Your directors take pleasure in presenting the 43rd Annual Report of the Company alongwith the Audited Accounts for the year ended March 31 2017.
|FINANCIAL HIGHLIGHTS || ||(Standalone) |
| || ||(` in Lakhs) |
| || |
|Particulars ||As at March 31 2017 ||As at March 31 2016 |
|Income ||1409.54 ||1146.31 |
|Profit/(loss) before Interest Depreciation & Taxation ||1285.09 ||1035.64 |
|Financial Charges ||855.57 ||803.92 |
|Depreciation ||2.77 ||2.91 |
|Profit/(Loss) before tax ||426.75 ||228.81 |
|Exceptional Items ||-- ||-- |
|Provision for tax: || || |
|Current Tax ||68.42 ||32.00 |
|Deferred Tax ||(4.25) ||(1.33) |
|Tax relating to earlier years ||2.18 ||-- |
|Profit/(Loss) after tax ||360.40 ||198.14 |
|Balance brought forward from previous year ||1917.91 ||1759.40 |
|Transferred to Reserve Fund ||72.08 ||39.63 |
|Balance Carried forward ||2206.23 ||1917.91 |
Your Directors have not recommended payment of dividend for the financial year endedMarch 31 2017 since it is proposed to retain the same in the business.
The Company has not accepted any deposits during the year under review and it continuesto be a Non-deposit and Non Banking Financial Company in conformity with the guidelines ofthe Reserve Bank of India and Companies (Acceptance of Deposits) Rules 1975.
OPERATIONAL PERFORMANCE REVIEW
During the year under review your Company achieved a turnover of ` 1409.54 lakhs asagainst ` 1146.31 lakhs in the previous year. The profit before tax stands at ` 426.75lakhs as against ` 228.81 lakhs in the previous year.
SUBSIDIARY (ITAG BUSINESS SOLUTION)
The wholly owned subsidiary of the Company M/s. ITAG Business Solutions Ltd. is intothe core business of Knowledge Process Outsourcing (KPO) and the consolidated financialsforms part of this annual report.
The turnover of the Subsidiary Company M/s. ITAG Business Solutions Ltd is ` 144.36lakhs as against ` 142.71 lakhs in the previous year. Profit before tax stood at ` 4.14lakhs as against loss of ` (4.76) lakhs in the previous year. A statement pursuant toSection 129 of the Companies Act 2013 related to the accounts of the subsidiary formspart of this Annual Report.
Policy for determining material subsidiaries of the Company is available on the websiteof the Company http://www.tcifl.in/ pdf/Policyonmaterialsubsidiaries.pdf
As per section 45IC of RBI Act 1934 the Company has transferred ` 72.08 Lakhs toreserve fund i.e 20% of its net profit.
CONSOLIDATED FINANCIAL STATEMENTS (CFS)
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) 21 Consolidated Financial Statements is provided in the AnnualReport. The CFS should therefore be read in conjunction with the directors' reportsfinancial notes cash flow statements and the individual auditor reports of thesubsidiary.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Ms. MeeraMadhusudan Singh retire by rotation and being eligible has offered herself forre-appointment.
The brief profile of the director who is to be re-appointed form part of the notes andexplanatory statement to the notice of the ensuing Annual General Meeting.
During the year under review there is no change in Key Managerial Personnel of theCompany.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow: i) The ratio of the remuneration of each Director to the median remuneration ofthe employees of the Company for the financial year 2016-17 percentage increase inremuneration of each Director Chief Financial Officer and Company Secretary during thefinancial year 2016-17 are as under:
|Non-Executive Directors (Refer Note-1) ||Ratio to median remuneration ||% increase in remuneration in the financial year |
|Mr. Hemant Kaul Chairman ||- ||- |
|Mr. Mahendra AgarwalPromoter & Director ||- ||- |
|Mr. R S AgarwalaDirector ||- ||- |
|Mr. S M Jalan Independent Director ||- ||- |
|Mr. D R Agarwal Director ||- ||- |
|Ms. Meera Madhusudan Singh Director ||- ||- |
|Executive Directors/ KMP || || |
|Mr. Ramesh Sivaraman-Manager-Chief Executive ||2.34:1 ||10% |
|Ms. Lakshmi Sharma Company Secretary ||0.37:1 ||6% |
Note 1: The Company had paid only sitting fees to the Directors. Apart from sittingfees there is no other remuneration paid to the Non-Executive Directors. Therefore theratio to median remuneration is negligible. ii) the percentage increase in the medianremuneration of employees in the financial year: 9.5% iii) the number of permanentemployees on the rolls of company: 4 iv) Average percentage increase made in the salariesof employees other than the managerial personnel in the last financial year i.e. 2016-17was 10 % whereas the increase in the managerial remuneration for the same financial yearwas 10%.
v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
The particulars of employees required under section 197(12) of the Companies Act 2013read with Rules 5 (2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are not furnished as there is no employee in receipt ofremuneration more than the prescribed limit.
