, the Bond Trustee and BSE shall disseminate all information andreports on Bonds including compliance reports filed by Tourism Finance Corporation of India Ltdand theTrustees regarding the Bonds to the holder(s) of Bonds and the general public by placing them on theirwebsites.

(e) Bond Trustee shall disclose the information to the holder(s) of the Bonds and the general public by issuinga press release in any of the following events:

(i) default by Tourism Finance Corporation of India Ltd to pay interest on Bonds or redemptionamount;

(ii) revision of rating assigned to the Bonds;

(f) The information referred to in para(e) above shall also be placed on the websites of the Trustees, TourismFinance Corporation of India Ltd, BSE.

XV. DEBT EQUITY RATIO

1. Debt - Equity RatioParticulars Pre-Issue Post-Issue

Debt

Short Term Debt Nil Nil

Long Term Debt 956.50 1056.50

Total Debt (A) 956.50 1056.50

Equity

Share Capital 80.72 80.72

Reserves & Surplus 398.38 398.38

Total Equity (B) 479.10 479.10

Debt/Equity (A/B) 2:1 2.21:1


59

XVI. SERVICING BEHAVIOUR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS

Tourism Finance Corporation of India Ltd hereby confirms that:

a) The main constituents of Tourism Finance Corporation of India Ltd’s borrowings have been in the form ofborrowings from Banks and Financial Institutions, Bonds etc.

b) Tourism Finance Corporation of India Ltd has been servicing all its principal and interest liabilities on timeand there has been no instance of delay or default since inception.

c) Tourism Finance Corporation of India Ltd has neither defaulted in repayment/ redemption of any of itsborrowings nor affected any kind of roll over against any of its borrowings in the past.

XVII. UNDERTAKING REGARDING COMMON FORM OF TRANSFER

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by theNSDL/CDSL/Depository Participant of the transferor/ transferee and any other applicable laws and rules notified inrespect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall befollowed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containingdetails of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transferformalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption willbe made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by thetransferee(s) would need to be settled with the transferor(s) and not with Tourism Finance Corporation of India Ltd.

Tourism Finance Corporation of India Ltd undertakes that it shall use a common form/ procedure for transfer ofBonds issued under terms of this Private Placement Offer Letter.

XVIII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OFTHE ISSUER

By very nature of its business, Tourism Finance Corporation of India Ltdis involved in a large number oftransactions involving financial obligations and therefore it may not be possible to furnish details of all materialcontracts and agreements involving financial obligations of Tourism Finance Corporation of India Ltd. However, thecontracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carriedon by Tourism Finance Corporation of India Ltd) which are or may be deemed to be material have been entered intoby Tourism Finance Corporation of India Ltd. Copies of these contracts together with the copies of documentsreferred to in Para B may be inspected at the Head Office of Tourism Finance Corporation of India Ltdbetween10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

MATERIAL DOCUMENTS

1. Memorandum and Articles of Association of the Company, as amended to date.

2. Certificate of Incorporation dated3. Copy of shareholders resolution obtained for overall borrowing limit.4. Credit Rating letters issued by Brickwork Ratings and SMERA Ratings.5. Consents of Registrar to the Issue, Bankers to the Issue, Trustee for the Bonds, and the Credit Rating

Agencies.6. Auditor’s Report and financial statements for the financial year March 31, 2012, 2013, 2014 and 2015.7. Annual Report of the Company for the last three Fiscals.8. Board Resolution dated May 8, 2015 authorizing issue of Bonds offered on private placement basis.9. Letter of consent from IDBI Trusteeship Services Limited.for acting as Trustees for and on behalf of the

holder(s) of the Bonds.10. Letter of consent from MCS Share Transfer Agent Ltd. for acting as Registrars to the Issue.11. Tripartite Agreement between Tourism Finance Corporation of India Ltd, NSDL and MCS Share Transfer

Agent Ltd. for issue of Bonds in Dematerialized form.12. Tripartite Agreement between Tourism Finance Corporation of India Ltd, CDSL and MCS Share Transfer

Agent Ltd for issue of Bonds in Dematerialized form.13. Bond Trustee Agreement between the Company and Bond Trustee.14. Bond Trust Deed in favour of Trustee.


