TCFC Finance Ltd Director Report

DIRECTOR’S REPORT

To the Members of,

TCFC FINANCE LIMITED

The Directors have pleasure in presenting the 27^th Annual Report of the Company together with the Audited Annual Accounts for the year ended March 31, 2018.

1. FINANCIAL RESULTS

	Year ended March 31, 2018 (Rs, in lacs)	Year ended March 31, 2017 (Rs, in lacs)
Profit/Loss before Depreciation and Taxes	502.28	(630.01)
Less: Depreciation	3.41	3.01
Profit/Loss before tax	498.87	(633.04)
Less: Provision for Tax	110.91	76.35
Net Profit/(Loss) after tax	387.96	(709.37)
Proposed dividend (including tax)	189.24	-
Carried to General Reserve	38.80	-
Carried to Statutory Reserve	77.59	-
Surplus balance carried to Profit and Loss Account	(1806.43)	(1888.76)

2. OPERATIONS

Compared to previous year’s Loss of Rs, 709.37 lakhs. this year, your company has made a Profit of Rs, 498.87 lakhs before provision of tax and after deducting tax it comes to Profit of Rs 387.96 Lakhs

3. DIVIDEND

Your Directors have recommended a dividend to be paid out of current year profits of Rs,1.50 per equity share for the financial year ended 31^st March, 2018 amounting to Rs, 18,924,066 (inclusive of a tax of Rs, 32,00,872)

The dividend payable shall be subject to the approval of the Members at the ensuing Annual General Meeting.

4. MANAGEMENT DISCUSSION AND ANALYSIS

- Industry Structure and Developments

Your Company is engaged and registered as a NBFC, currently the NBFC space and industry as whole is on a road to growth as is the trend seen, the interest rate are growing southward and the markets on a upward with record highs, on overall analysis of the NBFC sector the management is very optimistic about the future growth and prospects of the Company.

- Opportunities and Threats

Being a primarily investment company, fluctuating markets and interest rate pose a threat to the business of the Company, However the same can be converted into opportunity by proper planning and implementation.

- Segment Wise / Product Wise Performance

As the company is only in one line of business, product wise disclosure of performance is not required to be made.

- Business Outlook

The Management of the Company is looking for a steady growth of the Company and aims at maximizing the shareholders wealth by way of earning maximum profits at low investment costs.

- Risks and areas of concern

Risk of market fluctuation shall always be a major risk associated with the Company, however the management is of the opinion that the Company can withstand through in any kind of market fluctuation as the investment portfolio of the Company is relatively stable and less prone to market fluctuations.

- Internal Control Systems and Adequacy

The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. Your Company has taken proper and sufficient care for the maintenance of adequate accounting records as required by various Statutes, Internal Auditor, the Audit Committee and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities.

- HUMAN RESOURCES:

The Company’s current activities do not require engagement of significant human resource. However, requisite qualified and experienced personnel have been engaged to take care of organization need of human resource. With the sign of growth, if and when seen, the Company will engage requisite human resource.

- Future Outlook:

The future outlook of Indian financial markets looks positive. It can be affected by unfavorable global cues but with strong policies from the Indian government, like Make in India, Digital India, Startup India, changes in FDI norms, there is positivity in the Indian business environment. Controlled inflation and increasing GDP growth are favorable signals for the Company.

The Company’s focus will be on its regular trading activities and making 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 corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. 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 Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance

6. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered into by the Company during the financial year with related parties into were in the ordinary course of business 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 in accordance with the policy of the Company on materiality of related party transactions.

The details of the related party transactions as required under Accounting Standard - 18 are set out in note to the financial statements forming part of this Annual Report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on Company’s website at http:// www.tcfcfinance.com/wp-content/uploads/2018/07/Policy_ on_Related_Party_Transcations-revised.pdf

7. DEPOSITS

Being a non-deposit accepting NBFC Company, your Company has not accepted any deposits from the public / members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

8. STATUTORY AUDITORS

In accordance with the provisions of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, M/s. GMJ & Co, Chartered Accountants, (Firm registration No. 103429W), were appointed as Company’s Statutory Auditors in the Company’s 25^th Annual General Meeting to hold office till the conclusion of the 28^th Annual General Meeting, subject to ratification by the members at every Annual General Meeting until the expiry of the period of original appointment as may be necessitated by the Act from time to time.

However, the Ministry of Corporate Affairs vide its notification dated 7th May 2018 has done away with the requirement of the ratification of the appointment of Statutory Auditors at every Annual General Meeting and hence M/s. GMJ & Co. shall continue as Statutory Auditors for the remaining period of the term till the conclusion of the 28^th Annual General Meeting of the Company.

The Auditors’ Report does not contain any qualification, reservation or adverse remark or disclaimer. Further, the Statutory Auditors have not reported any incident 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 to the audited financial statements of the Company for the year ended March 31, 2018, the Board of Directors hereby confirms that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit/loss of the Company for that year;

(c) proper and sufficient care was taken 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;

(d) the Annual Accounts of the Company have been prepared on a going concern basis.

