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TCI Finance Ltd.

BSE: 501242 Sector: Financials
NSE: TCIFINANCE ISIN Code: INE911B01018
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VOLUME 15
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TCI Finance Ltd. (TCIFINANCE) - Director Report

Company director report

To

The Members of TCI Finance Limited

Your directors takes pleasure in presenting the 47th Annual Report of the Company alongwith the Audited Accounts for the year ended March 31 2021.

The highlights of the Financial Results are as follows:

(Rs. in Lakhs)

Particulars

As at March 31 2021

As at March 31 2020

Revenue from Operations

425.45

421

Profit/(loss) before Interest depreciation &Taxation

(549.59)

(4835)

Financial Charges

224.34

392

Depreciation

2.82

2

Profit/(Loss) before tax

(776.75)

(5229)

Exceptional Items

-

--

Provision for tax:
Current Tax

-

-

Deferred Tax Tax relating to earlier years

:

3

Profit/(Loss) after tax

(776.75)

(5232)

Balance brought forward from previous year

73.32

2684.54

Transferred to Reserve Fund

-

-

Balance Carried forward

(703.42)

73.32

DIVIDEND

Your Directors have not recommended payment of dividend for the financial year endedMarch 312021 since it is proposed to retain the same in the business.

SHARECAPITAL

The authorized share capital of the Company is Rs. 20 Crore divided into 20000000equity shares of Rs. 10/-eachand paid-up equity share capital as on March 31 2021 is12.87 Crore consisting of 12872493 equity shares of Rs. 10/- each. There are 1323812forfeited shares. Details of the same has been disclosed in Note No. 15 of financialstatements. There was no public issue rights issue bonus issue or preferential issueetc. during the year under review. The Company has not issued shares with differentialvoting rights or sweat equity shares.

HOLDING SUBSIDIARY ASSOCIATE COMPANIES

During the period under review company has no subsidiary holding or associate company.

DEPOSITS

The Company is a Non Banking Finance Company and therefore The Companies (Acceptance ofDeposits) Rules 2014 are not applicable.

BUSINESS PERFORMANCE/FINANCIAL OVERVIEW

During the Financial Year 2020-21 the Companyincurred a loss of Rs. (7.76) Croresagainst the loss of Rs. (52.29) Cr in the previous year. The Loss after Tax is Rs. (7.76)Cr as against loss of Rs. (52.32) Cr in the previous year.

IMPACT OF COVID-19

In terms of the Covid 19 regulatory package of the RBI issued from time to timethecompany has availed the moratorium of 6 months for the term loan availed by thecompany from a financial institution.The company has not granted any moratorium to any ofits borrowers.

There remains a high level of uncertainty about the impact and time required for theeconomic activity to normalize.The extent to which the Covid 19 epidemic will impact thebusiness and financial results is at this juncture dependent on future developments whichare highly uncertain.

ANNUALRETURN

Annual Return in Form MGT 7 is being uploaded on the website of the Company at thefollowing link: https://www.tcifl.in/ investors/

RESERVE

No amount has been transferred to the Reserve Fund for the year ended as on 31st March2021.

NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES

The Board met 4 times during the financial year. The meeting details are provided inCorporate Governance report that forms part of this Annual Report. The maximum intervalbetween any two meetings did not exceed 120 days as prescribed in the Companies Act 2013.However MCA Vide its general circular no. 11/2020 dated 24th March 2020 and generalcircular no. 08/2021 dated 3 May 2021 had given a relaxation that a time gap between twoconsecutive meetings of the Board can be 180 days till 30thSeptember 2021. Further SEBIvide its circular dated 19th March 2020 and 26th June 2020 had exempted the Companiesfrom observing the maximum stipulated time gap between two board and audit committeemeetings. All meetings were convened in compliance with the Companies Act and SEBI (LODR)Regulations. During the year under review there were 4 Audit Committee meetings 3Nomination and Remuneration committee meetings and 1 Stakeholder Relationship Committeemeetings.

DIRECTORS'RESPONSIBILITYSTATEMENT

As required under clause (c) of sub-section (3) of section 134 of the Act directorsto the best of their knowledge and belief state that:

• In the preparation of the Annual Accounts for the year ended March 312021 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

• The directors have selected such accounting policies and applied themconsistently and made Judgement and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the Company for that period.

• The directors had 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.

• The directors had prepared the annual accounts on 'going concern' basis.

• The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

• the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)

During the year under review there were no frauds reported by the Statutory Auditorsto the Audit Committee or the Board under section 143(12) of the Act.