60

XIX DECLARATION

It is hereby declared that this Private Placement Offer Letter contains full disclosures in conformity with PAS-4prescribed under Section 42 and rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014,Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued videCircular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended, Securities and Exchange Board ofIndia (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012 as amended, Securities and Exchange Board of India (Issue andListing of Debt Securities) (Amendment) Regulations, 2014 issued vide circular no. LAD-NRO/GN/2013-14/43/2017 dated January 31, 2014 as amended, Circular No. RBI/2014-15/475DNBR (PD) CC No.021/03.10.001/2014-15 dated February 20, 2015 issued by the Reserve Bank of India on “Raising Money throughPrivate Placement by NBFCs-Non-Convertible Debentures (NCDs) by NBFCs as amended.

The company has complied with the provisions of Companies Act 2013 and the rules made thereunder. It is to bedistinctly understood that the compliance with Companies Act 2013 and the rules does not imply that payment ofinterest or repayment of Bonds, is guaranteed by the Government of India.

The company undertakes that the monies received under the issue shall be utilised only for the purposes and objectsof the issue indicated in the private placement offer letter.

The issuer also confirms that this Private Placement Offer Letter does not omit disclosure of any material fact whichmay make the statements made therein, in light of the circumstances under which they are made, misleading. ThePrivate Placement Offer Letter also does not contain any false or misleading statement.

The issuer accepts no responsibility for the statement made otherwise than in the Private Placement Offer Letter orin any other material issued by or at the instance of the issuer and that anyone who places reliance on any othersource of information would be doing so at his own risk.

Signed pursuant to internal authority granted.

For Tourism Finance Corporation of India Limited

(B.M.Gupta)Executive Director

Place: New DelhiDate: October 16, 2015

Annexures: Consent Letter of Trustee Credit Rating Letter And Rationale Copy of Board resolution Copy of Shareholders resolution Application Form Along with General Instructions


61

XX. ANNEXURES

CONSENT LETTER OF TRUSTEE CREDIT RATING LETTER AND RATIONALE RESOLUTIONS APPLICATION FORM ALONGWITH GENERAL INSTRUCTIONS

IDBI Trusteeshi Services Ltd. sAsian Building, Ground Floor,17, R. KamaniMarg, Ballard Eslaie,Mumbai- 400 001.

No.4029 /ITSL/oPR/ CL/'ts-'t6/DEB / 638Octob€r 14, 2015

N&. Rajiv sinthD€puty General Manage!Tourism Financ€ Corporation of India Ltd.13th Floor,IFCI Tower,6l Nehru Place, New Delhi-110019

Dear Sir,

Consent to act as Deb€ntur€ Trustee for Secured Listed Nor-Conv€rtibl€ Deb€ntures (NCDS) of Rs.100.rorewith gre€n sho€ option of an equil amount.

This is with reference to the email dated 14.10.2015 from your company on appointment of lDBl TrusteeslupServices Limited (ITSL) as Debenture Trustee for Secured Listed Non-Convertible Debentures (NCDS) of Rs.100crore with green shop option of an equal amount.

It would indeed be our pleasure to be associated with your esteemed organization as Debenture Trustee

Accordin8ly, we hereby conJirm our acceptance to act as Debenture Trustee for the above, subject to thecompany agreeing the conditions as set out in Annexure - A.

We are also agreeable for inclusion of our name as trustees in the Company's offer document / disclosuredocument / Iisting application / any other do.ument to be filed with SEBI / ROC / the Stock ExchanSeG) orany other authority as required.

Touris Finan € Corporation of India Ltdissue program.

Thanking you,

shall enter into Debenture Trustee Agreement for the above NCD

Ilor IDBI 'ervices Limited

Ajit

Yours faithJuly,

Tel. : 022{080 7000 . Fat,022-6631 1776 /4080 7080

Website : www.idbitrustee.com '. Email : [email protected] . [email protected]

CIN : U65991MH2001GO1131154

Annexure A

1. The Company agees emd undertales to create th€ securities wher€ver aPPlicable over such of itsirnmovable ind-moveable proPerties and on such terms and conditions as agreed by the Debenture

holders and disclose in the information Memorandum or Disclosure Document and exe€ute, the

Debenture Trust Deed and other necessary secu ty documents for each series of debentures as aPProved

by the Debenture Trustee, within a Period as ageed by us in the lnformation Memorandum or Disclosure

