To the Members of
TCFC FINANCE LIMITED
The Directors have pleasure in presenting the 29th Annual Report of theCompany together with the Audited Annual Accounts for the year ended March 31 2020.
| ||Year ended March 31 2020 ||Year ended March 31 2019 |
| ||(Rs in lacs) ||(Rs in lacs) |
|Total Revenue from operations ||123.12 ||598.37 |
|Profit/(Loss)before tax ||(42.19) ||505.49 |
|Less: Provision for Tax ||(50.97) ||121.09 |
|Net Profit/(Loss) after tax ||8.78 ||384.39 |
|Other Comprehensive Income ||(0.90) ||(0.75) |
|Total Comprehensive Income ||7.88 ||383.63 |
Compared to the previous year's Profit of Rs. 505.49 lakhs this year your company hasincurred a Loss of Rs. 42.19 Lakhs before provision of tax and after deducting the tax itcomes to a profit of Rs 8.78. Lakhs
In view of the inadequacy of profits and in order to conserve the resources yourDirectors have decided to not recommend a dividend for the aforesaid financial year.
MANAGEMENT DISCUSSION AND ANALYSIS Industry Structure and Developments
The COVID-19 pandemic has disrupted global economies and created unprecedentedchallenges. Economic activity in India was down to a standstill owing to the nation-widelockdown as the investmentin India from 25th March 2020.The NBFC industry wasseverely impacted with disruption in collections moratorium to customers challenges inraising funds and Banks not granting moratorium adversely affecting the business.
The Government and RBI have introduced several liquidity and stimulus measures tosupport the economic activities including the NBFCs. These measures are yet to showintangible results at the time of writing this report. This has impacted the sentiments inthe capital markets thus affecting the prices of the equity shares across the board.
We expect as lockdown starts to lift and as stimulus measures start reach the endcustomers economic recovery will commence across the industries including the NBFCs. Itis hoped that the second half of the financial year 2020-2021 will see a rebound ineconomic activities. At the same time the Covid-19 pandemic will have a long term impactin terms of how businesses and consumers function not only in our country but across theworld.
Opportunities and Threats
Your Company being an investment Company seeks opportunities in the capital market. Thevolatility in stock indices in the financial year under report represents both anopportunity and challenge for the Company.
With the financial stimulus from the government and the expected improvement in theeconomies of the countries in North America and Europe. India also is expected to startrecovering from the third quarter of FY 2020-2021 As a long-term strategy the Company hasmade investments in equities mutual funds and fixed income securities and is lookingforward for a sustainable growth in its investee Companies in the coming years which wouldenhance the shareholders' value.
Segment Wise / Product Wise Performance
The Company is engaged only in investment activities and no other business activities.Hence the requirement of segment-wise reporting is just for one segment.
The Management of the Company is looking for a steady growth of the Company and aims atmaximizing the shareholders wealth by way of earning maximum profits at low investment .costs
Risks and areas of concern
Sudden regulatory changes or increase in regulatory scrutiny/ restrictions orunexpected events generally referred to as black swan events may affect the manner inwhich the markets react. As your company's business is purely into investment activitiesthe capital market developments may affect the gains and profitability of the Company.
However the management is of the opinion that the Company portfolio canwithstand suchmarket fluctuation of the Company is based on a conservative approach to maximize thereturns keeping in view the market fluctuations.
Internal Control Systems and Adequacy
The Company has satisfactory internal control system. The adequacy of the internalcontrol system is reviewed by the Audit Committee of the Board of Directors. Your Companyhas taken proper and sufficient care for the maintenance of adequate accounting records asrequired by various Statutes. Internal Auditor the Audit Committee and Statutory Auditorhave full and free access to all the information and records as considered necessary tocarry out their responsibilities.
The Company's current activities do not require engagement of significant humanresource. However requisite qualified and experienced personnel have been engaged to takecare of organization need of human resource. The Company will engage requisite humanresource as and when required.
As stated earlier Covid-19 may have a lasting impact on the
Indian economy and that of the world. This will also impact the capital markets onwhich our company depends for its investment activities.
The government is expected to initiate various measures for revival of the economyincluding reforms in labour sector banking support to MSMEs reviving rural demand andmany others. It is to be hoped that such measures will help in stabilizing the economy andtaking it forward.
In this context your company will continue with the strategy of investment inequities mutual funds and fixed income securities adopting a very conservative approachto such investments.
