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TCI Finance Ltd.

BSE:501242  |  NSE:TCIFINANCEEQ  |  58888:tna  |  IND:Financial Services - Misc  |  ISIN code:INE911B01018  |  SECT:Financial Services

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You can view full text of the Director's Report for TCI Finance Ltd.
Director Report
Mar2016   Mar 2017

DIRECTORS’ REPORT

Dear Members,

The directors take pleasure in presenting the 43rd Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2017.

FINANCIAL HIGHLIGHTS (Standalone)

(Rs, in Lakhs)

Particulars

As at March 31, 2017

As at March 31, 2016

Income

1409.54

1146.31

Profit/(loss) before Interest, Depreciation & Taxation

1285.09

1035.64

Financial Charges

855.57

803.92

Depreciation

2.77

2.91

Profit/(Loss) before tax

426.75

228.81

Exceptional Items

--

--

Provision for tax:

Current Tax

68.42

32.00

Deferred Tax

(4.25)

(1.33)

Tax relating to earlier years

2.18

--

Profit/(Loss) after tax

360.40

198.14

Balance brought forward from previous year

1917.91

1759.40

Transferred to Reserve Fund

72.08

39.63

Balance Carried forward

2206.23

1917.91

DIVIDEND

Your Directors have not recommended payment of dividend for the financial year ended March 31 2017 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, 1409.54 lakhs as against Rs, 1146.31 lakhs in the previous year. The profit before tax stands at Rs, 426.75 lakhs as against Rs, 228.81 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, 144.36 lakhs as against Rs, 142.71 lakhs in the previous year. Profit before tax stood at Rs, 4.14 lakhs as against loss of Rs, (4.76) 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 Rs, 72.08 Lakhs to reserve fund i.e 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 reports of the subsidiary.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, Ms. Meera Madhusudan Singh retire by rotation and being eligible, has offered herself for re-appointment.

The brief profile of the director who is to be re-appointed form 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.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2016-17, percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2016-17 are as under:

Non-Executive Directors (Refer Note-1)

Ratio to median remuneration

% increase in remuneration in the financial year

Mr. Hemant Kaul, Chairman

-

-

Mr. Mahendra Agarwal,Promoter & Director

-

-

Mr. R S Agarwala,Director

-

-

Mr. S M Jalan, Independent Director

-

-

Mr. D R Agarwal, Director

-

-

Ms. Meera Madhusudan Singh, Director

-

-

Executive Directors/ KMP

Mr. Ramesh Sivaraman-Manager-Chief Executive

2.34:1

10%

Ms. Lakshmi Sharma, Company Secretary

0.37:1

6%

Note 1: The Company had paid only sitting fees to the Directors. Apart from sitting fees there is no other remuneration paid to the Non-Executive Directors. Therefore the ratio to median remuneration is negligible.

ii) the percentage increase in the median remuneration of employees in the financial year: 9.5%

iii) the number of permanent employees on the rolls of company: 4

iv) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2016-17 was 10 % whereas the increase in the managerial remuneration for the same financial year was 10%.

v It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

The particulars of employees required under section 197(12) of the Companies Act, 2013 read with Rules 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not furnished as there is no employee in receipt of remuneration more than the prescribed limit.

As per ministry of corporate affairs notification no: G.S.R. 646(E) regarding amendment of 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 remuneration drawn as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given below:

a) Name of the employee;

Ramesh

Sivaraman

Laxmi Narain kumawat

Dinesh Goud

Lakshmi

Sharma

b) Designation of the employee;

Manager-Chief Executive

Assistant General Manager

Manager

Company

Secretary

c) Remuneration received; (Rs, in lakhs)

33.66

20.42

12.50

5.60

d) Nature of employment, whether contractual or otherwise;

Permanent

Permanent

Permanent

Permanent

e) Qualification an experience of the employee;

CA

MCOM

LLM

CS

f) Date of commencement of employment;

22-Oct-96

01-Sep-78

31-Mar-06

01-Dec-12

g) Age of such employee;

49

57

39

28

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

Manager, Asia Pacefic

Investment Ltd.

Manager Gati Ltd.

Own Practice

Assistant Manager-Gati KWE

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

0

0.07

Nil

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

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:

The company being a NBFC therefore section 186 of Companies Act, 2013 is exempted therefore details of Loans, Guarantees and Investments are given in the notes to the Financial Statement.

CORPORATE SOCIAL RESPONSIBILITY

During the year, your Company decided to install the solar panel 6 KWp ( 2 nos of 3 KWp) Solar PV plant at two Government School at Hyderabad as a part of its CSR activities. Further, your company proposed to spend Rs.9 lakhs for the aforesaid activity. The Company has placed order for installation of solar panel. The expenses would be accounted after the installation of the solar panel and on payment in FY 2017-18. 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 there under 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 a 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 Counselor / 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 February 7, 2017 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://www.tcifl.in/pdf/ProgrammesforIDs07022017.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, 2017, 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 judgment 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 2016-17.

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.

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.

During the year under review there is no qualifications/observations raised by the auditors.

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.

Pursuant to the observation of the secretarial auditor in his report, the Company is in the process of selection and appointment of CFO.

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, 2015requirements offish 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 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 filled 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

Hyderabad Hemant Kaul

May 2, 2017 Chairman

DIN:00551528

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