DECLARATION FROM INDEPENDENT DIRECTORS

The Independent Directors have submitted the declaration of independence as requiredpursuant to section 149(7) of Companies Act 2013 stating that they meet the criteria ofIndependence as provided in section 149(6) of the said Act and Regulation 16(1)(b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations2015 and that they are notaware of any circumstance or situation which exist or may be reasonably anticipated thatcould impair or impact their ability to discharge their duties with an objectiveindependent judgment and without any external influence.

The Board took on record the declaration and confirmation submitted by the independentdirectors regarding them meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

In accordance with the provisions of Section 150 of the Act read with the applicableRules made thereunder the Independent Directors of the Company have registered themselvesin the data bank of Independent Directors maintained by the Indian Institute of CorporateAffairs Manesar ["llCA'']. The Independent Directors unless exempted are requiredto pass an online proficiency selfassessment test conducted by llCA within one year fromthe date of their registration in the llCA databank.

Pursuant to the above the Company has received Declarations of compliance under Rules6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules 2014from all the Independent Directors of the Company confirming that they have registeredtheir names in the data bank of Independent Directors maintained with the IICA.

DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178

Your Company has also adopted the Policy on Remuneration of Directors and theRemuneration Policy for Key Managerial Personnel and Employees of the Company inaccordance with the provisions of sub-section (4) of Section 178 of the Act.

The criteria for determining qualifications positive attributes and independence of aDirector and the Remuneration Policies for Directors Key Managerial Personnel and otheremployees have been discussed in detail in the Report on Corporate Governance.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The Company is a Non Deposit taking NBFC and therefore section 186 of Companies Act2013 are not applicable to the Company. The details of loans Guarantees and investmentsare given in the Financial Statements.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by theReserve Bank of India ("RBI") from time to time.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The main business of the Company is financing activities and all loans granted torelated parties were in the ordinary course of business.No new transactions with relatedparties were entered during the year pursuant to section 188 of the Companies Act 2013and regulation 23 of SEBI (LODR) Regulations 2015.

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 Rulesthere under and the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. This Policy was considered and approved by the Board and has been uploaded on thewebsite at: http://www.tcifl.in/ pdf/RelatedPartyTransactionPolicy.pdf

All related party transactions entered by the Company are disclosed in the financialstatements. The same has been disclosed in the financial statement in compliance withAccounting Standard as applicable.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

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) of theCompanies(Accounts) Rules2014 is not provided.

FOREIGN EXCHANGE EARNINGS AND OUT GO

The Company does not have any Foreign Exchange Earnings and out go in the year underreview.

RISK MANAGEMENT POLICY

The Company has in place adequate checks for management of risks and hence has notdeveloped or implemented any Risk Management Policy. The Board is of the opinion thatthere are no such elements of risk which may threaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of section 135 of the Companies Act 2013 are not applicable to theCompany.

Accordingly the Board of Directors of the Company at its meeting held on May 22 2019have dissolved the CSR Committee.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligation & Disclosure Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees. The manner in which the evaluation has been carried outhas been explained hereunder.

The evaluation framework for assessing the performance of Directors comprises ofvarious key areas such as attendance at Board and Committee Meetings quality ofcontribution to Board discussions and decisions strategic insights or inputs regardingfuture growth of the Company and its performance ability to challenge views in aconstructive manner knowledge acquired with regard to the Company's business/ activitiesunderstanding of industry and global trends etc.

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 off low 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.

A separate exercise was carried out by the Nomination and Remuneration Committee of theBoard to evaluate the performance of individual Directors who were evaluated on severalparameters such as level of engagement andcontribution independence of judgmentsafeguarding the interest of the Company and its minority shareholders and knowledgeacquired with regard to the Company's business/activities.

The performance evaluation of the Non-Independent Directors and the Board as a wholewas carried out by the Independent Directors. The performance evaluation of the Chairmanof the Company was also carried out by the Independent Directors taking into account theviews of the Executive Directors and Non-Executive Directors.

The Directors have expressed their satisfaction with the evaluation process.