Statements in the Management Discussion and Analysis that address expectations aboutthe future including but not limited to statement about Company's strategy for growthmarket position expenditures and financial results are forward looking statements andthese forward looking statements are based on certain assumptions and expectations offuture events. The Company cannot guarantee that these assumptions and expectations areaccurate or will be realised. Actual results could differ materially from those expressedor implied. Important factors that could make a difference to the Company's operationsinclude among others economic conditions affecting demand/supply and price conditions inglobal and domestic markets changes in government regulations Tax laws and otherstatutes and incidental factors.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several best corporate governance practices as prevalent globally. The reporton Corporate Governance as stipulated under the SEBI (LODR) Regulations 2015 forms anintegral certificatefrom part of this Report. The requisite the Auditors of the Companyconfirming compliance with the conditions of corporate governance is attached to thereport on Corporate Governance.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the
Company during the financial year with related parties were in the ordinary course ofbusiness and on an arm's length basis. Thus disclosure in form AOC-2 is not required.
During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
The details of the related party transactions as required are set out in note to thefinancial statements forming part of this Annual
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on Company's website athttp://www.tcfcfinance. com/wp-content/uploads/2018/07/Policy_on_Related_Party_Transcations-revised.pdf
Being a non-deposit accepting NBFC Company your Company has not accepted any depositsfrom the public / members under Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 during the year under review.
STATUTORY AUDITORS & REMARKS ON AUDITORS REPORT
In accordance with the provisions of Section 139 of the
Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014 M/s. GMJ& Co Chartered Accountants (Firm registration No. 103429W) were appointed asCompany's Statutory Auditors for 5 years to hold office till the conclusion of the 32ndAnnual General Meeting subject to ratification by the members at every Annual GeneralMeeting until the expiry of the period of original appointment as may be necessitated bythe Act from time to time.
The Ministry of Corporate Affairs vide its notification dated 7th May 2018 has doneaway with the requirement of the ratification of the appointment of Statutory Auditors atevery Annual General Meeting and hence M/s. GMJ & Co. shall continue as StatutoryAuditors for the remaining period of the term till the conclusion of the 32ndAnnual General Meeting of the Company.
Further The Auditors' Report does not contain any qualification reservation oradverse remark or disclaimer. Further the Statutory Auditors have not reported anyincident of fraud during the year under review to the Audit Committee of your Company
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended March 31 2020 the Board ofDirectors hereby confirms that: (a) in the preparation of the annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures; (b) such accounting policies have been selected and appliedconsistently and the Directors made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2020 and of the profit/loss of the Company for that year;
(c) proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; (d) the AnnualAccounts of the Company have been prepared on a going concern basis.
(e) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; (f)proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Re-Appointment of Mr. Dharmil A Bodani a Director
Retiring by Rotation:
In terms of Section 152 of the Companies Act 2013 Mr. Dharmil A. Bodani Director ofthe Company is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board recommends the same for yourapproval.
Key managerial Personnel
During the year under review there was no change in the Key Managerial personnel of theCompany.
Declaration by independent directors
The Independent directors have submitted the declaration of independence as requiredunder section 149(7) of the Companies
Act 2013 stating that they meet the criteria of independence as provided in section149(6) of the Companies Act 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 (the ListingRegulations'). The directors have also complied with the requirement of registration ofIndependent Director with IICA portal.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company is not engaged in any manufacturing activity and thus its operations arenot energy intensive. However adequate measures are always taken to ensure optimumutilization and maximum possible saving of energy.
There was no foreign exchange transaction entered into by the Company during the yearunder review.
The information required under Section 197 of the Companies
Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company is provided in "Annexure 1"forming part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. TheCSR Policy may be accessed on the Company's websitehttp://www.tcfcfinance.com/wp-uploads/2020/08/CORPORATE-SOCIAL-RESPONSIBILITY-POLICY-TCFC-Finance-Ltd.pdfThe Corporate Social Responsibility Committee is constituted in accordance with theprovisions of Section 135 of the Companies Act 2013 read with rules made thereunder.
The Annual Report on CSR activities for the financial year ended 2019-2020 is annexedherewith as "Annexure-2"
MEETINGS OF THE BOARD:
The Company holds at least four Board meetings in a year one in each quarterinter-alia to review the financial results of the
Company. The Company also holds additional Board Meetings to address its specificrequirements as and when required. All the decisions and urgent matters approved by wayof circular resolutions are placed and noted at the subsequent Board meeting.
During the financial year 2019-2020 five (5) Board Meetings were convened and held. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and the SEBI (LODR) Regulations 2015. The details of the Board meetings heldduring the year along with the attendance of the respective Directors thereat are set outin the Corporate Governance Report forming part of this Annual Report
COMMITTEES OF THE BOARD:
With a view to have a more focused attention on business and for better governance andaccountability the Board has constituted the mandatory committees viz. Audit CommitteeStakeholders' Relationship Committee Nomination and Remuneration Committee and CorporateSocial Responsibility Committee. The details with respect to the compositions rolesterms of reference etc. of relevant committees are provided in the Corporate GovernanceReport of the Company which forms part of this Annual Report.