(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

- Director Retiring by Rotation:

I n terms of Section 152 of the Companies Act, 2013, Mr. Dharmil Bodani, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board recommends the same for your approval.

- Declaration by independent directors

The independent directors have submitted the declaration of independence, as required under section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013 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 managerial personnel of the Company.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is not engaged in any manufacturing activity and thus its operations are not energy intensive. However, adequate measures are always taken to ensure optimum utilization and maximum possible saving of energy.

There was no foreign exchange transaction entered into by the Company during the year under review.

12. EMPLOYEE REMUNERATION

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided in “Annexure 1” forming part of this report.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company’s website at the link: http://tcfcfinance.com/wp-content/uploads/2015/06/ CORPORATE-SOCIAL-RESPONSIBILITY-POLICY-TCFC-Finance-Ltd-PDF.pdf

The Annual Report on CSR activities for the financial year ended 2016-2017 and 2017-2018 is annexed herewith as “Annexure-2”

14. MEETINGS OF THE BOARD:

The Company holds at least four Board meetings in a year, one in each quarter, inter-alia, to review the financial results of the Company. The Company also holds 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 placed and noted at the subsequent Board meeting.

During the financial year 2017-18, four (4) Board Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

The details of the Board meetings held during the year along with the attendance of the respective Directors thereat are set out in the Corporate Governance Report forming part of this Annual Report

15. COMMITTEES OF THE BOARD:

With a view to have a more focused attention on business and for better governance and accountability, the Board has constituted the mandatory committees viz. Audit Committee, Stakeholders'' Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee.

The details with respect to the compositions, roles, terms of reference etc. of relevant committees are provided in the Corporate Governance Report of the Company, 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 structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process

17. NOMINATION AND REMUNERATION

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members.

18. SECRETARIAL AUDIT REPORT

I n 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 of the 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 Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is enclosed as “Annexure 4” to this report.

20. INTERNAL AUDIT & CONTROLS

The Company has adequate system of internal financial control and risk mitigation system commensurate with the size of the Company and nature of its business. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Audit committee actively reviews the adequacy and effectiveness of the Internal Financial control and suggests the improvements for the same.

21. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Since the Company is a registered entity under the Reserve Bank of India to conduct the business of Non Banking Financial Services, pursuant to the section of 186 (11) (a),

(b) of the Companies Act, 2013, the company is exempted from complying with the provisions.

Further, details of Investments made by the Company during the year review form a part of the financial statements.

22. VIGIL MECHANISM:

Pursuant to the provisions of section 177(9) (10) of the Companies Act, 2013 and Regulation 22 of SeBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.tcfcfinance.com/ wp-content/uploads/2018/07/Whistle_Blower_Policy_Vigil_ Mechanism_Policy.pdf

Further, there were no complaints received from the employees of the Company under vigil mechanism for the year under review.

23. RISK MANAGEMENT

Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and has established a framework for mitigating controls and reporting mechanism of such risks. Some of the risks that the Company is exposed to are: (i) Financial Risk (ii) Regulatory Risks (iii) Strategic Risks

24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

During the financial year 2017-18, Company has not received any complaint 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 the financial 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 the Company and its future operations

27. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, the amount of unclaimed and unpaid dividend amounting to '' 6,55,252/- was transferred to the IEPF.

Also, pursuant to the provisions of the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016], the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 22^nd August, 2017), with the Ministry of Corporate Affairs.

28. TRANSFER OF UNCLAIMED SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has duly transferred 204,322 shares which remained unclaimed from the financial year 2009-2010 to the IEPF Demat Account of the Authority maintained with NSDL.

Unclaimed dividend for Financial year 2010-2011 shall become due for transfer to the said fund. Members are requested to verify their records and send claim, if any, by writing to the Company at investorservices@tcfcfinance. com, before the amount becomes due for transfer to the said fund.

Pursuant to section 124(6) of the Companies Act, 2013, as amended, and the IEPF Rules, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred to demat account of the I EPF Authority. In due compliance of the provisions of rule 6(3) of the IEPF Rules, the Company will send individual letters through speed post to all such members requesting them to claim the amount of unpaid dividend before the Company proceeds with the transfer of related shares to Demat account of the IEPF Authority. The Company will also be publishing notice in the newspapers

intimating the members of the said provisions and these details will be made available on the Company’s website https://www.tcfcfinance.com

As provided under the IEPF Rules, a member can claim such dividend and shares transferred to the fund by following the procedure prescribed in the IEPF Rules which is available on the Company’s website https:www.tcfcfinance.com

29. ACKNOWLEDGMENT

The Board of Directors thanks Reserve Bank of India, all other Banks, Stock Exchange of Mumbai and Shareholders for their continued support besides employees at all levels.

By Order of the Board

For TCFC Finance Limited

Place: Mumbai Atul Desai

Date: 9^th May, 2018 Chairman

(DIN:00019443)