MEETINGS OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors was also held during the financial year forthe evaluation of the performance of Non Independent Director performance of the board aswhole and that of the Chairman. The Meetings were conducted in an informal manner withoutthe presence of the Whole-time Directors the Non-Executive Non-Independent Directors orany other Management Personnel.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A.Change in Directorate

i. Resignation Mr. Ashok Kumar Goyal (DIN: 05129899) as an Independent Director

Mr. Ashok Kumar Goyal has resigned as an Independent Director of the Company w.e.f 13thJanuary 2021 due to his ill health. The same was acknowledged by the Board andaccordingly intimated to the ROC and Stock Exchanges.

ii. Appointment/re-appointment of directors

The Board of Directors at its meeting held on November 12 2020 after taking intoaccount the report of their performance evaluation and the recommendation of theNomination and Remuneration Committee appointed Mr. Rajesh Sharma (DIN: 08589058) as anadditional Non-executive Non- Independent director of the Company subject to the approvalof the shareholders in the 47th Annual General Meeting of the Company.

Board of Directors is of the opinion that Mr. Rajesh Sharma possess relevantexperience expertise integrity and proficiency for his appointment as anNon-executiveNon- Independent Director of the Company.

Mr. Rajesh Sharma is not debarred or disqualified from holding the office of Directorby virtue of any SEBI Order or any other such authority pursuant to circulars dated 20thJune 2018 issued by BSE Limited and the National Stock Exchange of India Limitedpertaining to enforcement of SEBI Orders regarding appointment of Directors by the listedcompanies.

ii) The Board of Directors at its meeting held on November 12 2020 after taking intoaccount the report of their performance evaluation and the recommendation of theNomination and Remuneration Committee appointed Mr. Rajesh Kundra (DIN: 08959859) as anadditional Non-executive Independent director of the Company subject to the approval ofthe shareholders in the 47th Annual General Meeting of the Company.

Board of Directors is of the opinion that Mr. Rajesh Kundra possess relevantexperience expertise integrity and proficiency for his appointment as an Non-executiveIndependent Director of the Company. However the online proficiency self assessment testconducted by the Indian Institute of Corporate affairs is still required to be given byMr. Rajesh Kundra and shall be completed within the time period prescribed for the saidpurpose.

Mr. Rajesh Kundra is not debarred or disqualified from holding the office of Directorby virtue of any SEBI Order or any other such authority pursuant to circulars dated 20thJune 2018 issued by BSE Limited and the National Stock Exchange of India Limitedpertaining to enforcement of SEBI Orders regarding appointment of Directors by the listedcompanies.

iii) The Board of Directors at its meeting held on November 122020 after taking intoaccount the report of their performance evaluation and the recommendation of theNomination and Remuneration Committee appointed Mr. Y S R Rajeev Kumar (DIN: 08741595) asan additional Non-executive Non- Independent director of the Company subject to theapproval of the shareholders in the 47th Annual General Meeting of the Company.

Board of Directors is of the opinion that Mr. Y S R Rajeev Kumar possess relevantexperience expertise integrity and proficiency for his appointment as anNon-executiveNon- Independent Director of the Company.

Mr. Y S R Rajeev Kumar is not debarred or disqualified from holding the office ofDirector by virtue of any SEBI Order or any other such authority pursuant to circularsdated 20th June 2018 issued by BSE Limited and the National Stock Exchange of IndiaLimited pertaining to enforcement of SEBI Orders regarding appointment of Directors by thelisted companies.

iv. Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 Ms. MeeraMadhusudan Singh (DIN:00415866) retires by rotation and being eligible has offeredherself for re-appointment at the ensuing 47th Annual General Meeting of the Company.

Prescribed details of Ms. Meera Madhusudan Singh director (DIN: 00415866) who isseeking re-appointment are given in the Notice of AGM.

Ms. Meera Madhusudan Singh (DIN: 00415866) is not debarred or disqualified from holdingthe office of Director by virtue of any SEBI Order or any other such authority pursuantto circulars dated 20th June 2018 issued by BSE Limited and the National Stock Exchangeof India Limited pertaining to enforcement of SEBI Orders regarding appointment ofDirectors by the listed companies.

B. Change in KMP

There is change in Key Managerial Personnel during the year under review.

1. Mr. Ramesh Sivaraman Chief financial officer of the company has given aresignation notice account of peronal reason.

2. Mr. Amit Kumar Ray appointed as Chief Financial officer of the company w.e.f. 31stJuly 2020.

3. Cessation of Mr. Ramesh Sivaraman as Manager of the Company

Mr. Ramesh Sivaramanwhose tenure as manager of the Company expired on 30th June 2020was re-appointed as manager of the Company by the Board of Directors of the Company attheir meeting held on 31st July 2020 w.e.f 1st July 2020 for a period of 3 years'subject to the approval of the Shareholders at the 46th AGM of the Company. However atthe 46th AGM of the Company held on 29th September 2020 the shareholders of the Companydid not approve the appointment of Mr. Ramesh Sivaraman as Manager of the Company and Mr.Ramesh Sivaraman was ceased to be a Manager of the Company.