Document in any case not exceeding 3 months ftom the date of closure of the issuance-

2. The Company agr€€s & undertakes to pay to the Debenture Trustees so long as they hold the office of

the Debenture tu;tee, remuneration as stated above for their services as Debenture Trustee in addition

to all legal, traveling and other costs, charges and exPenses which the Debenture Trustee or their officers'

"-ployls o. ug""t" -uy incur in relation to execution of the Debenture Trust Deed and all other

Doiuments af{e&ng the Security till the moni€s in resPect of the Debentures have been tully Paid-off and

the requisite formalities for sadsfaction of charge in all resPe.ts, have been comPlied with'

3. The Company agrees & undertakes to comPly with the Provisions of SEBI (Deb€nture Trustees)

negutations, f-SeA, Sent (ssue and Listing of Debt Secuiities) ReSulations, 2008, read with SEBI (lssue &

Usting of Debt secu ties) (Amendment) Re$latio& 2012, SEBI Circular No SEBI/IMD/DOF

7/Ro;d/2OOg/11/05 dated 11105/2009 on SimPlified Listing Ageement for Debt S€curities read with

the SSIit Circular No. SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated the 26th November, 2009, the

Companies Ac! 1955 to the extent not rePealed and The ComPanies Act, 2013 to the extent notified and

other applicable provisions as amended from time to time and agr€es to furnish to Trustees such

information in tertrls of the same on re8ular basis-

For IDBI

www.brickworkratings.com October 2015

Rating Rationale Brickwork Ratings assigns BWR AA (Outlook: Stable) ratings for Tourism Finance

Corporation of India Limited’s Secured NCD issue of Rs 200crs with a tenor of 10

years.

Brickwork Ratings (BWR) has assigned a rating of BWR AA (Pronounced BWR Double A) with a stable outlook for Tourism Finance Corporation of India Limited’s (TFCI or the ‘Company’) Secured NCD issue of Rs.200 crs. The rating “BWR AA” stands for an instrument that is considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Brickwork Ratings also reaffirms BWR AA (Outlook: Stable) ratings1 for all outstanding issues of Tourism Finance Corporation of India Limited (TFCI or the ‘Company’) rated by it.

Issue Amount Tenure Initial rating date

Outstanding Rating

Present Rating

Bank Loan Rating

Rs 200 Cr

Long Term

October, 2013

BWR AA (Outlook: Stable)

Reaffirmed at BWR AA (Outlook: Stable)

Unsecured bond issue

Rs 100 Cr

Up to 10 years

Aug 29, 2013

BWR AA (Outlook: Stable)



Rs 175 Cr Up to 10 years

Jan 13, 2013

BWR AA- (Outlook: Stable)



Rs 200 Cr

Up to 10 years

May 17, 2012




Rs 100 Cr

Up to 10 years

Jan 25, 2012




Rs 200 Cr

Up to 10 years

May 24, 2011



NCD Rs 50 Cr Up to 10 years

Aug 31, 2009



NCD Issue : BWR AA Outlook : Stable


The rating has factored, inter alia, TFCIs status as a development finance institution for the tourism industry, strong capital adequacy, low NPA levels, and prudent accounting policies. The rating is constrained by the Company’s moderate scale of operations, portfolio risk and interest rate risk high susceptibility of the tourism sector to the local economic conditions.

BWR has essentially relied upon the audited FY15 results, projected financials, publicly available information and information and clarifications provided by the Company.

Background TFCI established in 1989, is a specialized All-India Development Financial Institution to provide financial assistance for development of the tourism industry. TFCI which is a listed Company is also a notified Public Financial Institution under section 4A of the Companies Act, 1956. TFCI provides financial assistance for setting up of tourism-related projects, Hotels, Restaurants, amusement parks, multiplexes, amusement center etc. TFCI also provides research and consultancy services to central and state agencies and investors for development of the tourism industry.