As per ministry of corporate affairs notification no: G.S.R. 646(E) regarding amendmentof the companies (Appointment and Remuneration of Managerial Personnel) in rule 5 sub rule(2) the statement containing particulars of top ten employees in terms of remunerationdrawn as required under Section 197(12) of the Act read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given below:
|a) Name of the employee; ||Ramesh Sivaraman ||Laxmi Narain kumawat ||Dinesh Goud ||Lakshmi Sharma |
|b) Designation of the employee; ||Manager- Chief Executive ||Assistant General Manager ||Manager ||Company Secretary |
|c) Remuneration received; (` in lakhs) ||33.66 ||20.42 ||12.50 ||5.60 |
|d) Nature of employment whether contractual or otherwise; ||Permanent ||Permanent ||Permanent ||Permanent |
|e) Qualification an experience of the employee; ||CA ||MCOM ||LLM ||CS |
|f) Date of commencement of employment; ||22-Oct-96 ||01-Sep-78 ||31-Mar-06 ||01-Dec-12 |
|g) Age of such employee; ||49 ||57 ||39 ||28 |
|h) Last employment held by such employee before joining the company; ||Manager Asia Pacefic Investment Ltd. ||Manager Gati Ltd. ||Own Practice ||Assistant Manager- Gati KWE |
|i) % of equity shares held by the employee in the company; ||0 ||0.07 ||Nil ||Nil |
|j) Whether any such employee is a relative of any director and if so name of such director or manager ||No ||No ||No ||No |
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from Mr. Hemant Kaul and Mr. S M JalanIndependent Director of the Company under Section 149(7) of the Companies Act 2013 thatthe Independent Directors of the Company meet with the criteria of their Independence laiddown in Section 149(6).
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
The Remuneration Policy is stated in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligation& Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration and otherCommittees. The manner in which the evaluation has been carried out has been explainedhereunder.
The evaluations based on questionnaire was prepared which assessed the performance ofthe Board on select parameters related to roles responsibilities and obligations of theBoard and functioning of the Committees including assessing the quality quantity andtimeliness of flow of information between the company management and the Board that isnecessary for the Board to effectively and reasonably perform their duties. The evaluationcriteria for the Directors were based on their participation contribution and offeringguidance to and understanding of the areas which are relevant to them in their capacity asmembers of the Board.
PARTICULARS OF LOANS GUARANTEES and INVESTMENTS:
The company being a NBFC therefore section 186 of Companies Act 2013 is exemptedtherefore details of Loans Guarantees and Investments are given in the notes to theFinancial Statement.
CORPORATE SOCIAL RESPONSIBILITY
During the year your Company decided to install the solar panel 6 KWp ( 2 nos of 3KWp) Solar PV plant at two Government School at Hyderabad as a part of its CSR activities.Further your company proposed to spend Rs.9 lakhs for the aforesaid activity. The Companyhas placed order for installation of solar panel. The expenses would be accounted afterthe installation of the solar panel and on payment in FY 2017-18. Details of activityunder CSR is given in Annexure-A. RELATED PARTY TRANSACTION
The main business of the Company is financing activities and all loans granted torelated party (if any) are in the ordinary course of business. All related partytransactions that were entered into during the financial year were on an arm's lengthbasis and were in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. Accordingly Form AOC-2 is not applicable to the Company.All Related Party Transactions are placed before the Audit Committee as also the Board forapproval. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its approval.
Your Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthereunder and the SEBI (Listing Obligation & Disclosure Requirements) Regulations2015. This Policy was considered and approved by the Board has been uploaded on thewebsite at: http://www.tcifl.in/ pdf/RelatedPartyTransactionPolicy.pdf
During the year Four Board Meetings and Four Audit Committee Meetings were convened andheld. The details of the meeting along with the attendance of the director are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.
Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee CSR Committee Stakeholders Relationship Committeenumber of meetings held during the year under review and other related details are set outin the Corporate Governance Report which forms a part of this Report. There have been nosituations where the Board has not accepted any recommendation of the Audit Committee.
The Company has Vigil Mechanism policy with a view to provide a mechanism for employeesof the Company to approach the Ethics Counsellor / Chairman of the Audit Committee of theCompany. The Vigil Mechanism Policy has been uploaded on the website of the Company at:http://www.tcifl.in/pdf/VigilMechanismPolicy.pdf. It is affirmed that no personnel of theCompany has been denied access to the Audit Committee.