*Mr. Amit Kumar Ray has resigned from the post of Chief financial officer of thecompany w.e.f 23rd April 2021.

* Mr. Amit Kumar Ray has appointed as Manager of the company for a period of 3 yearsSubject to the approval of shareholders of the company w.e.f. 23rd April2021.

*Mr. Santhosh Kumar has appointed as Chief financial officer of the company w.e.f 23rdApril 2021.

*Ms. Srishti Soni resigned from the post of Company Secretary & Compliance officerof the Company w.e.f 3rd July 2021

*Ms. DeekshaVerma appointed as Company Secretary & Compliance officer of theCompany w.e.f. 30th September 2021

Detailed information on the directors is provided in the Corporate Governance Report.

DECLARATION BY DIRECTORS

All the Directors of the Company have confirmed that they satisfy the "fit andproper" criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/ 03.10.119/2016-17 dated 1st September 2016 and that they are not disqualified frombeing appointed/ continuing as Directors in terms of section 164(2) of the Companies Act2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURT OR REGULATORS

During the year under review there were no significant and material orders passed bythe court of regulators.

Further the Company has been served with a copy of petition vide petition no. CP NO.810/241/HDB/2019 filed by Mrs. Neera Agarwal and 2 others under Section 241 & 242 readwith section 130 213 and 244 of the Companies Act 2013 before the National Company lawTribunal (NCLT).

The first hearing of the said petition was held on 17.12.2019 and the Hon'ble NCLTbench has stated that the requirements under section 244 of the Companies Act arefulfilled and directed the Company to file their detailed counters in relation to theaforesaid matter.

Further in the order dated 17th January 2019 the petition was admitted on the factsthat requirement under section 244 of the Companies Act 2013 were fulfilled. Further thetribunal directed all the respondents of the Company to file detailed counters in relationto the interim prayers.

Moreover A NCLT case against M/s AmritJal Ventures Private Limited in which TCIFinance Limited is holding 10% shares been filed by M/s Sew Infrastructure Limited whichhas been admitted on May 072019.

Your Company as at the year ended March31 2021 has financial exposures in the form ofinvestments Optionally Convertible Debentures amounts receivable by the Company andguarantees given by the Company on behalf of AmritJal Ventures Private Limited and itssubsidiaries. Details of the same are given in the standalone financial statements.

NCLT case filed against M/s Mahendra Investment Advisors Private Limited in NCLTHyderabad Bench on 28th April 2021 vide petition application no. CP (IB) No.463/7/HDB/2019 under section 7 of IBC.

In which our Company ("TCI Finance Limited") is having a carrying value ofadvances given to MIAPL to the tune of Rs. 43.33 Cr as on 30th June 2021 refer note no.32 of Financial Statement.

The total claim amount lodged is Rs. 459163203/-.

The suspended director has filed an appeal in NCLAT against the said order and theHon'ble NCLAT has stayed the CIRP proceedings of CIRP. The next date of hearing is postedon 15th December 2021 refer note no. 32 of Financial Statement.

DELISTING

The Board has considered and approved the proposal of Voluntary delisting of EquityShares of the Company from National Stock Exchange of India Limited ("NSE")without giving any exit opportunity to its shareholders in accordance with Regulation 6& 7 of Securities and Exchange Board of India(Delisting of Equity shares) Regulations2009 ("SEBI Delisting Regulations"). Company has complied with the process ofdelisting of equity shares from NSE and it is pending for delisting by NSE.

The Equity shares of the Company would remain listed on the BSE Limited("BSE")

RE-CLASSIFICTION

Company received the request from Gati Limited Promoter Group Company for theirre-classification as a Public shareholder in terms of Regulation 31A of SEBI (LODR)Regulations 2015. The said request approved by the Board in its meeting held on July312020 and subsequently by the shareholders in their EGM held on January 30 2021. Thecompany has made an application to BSE Limited ("BSE") and National StockExchange of India Limited ("NSE") and same is currently under process.

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 internalauditorsstatutory auditors and external agencies (if required) and there views performedby management team and the relevant Board Committees including the Audit Committee theBoard is of the opinion that the Company's Internal Financial Controls with reference tothe financial statements were adequate and effective during the financial year 2020-21 andyour Company is constantly endeavouring to improve the standards of internal control invarious areas and taking steps to strengthen the internal control system to make itcommensurate and effective with the nature of its business.

