To the Members of
TCFC FINANCE LIMITED
The Directors have pleasure in presenting the 27th Annual Report of theCompany together with the Audited Annual Accounts for the year ended March 31 2018.
1. FINANCIAL RESULTS
| || |
Year ended March 31 2018
Year ended March 31 2017
| || || |
| || |
(Rs in lacs)
(Rs in lacs)
|Profit/Loss before Depreciation and || |
|Taxes || || |
|Less: Depreciation || |
|Profit/Loss before tax || |
|Less: Provision for Tax || |
|Net Profit/(Loss) after tax || |
|Proposed dividend (including tax) || |
|Carried to General Reserve || |
|Carried to Statutory Reserve || |
|Surplus balance carried to Profit and Loss Account || |
| || || |
Compared to previous year's Loss of Rs 709.37 lakhs. this year yourcompany has made a Profit of Rs 498.87 lakhs before provision of tax and after deductingtax it comes to
Profit of Rs 387.96 Lakhs
Your Directors have recommended a dividend to be paid out of currentyear profits of Rs 1.50 per equity share for the financial year ended 31st March 2018amounting to
Rs 18924066 (inclusive of a tax of Rs 3200872)
The dividend payable shall be subject to the approval of the Members atthe ensuing Annual General Meeting.
4. MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments
Your Company is engaged and registered as a NBFC currently the NBFCspace and industry as whole is on a road to growth as is the trend seen the interest rateare growing southward and the markets on a upward with record highs on overall analysisof the NBFC sector the management is very optimistic about the future growth and prospectsof the Company.
Opportunities and Threats
Being a primarily investment company fluctuating markets and interestrate pose a threat to the business of the Company However the same can be converted intoopportunity by proper planning and implementation.
Segment Wise / Product Wise Performance
As the company is only in one line of business product wise disclosureof performance is not required to be made.
The Management of the Company is looking for a steady growth of theCompany and aims at maximizing the shareholders wealth by way of earning maximum profitsat low investment costs.
Risks and areas of concern
Risk of market fluctuation shall always be a major risk associated withthe Company however the management is of the opinion that the Company can withstandthrough in any kind of market fluctuation as the investment portfolio of the Company isrelatively stable and less prone to market fluctuations.
Internal Control Systems and Adequacy
The adequacy of the internal control system is reviewed by the AuditCommittee of the Board of Directors. Your
Company has taken proper and sufficient care for the maintenance ofadequate accounting records as required by various Statutes Internal Auditor the AuditCommittee and Statutory Auditors have full and free access to all the information andrecords as considered necessary to carry out their responsibilities.
The Company's current activities do not require engagement ofsignificant human resource. However requisite qualified and experienced personnel havebeen engaged to take care of organization need of human resource. With the sign of growthif and when seen the Company will engage requisite human resource.
The future outlook of Indian financial markets looks positive.
It can be affected by unfavorable global cues but with strong policiesfrom the Indian government like Make in India Digital India Startup India changes inFDI norms there is positivity in the Indian business environment. Controlled inflationand increasing GDP growth are favorable signals for the Company.
The Company's focus will be on its regular trading activities andmaking long term strategic investments in various existing and new ventures if any.
5. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporategovernance and adhere to the corporate governance requirements set out by SEBI. TheCompany has also implemented several best corporate governance practices as prevalentglobally. The report on Corporate Governance as stipulated under the SEBI (LODR)Regulations 2015 forms an integral 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
6. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered into by the Companyduring the financial year with related parties into 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 inaccordance with the policy of the Company on materiality of related party transactions.
The details of the related party transactions as required underAccounting Standard - 18 are set out in note to the financial statements forming part ofthis Annual Report.
The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on Company'swebsite at http:// www.tcfcfinance.com/wp-content/uploads/2018/07/Policy on Related PartyTranscations-revised.pdf
Being a non-deposit accepting NBFC Company your Company has notaccepted any deposits from the public / members under Section 73 of the Companies Act2013 read with Companies (Acceptance of Deposits) Rules 2014 during the year underreview.
