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TCFC Finance Ltd.

BSE: 532284 Sector: Financials
NSE: N.A. ISIN Code: INE389D01013
BSE 00:00 | 20 May 35.80 1.00
(2.87%)
OPEN

35.15

HIGH

35.95

LOW

34.00

NSE 05:30 | 01 Jan TCFC Finance Ltd
OPEN 35.15
PREVIOUS CLOSE 34.80
VOLUME 429
52-Week high 52.00
52-Week low 27.25
P/E 6.08
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 35.15
CLOSE 34.80
VOLUME 429
52-Week high 52.00
52-Week low 27.25
P/E 6.08
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TCFC Finance Ltd. (TCFCFINANCE) - Director Report

Company director report

To the Members of

TCFC FINANCE LIMITED

The Directors have pleasure in presenting the 30th Annual Report of theCompany together with the Audited Annual Accounts for the year ended March 312021.

FINANCIAL RESULTS

(' in lacs)

Year ended march 31 2021 Year ended march 31 2020
Total Revenue from operations 1164.57 123.12
Profit/(Loss)before tax 1104.21 (42.19)
Less: Provision for Tax 150.05 (50.97)
Net Profit/(Loss) after tax 954.16 8.78
Other Comprehensive Income 0.38 (0.90)
Total Comprehensive Income 954.55 7.88

OPERATIONS

Compared to previous year’s Profit of Rs. 8.78 lakhs this year your company hasearned a profit of Rs 1104.21 lakhs before provision of tax and after deducting tax itcomes to a profit of Rs 954.16 Lakhs

DIVIDEND

Your directors have recommended a dividend to be paid out of current year profits ofRs. 1.50 per equity share for the financial year ended 31st March 2021. The dividendpayable shall be subject to the approval of the Members at the ensuing Annual GeneralMeeting

MANAGEMENT DISCUSSION AND ANALYSIS

• Industry Structure and developments

2020 was a year that defined ‘what was’ and ‘what will be’. It wasa year that segregated the resilient from the vulnerable. Indian economy has beenexhibiting a weaker trend even before the onset of the COVID-19 Pandemic. Right from thecountry’s phased lockdown and slump in business activities to the gradual recoveryand the ongoing vaccination drive globally it’s been nothing short of a rollercoaster ride. The year unfolded quite dramatically as it brought along both unprecedentedcrisis and uncharted opportunities for the economy. The Reserve Bank of India’s (RBI)prompt response during the crisis helped avert a financial collapse. It implementedmeasures like slashing interest rates announcing fiscal stimulus package and allowingloan moratorium among others. Together these measures helped stabilise the economy.

The Indian economy is showing decisive and strong signs of recovery. These positivesignals are underpinned by the confidence post the vaccine roll out low interest ratesresurgence of consumer confidence and other investment attracting measures. With strongprospects of robust growth gaining grounds in consumption and investment along with alower base effect GDP is estimated to grow at 11.0% in FY22.

Non-Banking Financial Companies (NBFC) have rapidly emerged as an important segment ofthe Indian financial system. Moreover NBFCs assume significance in the small businesssegment as they primarily cater to the credit requirements of the unorganized sector suchas wholesale & retail traders small-scale industries and small borrowers at the locallevel.

NBFC is a heterogeneous group of financial institutions performing a wide range ofactivities like hire-purchase finance vehicle financing equipment lease financepersonal loans working capital loans consumer loans housing loans loans against sharesand investment etc.

• 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.

As a long-term strategy the Company has made investments in equities mutual funds andfixed income securities and is looking forward for a sustainable growth in its investeeCompanies in the coming years which would enhance the shareholders’ value.

• Segment Wise / Product Wise Performance

The Company operates in single business segment i.e. NBFC it has witnessedconsiderable growth in the last few years and is now being recognised as complementary tothe banking sector due to implementation of innovative marketing strategies introductionof tailormade products customer-oriented services attractive rates of return on depositsand simplified procedures etc

Your Company is engaged only in investment activities and no other business activities.Hence the requirement of segment-wise reporting is just for one segment.

• Business Outlook

The Company is mainly engaged in the business of financing and investment in bodiescorporate in order to yield greater revenue for its stakeholders. The Management of theCompany is looking for a steady growth of the Company and aims at maximizing theshareholders 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 investmentactivities the capital market developments may affect the gains and profitability of theCompany.

However the management is of the opinion that the Company can withstand such marketfluctuation as the investment portfolio of the Company is based on a conservative approachto maximize the returns 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 Auditorshave full and free access to all the information and records as considered necessary tocarry out their responsibilities.

• HUMAN RESOURCES:

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.

• Future Outlook:

As stated earlier Covid-19 may have a lasting impact on the Indian economy and that ofthe world. This will also impact the capital markets on which our company depends for itsinvestment 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.

cautionary statement:

Statements in the Management Discussion and Analysis that address expectations aboutthe future including but not limited to statement about Company’s strategy forgrowth product development market position expenditures and financial results areforward looking statements and these forward looking statements are based on certainassumptions and expectations of future events. The Company cannot guarantee that theseassumptions and expectations are accurate or will be realised

Actual results could differ materially from those expressed or implied. Importantfactors that could make a difference to the Company’s operations include amongothers economic conditions affecting demand/supply and price conditions in global anddomestic markets changes in government regulations Tax laws and other statutes andincidental factors.