Further the statutory auditors of your Company have also issued an attestation reporton internal control over financial reporting (as defined in section 143 of Companies Act2013) for the financial year ended March 312021 which forms part to the StatutoryAuditor's Report.

MAINTENANCE OF COST RECORDS

The provisions of Cost records as specified by the Central Government under sub-section(1) of section148 of the Companies Act 2013 are not applicable to the Company.

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 of theemployees of the Company for the financial year 2020-21 percentage increase inremuneration of each Director Chief Financial Officer Manager and Company Secretaryduring the financial year 2020-21 are as under:

Non-Executive Directors (Refer Note-1)

Ratio to median remuneration

% increase in remuneration in the financial year

Mr. Dhanpat Ram Agarwal
Chairman-Independent Director

-

-

Mr. Mahendra Agarwal Promoter & (Non-Executive & Non-Independent Director)
*Mr. Ashok Kumar Goyal- Independent Director
Ms.Meera Madhusudan Singh Non Executive & Non-Independent Director
**Mr. Rajesh Kundra Non-Executive & Independent Director

-

-

***Mr. Rajesh Sharma Non-Executive & Non-Independent Director

--

-

****Mr. Y S R Rajeev Kumar Yeerla Non-Executive & Non-Independent Director
Executive Directors/KMP
*****Mr.Ramesh Sivaraman - Manager - Chief Financial officer

9.34:1

9.20%

******Mr. Amit Kumar Ray Chief Financial Officer

1.6:1

5.00%

Ms.Srishti SoniCompany Secretary

1:1

13.49%

*Resigned with effect from 13th January 2021

**Appointed w.e.f 12th November 2020

***Appointed w.e.f 12th November 2020

****Appointed w.e.f 12th November 2020

***** cfo upto 31st July 2020

***** Manager upto 29th September 2020

******Appointed w.e.f 31st July 2020

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 median remuneration of employees in the financialyear: -1%

iii) The number of permanent employees on the rolls of company : 3

iv) Average percentage increase made in the salaries of employees other than themanagerial personnel in the financial year i.e. 2020-21 was 6% where as the increase inthe percentage of managerial remuneration for the same financial year was 9.23%. The sameis in line with the Industry Standards.

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 of ManagerialPersonnel) 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) Rules2014 is given below:

a) Name of the employee

Ramesh Sivaraman

Srishti Soni

Amit Ray

V. Santosh Kumar

b) Designation of the employee

Manager

Company Secretary

CFO

Executive- Accounts

c) Remuneration received; (' in lakhs)

5460000

584492

959192

637414

d) Nature of employment whether contractual or otherwise;

Permanent

Permanent

Permanent

Permanent

e) Qualification and experience of the employee;

CA Exp: 29 years

CS Exp: 4 years

B.Com (Hons) Exp: 18 years

M.Com Exp: 27 years

f) Date of commencement of employment;

22-Oct-96

03-Dec-2018

03-Apr-2002

23-Aug-1994

g) Age of such employee;

52

28

42

55

h) Last employment held by such employee before joining the company

Manager Asia Pacific Investment Ltd.

Company Secretary & Compliance officer- Proseed India Limited

Manager Accounts Gati Kausar India Limited

i) % of equity shares held by the employee in the company;

0.00 (960 Shares)

Nil

0.00 (1839 Shares)

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

*Mr. Ramesh Sivaraman resigned from the post of Manager w.e.f 29th September 2020.

CORPORATE GOVERNANCE

Pursuant to SEBI Listing Regulations 2015 a separate chapter titled CorporateGovernance has been included in this Annual Report along with the reports on ManagementDiscussion and Analysis and General Shareholders information.

All the Board members and Senior Management Personnel have affirmed compliance with theCode of Conduct for the year 2020-21. A declaration to this effect signed by the Manager& CFO of the Company is contained in this Annual Report.

The Manager & CFO have certified to the Board with regard to the financialstatements and other matters as required under regulation 17(8) of SEBI ListingRegulations 2015

The Certificate from the Practicing Company Secretary of the Company regardingcompliance of conditions of Corporate Governance is annexed to this report.

AUDITORS

a) Statutory Auditors

M/s M. Bhaskara Rao & Co. Chartered Accountant Hyderabad (FRN: 000459S) wereappointed as the Statutory Auditors at the 45th AGM for a period of 3 years upto theconclusion of the 48th AGM of the Company.