ANNUAL EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration the various aspects of the Board's functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance. The performance evaluation of the IndependentDirectors was completed. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors. The Board ofDirectors expressed their satisfaction with the evaluation process.
NOMINATION AND REMUNERATION
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members.
SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act and Rules made there under M/s. AABID & COPracticing Company Secretary has been appointed as Secretarial Auditor of the Company. Thereport of the Secretarial Auditors is enclosed as "Annexure-3" to this report.The report is self-explanatory and do not call for any further comments.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 inaccordance with Section 92(3) of the
Companies Act 2013 read with the Companies (Management and Administration) Rules2014 is enclosed as "Annexure 4" to this report.
INTERNAL AUDIT & CONTROLS
The company has adequate system of internal financial control and risk mitigationsystem commensurate with the size of the Company and nature of its business. The Companyhas adopted the Indian Accounting Standards w.e.f. 1st April 2019 forpreparation and reporting financial statements as per the said requirements. The Auditcommittee actively reviews the adequacy and effectiveness of the Internal Financialcontrol and suggests the improvements for the same.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Since the Company is a registered entity under the Reserve Bank of India to conduct thebusiness of Non-Banking Financial Services pursuant to the section of 186 (11) (a) (b)of the Companies Act 2013 the company is exempted from complying with the provisions.
Further details of Investments made by the Company during the year review form a partof the financial statements.
Pursuant to the provisions of section 177(9) (10) of the Companies
Act 2013 and Regulation 22 of SEBI (LODR) Regulations 2015 a Vigil Mechanism fordirectors and employees to report genuine concerns has been established.
The Vigil Mechanism Policy has been uploaded on the website of the Companyhttp://www.tcfcfinance.com/wp-content/uploads/2019/06/Vigil_Mechanism_Policy-Whistle-Blower-
Further there were no complaints received from the employees of the Company undervigil mechanism for the year under review.
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks andhas established a framework for mitigating controls and reporting mechanism of such risks.Some of the risks that the Company is exposed to are: (i) Financial Risk (ii) RegulatoryRisks (iii) Human Resources Risks (iv) Strategic Risks(v) IT & cyber related risk.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
During the financial year 2019-2020 the Company has not received any complaint ofsexual harassment against women employees of the Company.
LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 toBSE where the Company's Shares are listed.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There material orders passed by the are no significant
Regulators/Courts that would impact the going concern status of the Company and itsfuture operations
The industrial relations of the Company continued to be cordial throughout the year.
The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India
The Board of Directors thanks Reserve Bank of India all other Banks Stock Exchange ofMumbai and Shareholders for their continued support besides employees at all levels.
By Order of the Board For TCFC Finance Limited
Atul Desai Chairman (DIN:00019443)
Place: Mumbai Date: 30th June 2020
(A) The ratio of the remuneration of each director to the median employee'sremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
|Sr. No Requirements ||Disclosure |
|1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; ||The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year ended 31 st March 2020 is : Mrs.Tania Deol -2.71% Mr.Venkatesh Kamath - 2.24% For this purpose Sitting fees paid to the Independent & Non executive Directors have not been considered as remuneration. |
|2. The percentage increase in remuneration of each Director ||CEO: No Change |
|Chief Financial Officer Chief Executive Officer Company ||CFO: 10.76% |
|Secretary or Manager if any in the financial year. ||CS: 10.01% |
|3. The Percentage increase in the Median remuneration of employees in the financial year ||The median remuneration of the employees in the financial year was increased by 6.93% The calculation of % increase in median remuneration is based on the Company performance and employee's individual performance. |
|4. The Number of permanent employees on the rolls of the Company ||8 employees as on March 31 2020. |
|5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration the remuneration 6. Affirmation policy of the Company ||There was no exceptional circumstance of increase of salary of employees other than the managerial personnel in the last financial year. The percentile increase process and policy was same for the managerial personnel and all the other employees. Yes the remuneration is as per the remuneration policy of the Company. |
1 The Company does not pay any remuneration to Non-Executive Directors except sittingfees for each Board/Committee meetings attended by them.
(B) Statement showing particulars of employees pursuant to the provisions of section197(12) of the Companies Act 2013 read with rule 5(2) of the companies (appointment andremuneration of Managerial personnel) rules 2014:
There were no persons employed for the full year ended March 31st 2020 who were inreceipt of the remuneration which in the aggregate was not less than Rs 6000000/- p.a.or in part of the year who were in receipt of Remuneration which in aggregate was not lessthan Rs.500000/- p.m