To the Members of
TCFC FinAnCe LimiTed
The Directors have pleasure in presenting the 31st Annual Report of the Companytogether with the Audited Annual Accounts for the year ended March 31 2022.
( Rs in lacs)
| ||Year ended march 31 2022 ||Year ended march 31 2021 |
|Total Revenue from operations ||734.22 ||1164.57 |
|Profit/(Loss)before tax ||787.57 ||1104.21 |
|Less: Provision for Tax ||169.99 ||150.05 |
|Net Profit/(Loss) after tax ||617.58 ||954.16 |
|Other Comprehensive Income ||2.53 ||0.38 |
|Total Comprehensive Income ||620.11 ||954.55 |
Compared to previous year's Profit of Rs 1104.21 this year your company has earned aprofit of Rs 787.57 lakhs before provision of tax and after deducting tax it comes to aprofit of Rs 617.58 Lakhs
Your directors have recommended a dividend to be paid out of current year profits ofRs. 1.20 per equity share for the financial year ended 31st March 2022. The dividendpayable shall be subject to the approval of the Members at the ensuing Annual GeneralMeeting
MANAGEMENT DISCUSSION AND ANALYSIS
ndustry Structure andidevelopments
In 2021 the world economy grew 6.1% and was on a path to recovery from the severeimpact of COVID-19 related restrictions in economies around the world with increased debtlevels severe damage to human lives and disruption in global supply chain.
However 2022 started on a challenging note with the Russia-Ukraine conflict andfrequent and wider-ranging lockdowns in China which led to significant economic damage toglobal growth. Global growth is projected to slow to 3.6% in 2022 and 2023.
As India marches on a high-growth trajectory the country is set to remain one of thefastest growing economies in the world. The Economic Survey 2021-22 had estimated India'sGDP growth at 9.2% in FY 2021-22. The last quarter of FY 2021-22 witnessed the impact ofthe third wave caused by the Omicron variant and geopolitical conflicts between Russia andUkraine. In 2022 rising international commodity prices remain the biggest risk emanatingfrom the conflict as Russia and Ukraine are global suppliers of key commodities. India ispassing through an inflationary trend as the retail inflation touched 6.95% the highestin 17 months and the wholesale price index (WPI) hit 14.55% in March 2022 amid surgingfuel and food costs. Besides inflation the marginal cost of funds lending rate is risingwith interest rate tightening. Meanwhile Indian exports continue to rise particularlythe agriculture exports. India's agri-exports reached USD 50 Billion for FY 2021-22despite challenges posed by the COVID-19 pandemic in the form of high freight ratescontainer shortages etc. It is expected that consumption and demand will pick up paceonce the uncertainty and anxiety due to Covid-19 pandemic and Russia-Ukraine conflictrecede. This will in turn facilitate the private sector to inject investments to augmentproduction to meet the rising demand. In FY 2022-23 as per IMF the economic growth rateis expected at 8.2% making it the fastest-growing major economy in the world almosttwice faster than China's 4.4%. With a size of around 15% of Scheduled Commercial Banks'combined balance sheet the NBFC sector has been growing robustly in recent yearsproviding an alternative source of funds to the commercial sector in the face of slowingbank credit. NBFC-ND-SI (Systematically Important Non-Deposit accepting NBFCs) comprise85.4% of the total balance sheet size of the NBFC sector. Whereas the balance 14.6% isaccounted by NBFC-D (Deposit accepting NBFCs). Although in the FY 2021-22 the concernssurrounding the sector due to debt defaults amidst temporary asset liability mismatchesarose the inherent strength of the sector coupled with the Reserve Bank's continuingvigil on the regulatory and supervisory front will ensure that the growth of the sectoris sustained and liquidity fears are allayed.
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 madeinvestments in equities mutual funds and fixed income securities and is looking forwardfor a sustainable growth in its investee Companies in the coming years which would enhancethe 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.
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 investment activitiesthe capital market developments may affect the gains and profitability of the Company.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.
nternal Control Systems and Adequacyi
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 Auditors the Audit Committee and StatutoryAuditors have full and free access to all the information and records as considerednecessary to carry 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.