The Statutory Audit Report for the year 2020-21 contains the following remarks and theexplanation of the management in response of the same.

a. The Auditors have raised a concern with respect to the various exposures of theCompany to Amritjal Ventures Private Limited (AJVPL) in the form of Equity OptionallyConvertible Debentures (OCDS) Inter corporate Deposit (ICD'S) and Tax Deducted at Sourcehaving a carrying value of Rs. 4621.11 Lakhs as on 31.03.2021 and the Corporate guaranteesgiven to the lender of AJVPL and its wholly owned subsidiary Gati Infrastructure BhasmeyPower Private Limited aggregating to Rs. 31336.71 Lakhs. A case has been filed by one ofthe financial creditors against AJVPL before NCLT Hyderabad which has been admitted butappeal is pending before NCLAT Delhi. In view of the adverse developments in AJVPLmanagement of the Company was expecting that the chances of recovery of these balances areremote.

In view of the same management made a provision for these balances and has also made aprovision of Rs.7798.91 Lakhs on an estimated basis considering the disputed nature ofclaim and unlawful invocation of the Corporate Guarantee. Further no interest wasrecognized for the year ended March 312021 on such inter-corporate loans and optionallyconvertible debentures.

Board Comment:

Response of the management is however given in note no. 29(ii) of the financialstatements.

b. Further the exposures of the Company to Mahendra Investment Advisors PrivateLimited (MIAPL) in the form of Inter Corporate deposit and TDSis aggregating toRs.4336.09(Previous year Rs.4359.37Lakhs).Also the Company did not recognize the interestincome during the current financial year-Rs. 268.42 Lakhs . As per the StandaloneFinancial Statements of MIAPL the networth of the MIAPL is negative and therefore theauditors were unable to comment on the recovery of amounts due from MIAPL.

Further the management of the Company is expecting to recover the above said balancesin its entirety and is of the opinion that no provisions is warranted at this moment.

Board Comment:

Response of the management is given in note no. 32 of the financial statement.

c. The investment in Equity shares of a Company held in Gati Limited pledged assecurity for the credit facilities availed by Gati Infrastructure Private Limited(GIPL) onreceipt of letter of comfort from Amritjal Ventures Private Limited. The lenders of GIPLhave invoked the pledge and the same weredisclosed as "Investments" as at 31stMarch 2021 as the management has takennecessary legal recourse for restoration of theinvoked shares .The Auditors have given a remark in their Audit report that they wereunable to comment on the impact if any on the loss for the year and reserves and carryingvalue of investment at this stage considering the uncertainty relating to recoverabilityof the said investment.

Board Comment:

Response of the management is given in note no. 28(ii) of financial statement.

d. The investment in Equity shares of a Company held in Gati Limited pledged assecurity for facilities availed by Amritjal Ventures Private Limited (AJVPL). The lendersof AJVPL have invoked the pledge and the same were disclosed as "Investments" asat 31st March 2021 as the management has taken necessary legal recourse for restorationof the invoked shares. The Auditors have given a remark in their Audit report that theywere unable to comment on the impact if any on the loss for the year and reserves andcarrying value of investment at this stage considering the uncertainty relating torecoverability of the said investment.

Board Comment:

For comment of the management refer note no. 28(iii) of financial statement.

e. The Standalone financial statements were prepared by the Company on a Going concernbasis. The Auditors have given disclaimer in their audit report that due to the absence ofsufficient and appropriate audit evidence and the liability developed on the Company uponinvocation of guarantees by the lenders of other entities opinion that preparation ofstandalone Ind AS financial statement on a going concern basis is not appropriate.Hencestatutory auditor unable to comment on the effect on carrying value of assets andliabilities had the financial statements been prepared not as a going concern.

Board Comment:

Refer response of the management from note no. 33 of the financial statement.

f. During the year three shareholders of the Company filed a petition before NationalCompany Law Tribunal (NCLT) Hyderabad Bench against the Company and the managementregarding oppression and mismanagement of affairs of the Company and the statutoryauditors of the Company regarding reporting requirements of the said transactions.

Board Comment:

Response of the management given in the note no. 25 of the financial statement.

b) Secretarial Auditors

Pursuant to the provisions of section 204 of the Act and the Rules made there underthe Board has appointed M/s Tapasvilal Deora & Associates Practicing CompanySecretary (M. No. 9813 CP No. 13087) to undertake the secretarial audit of the Company.The Secretarial Audit Report for the year 2020-21 as issued by him in the prescribed formMR-3 is annexed to this Report.