8. STATUTORY AUDITORS
In accordance with the provisions of Section 139 of the Companies Act2013 read with Companies (Audit and Auditors) Rules 2014 M/s. GMJ & Co CharteredAccountants (Firm registration No. 103429W) were appointed as Company's StatutoryAuditors in the Company's 25th Annual General Meeting to hold office till the conclusionof the 28th Annual General Meeting subject to by the members at every Annual General
Meeting until the expiry of the period of original appointment as maybe necessitated by the Act from time to time.
However the Ministry of Corporate Affairs vide its notification dated7th May 2018 has done away with the requirement of the of the appointment of StatutoryAuditors at every Annual General Meeting and hence M/s. GMJ & Co. shall continue asStatutory Auditors for the remaining period of the term till the conclusion of the 28thAnnual General Meeting of the Company.
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
9. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation tothe audited financial statements of the Company for the year ended March 31 2018 theBoard of Directors hereby confirms that:
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; (b) such accounting policies have been selected and applied consistently andthe Directors 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 2018 and of the profit/loss of the Company forthat year;
(c) proper and sufficient care was taken 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;(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 bythe Company and that such internal financial controls are adequate and were operatingeffectively; (f) proper systems have been devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Director Retiring by Rotation:
In terms of Section 152 of the Companies Act 2013 Mr. Dharmil BodaniDirector of the Company is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. The Board recommends the samefor your approval.
Declaration by independent directors
The independent directors have submitted the declaration ofindependence as required under section 149(7) of the Companies Act 2013 stating thatthey meet the criteria of independence as provided in section 149(6) of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(the Listing Regulations')
Key managerial Personnel
During the year under review there was no change in the Key managerialpersonnel of the Company.
11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGNEXCHANGE EARNINGS AND OUTGO
Your Company is not engaged in any manufacturing activity and thus itsoperations are not energy intensive. However adequate measures are always taken to ensureoptimum utilization and maximum possible saving of energy.
There was no foreign exchange transaction entered into by the Companyduring the year under review.
12. EMPLOYEE REMUNERATION
The information required under Section 197 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company is provided in "Annexure 1" formingpart of this report.
13. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee (CSR Committee) hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy may be accessed on the Company's website at the link:http://tcfcfinance.com/wp-content/uploads/2015/06/
The Annual Report on CSR activities for the financial year ended2016-2017 and 2017-2018 is annexed herewith as
14. MEETINGS OF THE BOARD:
The Company holds at least four Board meetings in a year one in eachquarter inter-alia to review the financial results of the Company. The Company alsoholds additional Board
Meetings to address its specific requirements as and when required.All the decisions and urgent matters approved by way of circular resolutions are placedand noted at the subsequent Board meeting.
During the financial year 2017-18 four (4) Board Meetings wereconvened and held. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013 and the SEBI (LODR) Regulations 2015.
The details of the Board meetings held during the year along with theattendance of the respective Directors thereat are set out in the Corporate GovernanceReport forming part of this Annual Report
15. COMMITTEES OF THE BOARD:
With a view to have a more focused attention on business and for bettergovernance and accountability the Board has constituted the mandatory committees viz.Audit Committee Stakeholders' Relationship Committee Nomination and RemunerationCommittee and Corporate Social Responsibility Committee.
The details with respect to the compositions roles terms of referenceetc. of relevant committees are provided in the Corporate Governance Report of theCompany which forms part of this Annual Report.
16. ANNUAL EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a structuredquestionnaire was prepared after taking into consideration the various aspects of theBoard's functioning composition of the Board and its Committees culture execution andperformance of specific duties obligations and governance. The performance evaluation ofthe Independent Directors was completed. The performance evaluation of the Chairman andthe Non-Independent Directors was carried out by the Independent Directors. The Board ofDirectors expressed their satisfaction with the evaluation process
17. NOMINATION AND REMUNERATION
The Board of Directors has framed a policy which lays down a frameworkin relation to remuneration of Directors Key Managerial Personnel and Senior Managementof the Company. This policy also lays down criteria for selection and appointment of BoardMembers.
18. SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act and Rules made there under M/s.AABID & CO Practicing Company Secretary has been appointed as Secretarial Auditor ofthe Company. The report 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.
19. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 is enclosed as "Annexure4" to this report.
20. INTERNAL AUDIT & CONTROLS
The Company has adequate system of internal financial control and riskmitigation system commensurate with the size of the Company and nature of its business.The Company is following all the applicable Accounting Standards for properly maintainingthe books of accounts and reporting financial statements. The Audit committee activelyreviews the adequacy and effectiveness of the Internal Financial control and suggests theimprovements for the same.
21. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Since the Company is a registered entity under the Reserve Bank ofIndia to conduct the business of Non Banking Financial Services pursuant to the sectionof 186 (11) (a) (b) of the Companies Act 2013 the company is exempted from complyingwith the provisions.
Further details of Investments made by the Company during the yearreview form a part of the financial statements.
22. VIGIL MECHANISM:
Pursuant to the provisions of section 177(9) (10) of the Companies Act2013 and Regulation 22 of SEBI (LODR) Regulations 2015 a Vigil Mechanism for directorsand employees to report genuine concerns has been established.
The Vigil Mechanism Policy has been uploaded on the website of theCompany at http://www.tcfcfinance.com/ wp-content/uploads/2018/07/Whistle Blower PolicyVigil Mechanism Policy.pdf
Further there were no complaints received from the employees of theCompany under vigil mechanism for the year under review.
23. RISK MANAGEMENT
Risk management is embedded in your Company's operating framework. YourCompany believes that managing risks helps in maximizing returns. The Company's approachto addressing business risks is comprehensive and includes periodic review of such risksand has established a framework for mitigating controls and reporting mechanism of suchrisks. Some of the risks that the Company is exposed to are: (i) Financial Risk (ii)Regulatory Risks (iii) Strategic Risks
24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
During the financial year 2017-18 Company has not received anycomplaint of sexual harassment against women employees of the Company.
25. LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for thefinancial year 2018-2019 to BSE where the
Company's Shares are listed.
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the
Regulators/Courts that would impact the going concern status of theCompany and its future operations
27. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
During the year under review the amount of unclaimed and unpaiddividend amounting to Rs 655252/- was transferred to the IEPF.
Also pursuant to the provisions of the Investor Education ProtectionFund Authority (Accounting Audit Transfer and
Refund) Rules 2016] the Company has already filed the necessary formand uploaded the details of unpaid and unclaimed amounts lying with the Company as on thedate of last AGM (i.e. 22nd August 2017) with the Ministry of Corporate Affairs.
28. TRANSFER OF UNCLAIMED SHARES TO INVESTOR EDUCATION AND PROTECTIONFUND
The Company has duly transferred 204322 shares which remainedunclaimed from the financial year 2009-2010 to the IEPF Demat Account of the Authoritymaintained with NSDL.
Unclaimed dividend for Financial year 2010-2011 shall become due fortransfer to the said fund. Members are requested to verify their records and send claimif any by writing to the Company at investorservices@tcfcfinance com before the amountbecomes due for transfer to the said fund.
Pursuant to section 124(6) of the Companies Act 2013 as amended andthe IEPF Rules all shares in respect of which dividend has not been paid or claimed forseven consecutive years or more shall be transferred to demat account of the IEPFAuthority. In due compliance of the provisions of rule 6(3) of the IEPF Rules the Companywill send individual letters through speed post to all such members requesting them toclaim the amount of unpaid dividend before the Company proceeds with the transfer ofrelated shares to Demat account of the IEPF Authority. The Company will also be publishingnotice in the newspapers intimating the members of the said provisions and these detailswill be made available on the Company's website https://www.tcfcfinance.com .
As provided under the IEPF Rules a member can claim such dividend andshares transferred to the fund by following the procedure prescribed in the IEPF Ruleswhich is available on the Company's website https:www.tcfcfinance.com
The Board of Directors thanks Reserve Bank of India all other BanksStock Exchange of Mumbai and Shareholders for their continued support besides employees atall levels.
By Order of the Board For TCFC Finance Limited
Atul Desai Chairman (DIN:00019443)
Place: Mumbai Date: 9th May 2018