We have audited the accompanying Standalone financial
statements of Tourism Finance Corporation of India Limited ("the
Company"), which comprise the standalone balance sheet as at
31st March 2026, and the standalone statement of Profit and Loss
(including other comprehensive income), standalone statement
of changes in equity and standalone cash flows statement for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as "standalone
financial statements")
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the
manner so required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under section
133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, ("Ind AS") and other
accounting principles generally accepted in India, of the state
of affairs of the Company as at March 31, 2026, and its profit
and other comprehensive income, changes in equity and its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the
Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India
together with the ethical requirements that are relevant to our
audit of the financial statements under the provisions of the
Companies Act, 2013 and the Rules there under, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
financial statements for the financial year ended March 31, 2026.
These matters were addressed in the context of our audit of the
standalone financial statements, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters. We have determined the matters described below to be
the key audit matters to be communicated in our report.
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Sr.
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Key Audit Matters
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How our Audit addressed Key Audit Matters
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1.
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Impairment of Financial Assets based on expected credit
losses as at balance sheet date
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(As described in note no 6 & 42 of the standalone financial
statements)
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Ind AS 109 requires the company to provide for impairment
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Considered the Company's accounting policies for impairment
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of its Financial Assets using an expected credit loss (ECL)
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of Financial assets and their compliance with Ind AS 109 and
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model. A model of ECL is developed by the company based
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the "Governance framework" in line with Reserve Bank of India
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on the guiding principal prescribed under Ind AS 109.
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(RBI) guidance.
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Accordingly as on March 31, 2026 the Company has
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Evaluated the Company's Expected Credit Loss (ECL)
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reported Gross loans amounting to ^2,08,814.09 lakh
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methodology and the underlying assumptions,
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against which an impairment loss of ^3,616.19 lakh has
been recorded.
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Assessed the Exposure at Default used in the impairment
calculations on a test basis;
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ECL involves an estimation of probability weighted loss
on financial instrument over their life information about
past event, current conditions and estimates of future
economic conditions which could impact the credit quality
of company's loans and advances.
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Evaluated the basis and methodology adopted by management
to determine 12 months and life-time probability of defaults
for various homogenous segments and performed test
checks. Assessed and verified the data used in the impairment
computation;
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In the above process, a significant degree of judgement
has been applied by the management which includes:
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Evaluated the process adopted by the management for
significant judgments and estimates, including future economic
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• Segmentation of the loan portfolio into
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conditions, for ECL Computation and additional overlay
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homogenous pool of borrowers,
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provision.
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Sr.
no.
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Key Audit Matters
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How our Audit addressed Key Audit Matters
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• Identification of exposures where there is a
significant increase in credit risk,
• Completeness and timing of recognition of default,
in accordance with the prudential norms on Income
Recognition, Asset classification and provisioning
pertaining to loan assets,
• Determination of the 12 months and lifetime
probability of default for each of the segment
identified and technique based on past trends/
experience, management estimates used to
determine probability of default, loss given default,
exposure at default for extended exposure.
As stated in note number 6 & 42 to the standalone
financial statement for the year ended on March 31, 2026
the management has determine the allowances for credit
losses based on historical loss experience adjusted to
reflect current and estimated future economic conditions.
Considering the future uncertainties and considering the
increased default risk in the accounts which are presently
under SMA category (accounts under stress) and other
factors which has impact on the company's business
operation, the company has recorded ECL allowances
aggregating to ^3,616.19 lakh which includes an overlay
of ^3,367.52 Lakh as part of ECL to reflect among other
things the increased risk of deterioration in loans Assets.
Company is periodically monitoring the basis of estimates
and assumptions to arrive at overlay which significantly
depend on the future development in the accounts.
In view of the significance of the amount of loan assets
in the standalone financial statements and high degree
of management's judgement involve in estimation of ECL
we have considered allowance of credit loss as key audit
matter.
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Assessed analytical reviews of disaggregated data to observe
any unusual trends warranting additional audit procedures;
Reviewed advances including SMA (stressed advances) on a
sample basis with respect to compliance with the RBI Circulars/
Guidelines/ Judicial pronouncements.
Assessed disclosure made in the standalone financial statements
in respect of expected credit losses.
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2.
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Pending litigations with tax Authorities
During the assessment proceedings of the earlier years
the tax Authorities has raised the tax demands on the
company. The company has disputed such demands and
preferred appeal against them at appropriate forums.