Pursuant to amendments under SEBI Listing Regulations 2015 and SEBI circular dated 8February 2019 a report on secretarial compliance as required under regulation 24A isbeing submitted to stock exchanges as obtained from M/s TapasvilalDeora& Associatesfor the financial year 2020-21.

The Secretarial Auditors raised the following concerns in their report for thefinancial year 2020-21:

1. The Company (being a Top 2000 listed entity on NSE) was required to appoint 6 (six)Directors w.e.f. 01.04.2020 in accordance with Regulation 17(1)(c) of SEBI (LODR)Regulations 2015. The Company has complied with said provision w.e.f 12.11.2020.

Board Comment:

Company received the first notice dated 20thAugust 2020 and thereafter company triedits best to appoint directors and comply with the provision as soon as possible but due toCovid -19 situation there was delay and company complied with the regulation 17(1)(c) ofSEBI (LODR) Regulations 2015 w.e.f. 12.11.2020.

2. The Company has not given intimation/disclosures to stock exchanges regardingcertain bank and lender defaults made during the year as required under Regulation 30 ofSEBI (LODR) Regulations 2015.

Board Comment:

Management in advertently missed to intimate/disclose to stock exchanges regardingcertain bank and lender defaults made during the year due to COVID-19 situation otherwisecompany intimated rest of the disclosures to the stock exchange timely as required underRegulation 30 of SEBI(LODR) Regulations 2015.

3. The Company has complied with Indian Accounting Standards except w.r.t treatment ofinvocation of Corporate Guarantees.

Board Comment:

Management has complied with the Indian Accounting Standard except w.r.t. treatment ofinvocation of Corporate Guarantees.

4. The Company has not disclosed details of defaults made on loans taken as requiredunder SEBI Circular SEBI/ HO/CFD/CMD1/CIR/P/2019/140 dated November 21 2019

Board Comment:

The Management has not reported certain defaults made on loans taken as required underSEBI Circular SEBI/ HO/CFD/CMD1/CIP/P/2019/140 dated November 21 2019 by oversight.

5. As per Section 203 of the Act the Company is required to appoint separateindividuals as MD/WTD/ Manager CFO and CS. Mr. Ramesh Sivaraman was the Manager and CFOof the Company till 31.07.2020. The Company has then appointed Mr. Amit Kumar Ray as CFOof the Company w.e.f31.07.2020 subsequent to resignation of Mr. Ramesh Sivaraman as CFO ofthe Company.

Board Comment:

Company has appointed Mr. Amit Kumar Ray as CFO of the Company w.e.f. 31.07.2020.

6. As per Section 203(4) of the Companies Act any vacancy in the office of a wholetime KMP needs to be filled up by the Board within a period of 6 (six) months. Mr. RameshSivaraman ceased to be a Manager of the Company w.e.f29.09.2020 and Mr. Amit Kumar Ray wasappointed as Manager on 23.04.2021 (subsequent to his resignation as CFO w.e.f 23.04.2021)after the expiry of the said 6 (six) months.

Board Comment:

Mr. Ramesh Sivaraman ceased to be a Manager of the company w.e.f 29.09.2020 and Mr.Amit Kumar Ray was appointed as Manager on 23.04.2021(subsequent to his resignation as CFOw.e.f23.04.2021).

7. The Company has not created modified and satisfied chargesi.e. not filed e-formsCHG 1 & CHG 4 for pledge on the shares held by the Company and for certain loansavailed in previous years;

Board Comment:

No new pledges were made during the year. The company has not received NOC from theconcerned lender for filing form CHG-4.

8. For the extra ordinary general meeting held on 30.01.2021 the cut- off date fordetermining the Members who are entitled to vote through Remote e-voting or voting at themeeting should have been 23.01.2021 (Saturday) as per Clause 8.4 of Secretarial Standardon General Meetings and the Act; however the Company has set 22.01.2021(Friday) as itscut-off date for the said meeting. We have been informed that the list of shareholders onboth the dates are same.

Board Comment:

There is no impact as 23.01.2021 was non trading day being a Saturday and list ofshareholders on both the dates were same.

c) Internal Audit

Pursuant to the provisions of section 138 of the Companies Act 2013 read with rule 13of the Companies (Accounts) Rules2014your Company has appointed M/s Laxmini was & Co(LNCO) as Internal Auditor to conduct the Internal Audit of the functions and activitiesof the Company for FY 2020-21.