Pursuant to SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015the Company shall familiarize the Independent Directors with the Company their rolesrights responsibilities in the Company nature of the industry in which the Companyoperates business model of the Company etc. through various programmes.
Accordingly the Company has arranged a technical session on February 7 2017 tofamiliarize the Independent Directors about their roles responsibilities and duties asIndependent Directors. The details of the familiarization programme has been disclosed onthe website of the Company at: http://www.tcifl.in/pdf/ProgrammesforIDs07022017.pdf
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 your Directors' confirm thefollowing: ??that in the preparation of the Annual Accounts for the year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures; ??that the directors have selected such accountingpolicies and applied them consistently and made judgement and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit or loss of the Company for thatperiod. ??that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.??that the directors have prepared the annual accounts on a 'going concern' basis. ??thatthe directors had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively. ??thatthe systems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively
ACCOUNTS OF SUBSIDIARY
Copies of these annual accounts and related information will be made available on theCompany's website at www.tcifl.in and also on request. The annual accounts of thesubsidiary company will be made available at the registered office of the company and alsoat the venue during the Annual General Meeting.
The Company's shares are traded in the dematerialized form with nation-wide terminalson both Bombay Stock Exchange and National Stock Exchange. The particulars of ShareholdingPattern Distribution of Shareholding and Share prices are mentioned separately in theReport on Corporate Governance.
Internal Financial Controls
Your Company has established and maintained a framework of internal financial controlsand compliance systems. Based on the same and the work performed by the internal auditorsstatutory auditors and external agencies and the reviews performed by management team andthe relevant Board Committees including the Audit Committee the Board is of the opinionthat the Company's Internal Financial Controls were adequate and effective during thefinancial year 2016-17.
The Board of Directors to the best of their knowledge and ability confirm that:
Your Company has laid down internal financial controls to be followed and that suchinternal financial controls are adequate and were generally operating effectively; andYour Company has devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
a) Statutory Auditors
The Statutory Auditors of the Company M/s. Bhaskara Rao & Co CharteredAccountants Hyderabad hold office till the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment. The Company has received letter to the effectthat the re-appointment if made would be within the prescribed limits under Section141(3)(g) of the Companies Act 2013 and that they are not disqualified forre-appointment. As required under SEBI (Listing Obligation & Disclosure Requirements)Regulations 2015 the auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India.
Pursuant to Companies Act 2013 the Company has appointed the statutory auditors tohold office from the conclusion of the 40th Annual General Meeting till the conclusion ofthe 45th Annual General Meeting subject to ratification at the every Annual GeneralMeeting of the Company.
During the year under review there is no qualifications/observations raised by theauditors. b) Secretarial Audit
In Pursuant to the provisions of Section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. dvm gopal & associates a firm of Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed as Annexure B.
Pursuant to the observation of the secretarial auditor in his report the Company is inthe process of selection and appointment of CFO.
EXTRACT OF ANNUAL RETURN
The details forming part of Annual Return in form MGT-9 is annexed as Annexure-CCORPORATE GOVERNANCE
The Company has complied with the provisions pertaining to Corporate Governance as perthe SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015requirementsofith the Stock Exchanges and necessary disclosures have been made in this regard in theReport on Corporate Governance is annexed as Annexure-D along with a certificatefrom a Practicing Company Secretary confirming compliance of the same.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:
As the Company is not engaged in the manufacturing activity the prescribed informationregarding compliance of rules relating to conservation of Energy and Technology absorptionpursuant to Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 (3) ofthe Companies (Accounts) Rules 2014 is not provided.
The Company does not have any Foreign Exchange Earnings and outgo in the year underreview.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
MDA is provided as a separate section in the annual report.
GENERAL i. During the year under review there is no change in nature of business.ii. There is no material changes and commitment affecting the financial position of theCompany between the end of financial year and the date of the report. iii. During theunder review no significant or material orders were passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future iv. Duringthe year under review there were no cases filled pursuant to the sexual Harassment ofwomen at workplace (prevention Prohibition and Redressal )Act 2013
Your Directors wish to express their sincere appreciation for the support andcooperation which the Company continues to receive from its clients Banks GovernmentAuthorities Financial Institutions and associates and are grateful to the shareholdersfor their continued support to the Company. Your Directors place on record theirappreciation for the contributions made and the efforts put in by the management team andemployees of the Company at all levels.
By Order of the Board
For TCI FINANCE LIMITED
May 2 2017