CORPORATE GOVERNANCE

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 part of this Report. The requisite certificate from 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 financialyear with related parties were in the ordinary course of business and on an arm’slength 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 under Accounting Standard -18 are set out in note to the financial statements forming part of this Annual Report.

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

DEPOSITS

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 AUDITOR’ S REPORT

In accordance with the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s. GMJ & Co Chartered Accountants(Firm registration No. 103429W) were appointed as Company’s Statutory Auditors for 5years to hold office till the conclusion of the 32nd Annual General Meetingsubject to ratification by the members at every Annual General Meeting until the expiry ofthe period of original appointment as may be necessitated by the 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 312021 the Board ofDirectors hereby confirms that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 312021 and of theprofit/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 Annual Accounts 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.

• Re-appointment of Mrs. Tania Deol as a managing director & CEO of theCompany

The Nomination & Remuneration Committee and the Board have recommendedre-appointment of Mrs. Tania Deol as Managing Director and Chief Executive Officer of theCompany for the period of 5 years w.e.f July 12021 to 30th June 2026. Approval of theshareholders is sought for the same in the ensuing Annual General Meeting.

• 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 ofindependence as provided in section 149(6) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (‘the ListingRegulations’). The directors have also complied with the requirement of registrationof Independent 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.

employee remuneration

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is provided in "Annexure 1" forming part of thisreport.

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 website at the link:http://www.tcfcfinance.com/wp-content/uploads/2020/08/CORPORATE-SOCIAL-RESPONSIBILITY-POLICY-TCFC-Finance-Ltd.pdf

The 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 2020-2021 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 holdsadditional Board Meetings to address its specific requirements as and when required. Allthe decisions and urgent matters approved by way of circular resolutions are placed andnoted at the subsequent Board meeting.

During the financial year 2020-2021 four (4) 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 andCorporate Social Responsibility Committee.

The details with respect to the compositions roles terms of reference etc. ofrelevant committees are provided in the Corporate Governance Report of the Company whichforms 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. Thepolicy may be accessed on the Company’s websitehttp://www.tcfcfinance.com/wp-content/uploads/2020/08/ NOMINATION AND REMUNERATIONPOLICY-.pdf

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

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31st March 2021 is available on the Company’s website at thehttp://www.tcfcfinance.com/extract-of-annual-return/

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 for reportingfinancials statements as per the said requirements. The Audit committee actively reviewsthe adequacy and effectiveness of the Internal Financial control and suggests theimprovements 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 under review form apart of the financial statements.

VIGIL MECHANISM:

Pursuant to the provisions of section 177(9) (10) of the Companies Act 2013 andRegulation 22 of SEBI (LODR) Regulations 2015 a Vigil Mechanism for directors andemployees to report genuine concerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of the Company athttp://www.tcfcfinance.com/wp-content/ uploads/2019/06/Vigil MechanismPolicv-Whistle-Blower-Policv.pdf

Further there were no complaints received from the employees of the Company undervigil mechanism for the year under review. RISK MANAGEMENT

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) Regulatory Risks

(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 2020-2021 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 2021-2022 toBSE where the Company’s Shares are listed.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the concern status of the Company and its future operations

INDUSTRIAL RELATIONS

The industrial relations of the Company continued to be cordial throughout the year.

CONFIRMATION OF COMPLIANCE WITH THE SECRETARIAL STANDARDS ISSUED BY ICSI

The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India

impact due TO COVID-19

The Covid-19 pandemic outbreak across the world including India has resulted in mostcountries announcing lockdowns and quarantine measures that have sharply stalled economicactivities across the world. Government too has imposed lockdowns starting from March 242020. The Indian economy is impacted and would continue to be impacted by this pandemicand the resultant lockdown due to the contraction in industrial and services outputacross small and large businesses. The impact of the COVID -19 pandemic on TCFC’sfinancial statements including credit quality and provisions remains uncertain anddependent on the current and further spread of COVID -19 steps taken by the governmentand the RBI to mitigate the economic impact and also the time it takes for economicactivities to resume and reach the normal levels.

The Company has assessed the impact of the COVID-19 pandemic on its liquidity andability to repay its obligations as and when they are fall due. Such an assessment hasconsidered various stimulus packages announced by the Government of India which willdirectly or indirectly benefit NBFCs. Based on the sensitivity analysis conducted onstress scenarios management believes that the Company will be able to pay its obligationsas and when these become due in the foreseeable future. The Company would continue tofocus on maintaining adequate capital and ensuring liquidity at all points in time.

In assessing the recoverability of receivables intangible assets (including goodwill)deferred tax assets and investments the Company has considered internal and externalsources of information including credit reports economic forecasts and industry reports.Given the dynamic nature of the pandemic situation these estimates are subject touncertainty and maybe affected by severity and duration of the pandemic. In the event theimpacts are more severe or prolonged than anticipated this will have a correspondingimpact on the carrying value of financial assets the financial position and performanceof the Company.

ACKNOWLEDGMENT

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
Place: Mumbai Chairman
Date: 25th June 2021 (DIN:00019443)

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