The financial year started with an unprecedented second wave of COVID-19 pandemic whichhas already had and continues to have a devastating impact on the world economic growthand ended with global tensions on account of geo-political scenario between Russia andUkraine. Financial market remained highly volatile with global supply chain and worldtrade being impacted negatively energy and commodity prices rose and uncertainty hoveredover investments.
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.
The Company continuously evaluates its investments in such companies to ensure that thesame meet the objective of ensuring maximisation of value to all its stakeholders in aprudent manner.
Statements in the Management Discussion and Analysis that address expectations aboutthe future including but not limited to statement about Company's strategy for growthproduct development market position expenditures and financial results are forwardlooking statements and these forward looking statements are based on certain assumptionsand expectations of future events. The Company cannot guarantee that these assumptions andexpectations are accurate or will be realised. Actual results could differ materially fromthose expressed or implied. Important factors that could make a difference to theCompany's operations include among others economic conditions affecting demand/supplyand price conditions in global and domestic markets changes in government regulationsTax laws and other statutes 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 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's lengthbasis. 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 therelated party transactions as required under Accounting Standard - 18 are set out in noteto 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
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 33rd Annual General Meeting subject toratification by the members at every Annual General Meeting until the expiry of the periodof original appointment as may be necessitated by the Act from time to time. The Ministryof Corporate Affairs vide its notification dated 7th May 2018 has done away with therequirement of the ratification of the appointment of Statutory Auditors at every AnnualGeneral Meeting and hence M/s. GMJ & Co. shall continue as Statutory Auditors for theremaining period of the term till the conclusion of the 33rd Annual General Meeting of theCompany.
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 2022 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 31 2022 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 adequate and were operating effectively; (f) propersystems have been devised to ensure compliance with the provisions of all applicable lawsand 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 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 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 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 CorporateSocial Responsibility Committee is constituted in accordance with the provisions ofSection 135 of the Companies Act 2013 read with rules made thereunder. The Annual Reporton CSR activities for the financial year ended 2021-2022 is annexed herewith 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 year2021-2022 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 and CorporateSocial 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.
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 thisreport. The report is self-explanatory and do not call for any further comments.
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 reporting financialsstatements as per the said requirements. The Audit committee actively reviews the adequacyand effectiveness of the Internal Financial control and suggests the improvements for thesame.
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 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_Mechanism_Policy-Whistle-Blower-Policy.pdf
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) Regulatory Risks
(iii) Human Resources Risks
(iv) Strategic Risks
(v) IT & cyber related risk.
inFORmATiOn ReQUiRed UndeR SexUAL HARASSmenT OF WOmen AT WORKPLACe (PReVenTiOnPROHiBiTiOn & RedReSSAL) ACT 2013 And RULe 8 OF COmPAnieS (ACCOUnTS) RULeS 2018 ASAmended:
Your Company is in compliance with respect to the Sexual Harassment of Women at theworkplace (Prevention Prohibition & Redressal) Act 2013 endeavours to provide aconducive work environment to the employees. During the financial year 2021-2022 theCompany has not received any complaint of sexual harassment against any employees of theCompany.
LiSTinG WiTH STOCK exCHAnGeS:
The Company confirms that it has paid the Annual Listing Fees for the year 2022-2023 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
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
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31st March 2022 is available on the Company's website www.tcfcfinance.com
TRAnSFeR OF UnCLAimed diVidend AmOUnT TO THe iePF:
The company had duly transferred the amount of Rs. 557783/- unclaimed dividendpertaining to the F.Y. 2013-14 to the IEPF However due to oversight of the sharedepartment there has been delay in transferring the partial amount of unclaimed dividendfor the F.Y. 2013-2014 amounting to Rs.100256/- to the Investors Education andProtection Funds under Section 125 of the Companies Act 2013 read with the InvestorsEducation and Protection Authority (Accounting Audit Transfer and Refund) Rules 2016.The company has taken necessary steps to resolve the issue and is in the process ofcomplying the same.
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: 12th may 2022 ||( din :00019443) |