Capital Adequacy Ratio TFCI continues to maintain very high capitalization levels. The overall capital adequacy ratio stood at 37.65 % in FY15 as against 39.86% in FY14. Tier 1 capital decreased to 30.23% as on FY15 from 32.05 % as on FY14. Tier 2 Capital has also decreased to 7.42% as on FY14 from 7.81 % as on FY14 due to deployment of funds for the growth of loan portfolio in FY15. Overall leverage was low at 3 times in FY15 and provides required financial flexibility to support loan growth. Asset quality Gross NPAs increased to ₹ 38.16 Crores as on FY15 from ₹ 23.00 Crores as on FY14. The Gross NPA (%) stood at 3.29% as on FY15 as against 1.72% as on FY14. As on March 31, 2014, Net NPAs stood at 1.50%. During FY15, an amount aggregating Rs.4.67 Crores was recovered from NPAs/written off cases and recognized as income. Financial Performance: Income from operations marginally increased to ₹ 186.16 Crores in FY15 from ₹ 184.06 Crores

in FY14. TFCI’s PAT also marginally increased to ₹ 60.18 Crores in FY15 from ₹ 58.50 Crores for FY14, mainly on account of higher income from interest on loans and deposits in FY15. Net Interest Income decreased to ₹ 86.55 Crores in FY15 from ₹ 94.00 Crores in FY14. For the same period, Net worth marginally increased to ₹ 479.10 Crores which comprised of ₹ 80.71 Crores of equity and ₹ 398.38 Crores of Reserves and Surplus. Total interest bearing borrowings also increased ₹ 956.50 Crores in FY15 from ₹ 861.50 Crores in FY14. Finance cost has increased to ₹ 85.18 Crores in FY15 from ₹ 80.78 Crores in FY14. During FY15, the average cost of borrowings was at 9.68%.


Outlook TFCI has been showing steady improvement in operational performance and asset quality in recent years. However, increasing requirement of funds and its current cost have impacted the Company's profit margins. Ability to raise low cost funds to finance viable tourism related projects, cautiously expand the scale of operations and maintain healthy asset portfolio will be the main drivers of growth for the Company.

Analysts Media

[email protected]

[email protected]

Relationship Contact

[email protected]

Phone: 1-860-425-2742

Tourism Finance Corporation of India- Annexure

Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other

reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it

does not examine the precision or completeness of the information obtained. And hence, the information in this report is

presented “as is” without any express or implied warranty of any kind. BWR does not make any representation in respect to the

truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a

recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any

use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.

mailto:[email protected]



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Disclaimer: A SMERA rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is

intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. SMERA ratings are

based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure

that the data and information is true, SMERA, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy,

accuracy or completeness of the information relied upon. SMERA is not responsible for any errors or omissions and especially states that it has no

financial liability whatsoever for any direct, indirect or consequential loss of any kind arising from the use of its ratings. SMERA ratings are subject to a

process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.smera.in) for

the latest information on any instrument rated by SMERA.

Rating

Rationale

Tourism Finance Corporation of

India Limited

(TFCI)

August 05, 2015

Facility Amount (Rs. Crore) Rating

Non-convertible

debentures

300

(enhanced from Rs.

50.00 crore)

SMERA AA/Stable (reaffirmed)

SMERA has reaffirmed its long-term rating of SMERA AA (read as SMERA double A) to the

Rs.300.00 crore non-convertible debentures of Tourism Finance Corporation of India Limited

(TFCI). The outlook is ‘Stable’. The rating continues to reflect company’s long track record,

established presence and strong management. The rating also factors in the strong capital

structure, healthy asset quality, adequate earnings and comfortable asset-liability maturity profile.

The rating is however constrained due to the exposure of TFCI to a single sector, highly competitive

hotel financing space and risks arising from high concentration in its loan portfolio.

TFCI, incorporated in 1989, is promoted by Industrial Finance Corporation of India Limited (IFCI),

nationalised banks and other financial institutions. The shareholding pattern of TFCI as on March

31, 2015 is as follows:

Shareholding pattern as on March 31, 2015

Name of Shareholder %

IFCI Ltd. 39.10

State Bank of India 9.19

Life Insurance Corporation of India 6.71

Bank of India 4.70 United India Insurance Co. Ltd. 1.48

The Oriental Insurance Co. Ltd 1.06

Total Promoters Holding 62.24

Mutual Fund 5.96

Other Banks/Financial Institutions 0.08

FIIs 1.30

Bodies Corporate 5.98

General Public 23.50

Trust 0.01

NRI 0.93

Total Public Shareholding 37.76

Grand Total 100.00

TFCI strong management consists of two nominee directors from the tourism and finance

ministries each and others with vast experience in the field of banking and tourism related

activities.