As per Ind AS-37 the company is required to perform
an assessment of the probability of economic outflow
on account of such disputed tax matters pending under
litigation and determine whether any particular obligation
needs to be recorded as a provision in the books of
accounts or to be disclose as a contingent liability.
As such demand amounting to ^9.80 lakh are pending
under litigation at different forum is treated as contingent
liability.
Considering the significant degree of judgement applies
by the management in making such assessment and the
resultant impact on the standalone financial statement
we have considered it to be a key audit matter.
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We have performed the following procedure to assess the
company's exposure for tax matters under litigation.
• Evaluated the process laid down by the management for
performing their assessment taking into consideration
past legal precedents, changes in laws and regulations,
expert opinions obtained from external tax/legal experts
as made available to us by the Company ;
• Evaluated communications with relevant authorities
including notices, demands, orders, etc., relevant to
the pending litigations, as made available to us by the
management;
• Tested the accuracy of disputed amounts from the
underlying communications received from tax authorities
and responses filed by the Company;
• Considered the submissions made to appellate
authorities and expert opinions obtained by the Company
from external tax / legal experts which form the basis for
management's assessment;
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Key Audit Matters
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How our Audit addressed Key Audit Matters
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• Assessed the positions taken by the management in the
light of the aforesaid information.
• Evaluated the disclosures included in the Standalone
Financial Statements in this regard.
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4.
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Investment in Security Receipts (SRs)
Company has investments in Security Receipts (SR) issued
by ARCs on assignment of certain loan accounts. The
impairment on such investments is ascertained on the
basis of NAV declared by ARCs based on evaluation done
by external rating agencies. The impairment is further
tested considering relevant RBI guidelines in this regard.
Considering the significant judgement and estimation on
the recoverability, above is considered to be a Key Audit
Matter.
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Evaluated the assignment agreement executed between
Company and ARC.
Reviewed the compliance with the RBI guidelines.
Verified NAV letter issued by ARC based on evaluation done by
external rating agency.
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Information other than the Standalone Financial Statements
and Auditor's Report thereon
The Company's Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in the company's Annual
Report but does not include the standalone financial statements
and our auditor's report thereon.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon. In connection with our audit of
the standalone financial statements, our responsibility is to read
the other information when it becomes available to us and, in
doing so, consider whether the other information is materially
inconsistent with the standalone financial statements or our
knowledge obtained during the course of our audit or otherwise
appears to be materially misstated.
When we read such other information as and when made
available to us and if we conclude that there is a material
misstatement therein, we are required to communicate the
matter to those charged with governance. We have nothing to
report in this regard.
Management's Responsibility for the Standalone Financial
Statements
The Company's Board of Directors is responsible for the matters
stated in section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance, including other comprehensive income,
changes in equity and cash flows of the Company in accordance
with the Ind AS accounting principles generally accepted in
India. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities, selection and
application of appropriate accounting policy, making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Standalone financial
statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management
is responsible for assessing the Company's ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section
143(3)(i) of the Companies Act, 2013, we are also
responsible for expressing our opinion on whether the
Company has adequate internal financial controls system
in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's
report to the related disclosures in the standalone
financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the standalone financial statements including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020
("the Order"), issued by the Central Government of India in terms
of sub section (11) of section 143 of the Companies Act, 2013, we
give in the Annexure-A a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss
(including other comprehensive income), statement of
change in equity and the Cash Flow Statement dealt
with by this Report are in agreement with the books of
accounts.
d) In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under Section
133 of the Act. Read with the rule 7 of the companies rule
(accounts), 2014 to the extent applicable to the company
and in the manner so required.
e) On the basis of the written representations received from
the directors as on March 31, 2026 and taken on record by
the Board of Directors, none of the directors is disqualified
as on March 31, 2026 from being appointed as a director
in terms of Section 164 (2) of the Act.
f) With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements of
section 197(16)of the Act, as amended:
In our opinion and to the best of our information and
according to the explanations given to us, the remuneration
paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act
g) In respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate Report in "Annexure-B". Our report expresses
an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls
over financial reporting.
h) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:
i. The Company has disclosed the impact of pending
litigations on its financial position in its standalone
financial statements.
ii. The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long¬
term contracts including derivative contracts to the
standalone financial statements;
iii. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Company.
For Rama K Gupta & Company
(Chartered Accountants)
FRN:005005C
(CA Ashok Kumar Gupta)
Partner
Place: New Delhi M No. 089807
Date : May 13, 2026 UDIN: 26089807IHOBGX5568
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