DIRECTORS’ REPORT To, Dear Members, Your directors take pleasure in presenting the 42nd Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2016. DIVIDEND Your Directors have not recommended payment of dividend for the financial year ended March 31, 2016 since it is proposed to retain the same in the business. FIXED DEPOSITS The Company has not accepted any deposits during the year under review and it continues to be a Non-deposit and Non Banking Financial Company in conformity with the guidelines of the Reserve Bank of India and Companies (Acceptance of Deposits) Rules, 1975. OPERATIONAL PERFORMANCE REVIEW During the year under review, your Company achieved a turnover of Rs. 1146.31lakhs as against Rs. 1372.67 lakhs in the previous year. The profit before tax stands at Rs. 228.81 lakhs as against Rs. 817.59 lakhs in the previous year. SUBSIDIARY (ITAG BUSINESS SOLUTION) The wholly owned subsidiary of the Company M/s. ITAG Business Solutions Ltd. is into the core business of Knowledge Process Outsourcing (KPO) and the consolidated financials forms part of this annual report. The turnover of the Subsidiary Company M/s. ITAG Business Solutions Ltd is Rs. 142.71 lakhs as against Rs. 128.26 lakhs in the previous year. Profit before tax stood at Rs. (4.76) lakhs as against Rs. 3.88 lakhs in the previous year. A statement pursuant to Section 129 of the Companies Act, 2013 related to the accounts of the subsidiary forms part of this Annual Report. Policy for determining material subsidiaries of the Company is available on the website of the Company http://www.tcifl.in/ pdf/Policyonmaterialsubsidiaries.pdf RESERVE As per section 45IC of RBI Act 1934, the Company has transferred Rs39.63 Lakhs in reserve fund i.e aggregating of 20% of its net profit. CONSOLIDATED FINANCIAL STATEMENTS (CFS) In accordance with the Companies Act, 2013 (“the Act”) and Accounting Standard (AS) – 21, Consolidated Financial Statements is provided in the Annual Report. The CFS should therefore be read in conjunction with the directors' reports, financial notes, cash flow statements and the individual auditor report of the subsidiary. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Radhe Shyam Agarwala retire by rotation and being eligible, has offered himself for re-appointment. The brief profile of the director who is to be re-appointed forms part of the notes and explanatory statement to the notice of the ensuing Annual General Meeting. During the year under review there is no change in Key Managerial Personnel of the Company. DECLARATION FROM INDEPENDENT DIRECTORS The Company has received necessary declaration from Mr. Hemant Kaul and Mr. S M Jalan Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually 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 out has been explained hereunder. The evaluations based on questionnaire was prepared which assessed the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The evaluation criteria for the Directors were based on their participation, contribution and offering guidance to and understanding of the areas which are relevant to them in their capacity as members of the Board. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement. CORPORATE SOCIAL RESPONSIBILITY During the year, your Company decided to provide Desks / Benches to the school students at Government High School, Miyapur, Hyderabad as a part of its CSR activities. Further, your company proposed to spend Rs. 8 lakhs for the aforesaid activity. The Company has placed order for procuring the Desks/Benches. The expenses would be accounted after the receipt of the Desks/Benches on payment in it FY 2016-17. Details of activity under CSR is given in Annexure-A. RELATED PARTY TRANSACTION The main business of the Company is financing activities and all loans granted to related party (if any) are in the ordinary course of business. All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly Form AOC-2 is not applicable to the Company. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its approval . Your Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015. This Policy was considered and approved by the Board has been uploaded on the website at: http://www.tcifl.in/ pdf/RelatedPartyTransactionPolicy.pdf MEETINGS During the year Four Board Meetings and Four Audit Committee Meetings were convened and held. The details of the meeting along with the attendance of the director are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Board Committees Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, CSR Committee, Stakeholders Relationship Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report. There have been no situations where the Board has not accepted any recommendation of the Audit Committee. VIGIL MECHANISM The Company has Vigil Mechanism policy with a view to provide a mechanism for employees of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee of the Company. The Vigil Mechanism Policy has been uploaded on the website of the Company at: http://www.tcifl.in/pdf/VigilMechanismPolicy.pdf. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS Pursuant to SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes. Accordingly, the Company has arranged a technical session on January 21, 2016 to familiarize the Independent Directors about their roles, responsibilities and duties as Independent Directors. The details of the familiarization programme has been disclosed on the website of the Company at: http://tcifl.in/pdf/ProgrammesforIDs21012016.pdf DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 (5) of the Companies Act, 2013 your Directors' confirm the following: v that in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures; v that the directors have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for that period. v that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. v that the directors have prepared the annual accounts on a 'going concern' basis. v that the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. v that the systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively ACCOUNTS OF SUBSIDIARY Copies of these annual accounts and related information will be made available on the Company’s website at www.tcifl.in and also on request. The annual accounts of the subsidiary company will be made available at the registered office of the company and also at the venue during the Annual General Meeting. LISTING The Company’s shares are traded in the dematerialized form with nation-wide terminals on both Bombay Stock Exchange and National Stock Exchange. The particulars of Shareholding Pattern, Distribution of Shareholding and Share prices are mentioned separately in the Report on Corporate Governance. Internal Financial Controls Your Company has established and maintained a framework of internal financial controls and compliance systems. Based on the same and the work performed by the internal auditors, statutory auditors and external agencies and the reviews performed by management team and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's Internal Financial Controls were adequate and effective during the financial year 2015-16. The Board of Directors, to the best of their knowledge and ability, confirm that: Your Company has laid down internal financial controls to be followed and that such internal financial controls are adequate and were generally operating effectively; and Your Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. AUDITORS a) Statutory Auditors The Statutory Auditors of the Company M/s. Bhaskara Rao & Co, Chartered Accountants, Hyderabad hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter to the effect that the re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. As required under SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. Pursuant to Companies Act, 2013, the Company has appointed the statutory auditors to hold office from the conclusion of the 40th Annual General Meeting till the conclusion of the 45th Annual General Meeting, subject to ratification at the every Annual General Meeting of the Company. b) Secretarial Audit In Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. dvm gopal & associates, a firm of Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed as Annexure – B. c)Internal Auditor Internal auditor submits his report to the audit committee every quarter. EXTRACT OF ANNUAL RETURN The details forming part of Annual Return in form MGT-9 is annexed as Annexure-C CORPORATE GOVERNANCE The Company has complied with the provisions pertaining to Corporate Governance as per the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 requirements of the Stock Exchanges and necessary disclosures have been made in this regard in the Report on Corporate Governance is annexed as Annexure-D along with a certificate from a Practicing Company Secretary confirming compliance of the same. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO: As the Company is not engaged in the manufacturing activity, the prescribed information regarding compliance of rules relating to conservation of Energy and Technology absorption pursuant to Section 134 (3) (m) of the Companies Act, 2013, read with Rule – 8 (3) of the Companies (Accounts) Rules, 2014 is not provided. The Company does not have any Foreign Exchange Earnings and outgo in the year under review. MANAGEMENT DISCUSSION AND ANALYSIS (MDA) MDA is provided as a separate section in the annual report. GENERAL i. During the year under review there is no change in nature of business. ii. There is no material changes and commitment affecting the financial position of the Company between the end of financial year and the date of the report. iii. During the year under review no significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future iv. During the year under review there were no cases filed pursuant to the Sexual Harassment of women at workplace (prevention, Prohibition and Redressal )Act, 2013 ACKNOWLEDGEMENT Your Directors wish to express their sincere appreciation for the support and cooperation, which the Company continues to receive from its clients, Banks, Government Authorities, Financial Institutions and associates and are grateful to the shareholders for their continued support to the Company. Your Directors place on record their appreciation for the contributions made and the efforts put in by the management team and employees of the Company at all levels. By Order of the Board For TCI FINANCE LIMITED Hemant Kaul Chairman DIN: 00551528 Hyderabad 13 April 28, 2016 |