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Rating

Rationale


India Limited

(TFCI)

TFCI has strong capitalisations levels. The Tier I capital stood at 31.17 per cent as on March 31,

2015 as compared to 32.05 per cent in the previous year. The company has CRAR ratio at 38.83

percent as on March 31, 2015 as compared to 39.86 percent in the previous year. The net worth

improved to Rs.479.10 crore in FY2014-15 from Rs.436.47 crore in FY2013-14 on account of

retention of profit.

Notwithstanding the recent increase in NPA numbers, (GNPA ratio increasing to 3.8 per cent in

FY2015 from 1.1 percent in FY2013, and NNPA increasing to around 1.5 per cent from nil over the

same period), the company is able to recover most of its dues, as almost all the advances are backed

by 100 per cent collateral, and there have been virtually no write-offs under the period of study.

The company has forayed into infrastructure lending in FY2012-13, which has also partly led to the

increasing NPA levels over the past three years. SMERA takes note of the management’s conscious

efforts to limit exposure to the infrastructure sector in FY2014-15. This focus on Tourism sector is

expected to continue going forward as well.

TFCI has consistently posted decent growth in its portfolio by extending facilities to tourism related

projects including renovation, up-gradation and expansion. The operating income of the company

has grown at a compounded annual growth rate of 11 percent to Rs.102.83 crore in FY2014-15

from Rs.67.86 crore in FY2010-11. The company has maintained healthy earning profile (net profit

in relation to average assets) at 4.13 per cent as on March 31, 2015 as compared to 4.20 percent in

the previous year. SMERA expects TFCI to maintain a moderate level of earnings, considering the

low overhead expenses (operating expenses in relation to average assets of 1.37 per cent for 2014-

15) and access to funds at competitive rates, provided it maintains a strict control on its asset

quality.

TFCI’s comfortable liquidity profile is evident from the comfortable assets liability management

profile arising out of raising of long term funds (maturing after three to five years) at competitive

rates by the company.

However, the company is exposed to concentration risk since TFCI deals solely with the tourism

sector. The ratings are also constrained due to the intense competition in the tourism finance sector

from banks and other NBFC’s. TFCI is also exposed to high concentration in its loan portfolio, with

top 10 accounts comprising around 35 per cent of the company’s total loan book. SMERA however

believes, with the expected increase in AUM going forward, this concentration risk is expected to be

partially mitigated.

Outlook: Stable

SMERA believes the outlook on TFCI’s rated facilities will remain stable over the medium term. The

company will continue to benefit from its experienced management and strong asset quality. The

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Rating

Rationale


India Limited

(TFCI)

outlook may be revised to ‘Positive’ in case the company achieves sustained growth in its asset

books while maintaining strong asset quality and healthy returns. The outlook may be revised to

‘Negative’ in case of expansion of operations resulting in deterioration of asset quality, profitability

or capital levels of the company.

Rating sensitivity factors

• Improving the scale of operations while maintaining the asset quality and regulatory

requirements

• Efficient asset liability management

• Geographical diversification of loan portfolio

About the Company

TFCI, incorporated in 1989, is a public limited company formed as a specialised financial institution

to cater to the financial needs of the tourism industry. The company has its corporate office in New

Delhi.

TFCI reported profit after tax (PAT) of Rs.60.18 crore on interest income of Rs.172.04 crore and

loan portfolio of Rs.1274.38 crore for FY2014-15 as compared to profit after tax (PAT) of Rs.58.50

crore on interest income of Rs.175.03 crore and loan portfolio of Rs.1176.99 crore for FY2013-14.

The net worth stood at Rs.479.10 crore as on March 31, 2015, as against Rs.436.47 crore a year

earlier.

Contact List:

Media/Business

Development Analytical Contact Rating Desk

Antony Jose

Vice President – Business

Development, Mid Corporate

Tel: +91-22-6714 1191

Cell: +91 9820802479

Email: [email protected]

Web: www.smera.in

Parimal Thakker

Assistant Vice President –

Operations

Tel: +91-11-41731312


Tel: +91-22-6714 1184