BOARD COMMITTEES

Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee number ofmeetings held during the year under review and other

related details are set out in the Corporate Governance Report which forms a part ofthis Report. There have been no situations where the Board has not accepted anyrecommendation of the Audit Committee.

WHISTLE BLOWER POLICY/ VIGILMECHANISM

Pursuant to section 177(9) of the Companies Act 2013 and Regulation 22 of SEBI ListingRegulations 2015 the company has framed its whistle Blower/vigil mechanism policy.

The Vigil Mechanism policy/Whistle Blower policy provide a mechanism for theDirectors/employees of the Company to report without fear of victimization any unethicalbehavior suspected or actual fraud violation of the Code of Conduct etc which aredetrimental to the organisation's interest.

The purpose of Whistle Blower Policy is to allow the Directors and employees to raiseconcerns about unacceptable improper practices and/or any unethical practices and/or othergenuine concerns being followed in the organization without the employees beingnecessarily required to inform their superiors and to create awareness amongst employeesto report instances of leak of unpublished price sensitive information.

The mechanism protects the whistle blower from any kind of discrimination harassmentvictimization or any other unfair employment practice. The directors in all cases andemployees inappropriate or exceptional cases have direct access to the chairman of theaudit committee. The company affirms that no employee has been denied access to the AuditCommittee. The Vigil Mechanism Policy has been uploaded on the website of the Company at:http://www.tcifl.in/pdf/ VigilMechanismPolicy.pdf.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters along withdetails of number of programmes and number of hours spent by each of the IndependentDirectors during the Financial Year 2020-21 in terms of the requirements of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are available on the website ofthe Company and can be accessed at the web-link: https://http:www.tcifl.in/investors/famailarisationProgramme.

ACCOUNTS OF SUBSIDIARY

Your Company has no subsidiaries

LISTING

The Company's shares are traded in the dematerialized form on both BSE ltd and NationalStock Exchange of India Limited having nationwide terminals. The particulars ofShareholding Pattern Distribution of Shareholding and Share prices are mentionedseparately in the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

MDA is provided as a separate in the annual report.

DISCLOSURE OF ACCOUNTING TREATMENT

As per notification no. G.S.R.365(E) dated 30th March 2016 issued by Ministry ofCorporate Affairs (MCA) in exercise of power conferred to it under section 133 read withsection 469 of the Companies Act 2013 NBFCs having networth of Rupees five hundred croreor more are required to comply with the Indian Accounting Standards (IndAS) in preparationof their financial statements and quarterly financial results for the accounting periodsbeginning on or after1stApril 2018 with effective transition date of 1st April 2017.

Further MCA in exercise of its power under sub-section (1) of section 467 of theCompanies Act 2013 amended Schedule III to Companies Act 2013.Vide the amendment a newdivision viz.' Division III' financial statement format was introduced for Non-BankingFinancial Companies effective from 11th October 2018.

Accordingly the financial statements of the Company from this financial year will beprepared as per IND AS.

COMPLIANCE OF SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards

i.e. on meetings of the Board of Directors (SS-1) and general meetings (SS-2) read withthe MCA circulars granting exemptions in view of the COVID -19 pandemic issued by theInstitute of Company Secretaries of India and that such systems are adequate and operatingeffectively.

GENERAL

i) During the year under review there was no change in nature of business.

ii) Material Changes and Commitment effecting the financial position of the Company.

There are no material changes or commitments affecting the financial position of theCompany between the end of the financial year and the date of the report except thecompany's exposures to Amrit Jal Ventures Pvt Ltd (AJVPL) in the form of EquityOptionally convertible Debentures Inter Corporate Deposit Interest accrued thereon andtax deducted at source aggregating to Rs. 4621.11 Lakhs and guarantees given to thelenders of AJVPL and its subsidiaries as disclosed in the Financial Statements.

Further the spread of COVID-19 pandemic and the subsequent pan-India lockdownannounced by the Government of India are the events which have continued till the date ofthe announcement of financial results of the Company. The uncertainty on the restart ofthe Company's complete operations still prevails.

iii) Your Company has adopted a policy against sexual harassment in line with theprovisions of Sexual Harassment of Women at Work place (Prevention Prohibition andRedressal) Act 2013 and the rules framed there under. During the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Work place (PreventionProhibition and Redressal) Act 2013

ACKNOWLEDGEMENT

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 share holdersfor 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
Dhanpat Ram Agarwal
Hyderabad Chairman
June 30 2021 DIN:00322861

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